As an Engineering Leader, you're often caught between needing more information and making timely decisions. Especially in the world of tech and SaaS, projects move fast. Colin Powell’s 40-70 Rule offers a framework that can help you make better decisions, even when data/requirements are scarce.

I will break down Powell’s 40-70 Rule, explore why it’s relevant for engineering in a fast-paced environment, and show how it can help drive effective planning with real-world technical examples I hope you can apply to your circumstances.

What is the 40-70 Rule?

Colin Powell, a former U.S. General and Secretary of State, developed the 40-70 Rule as a guideline for decision-making under pressure. Powell’s rule states that leaders should make decisions when they have between 40% and 70% of the total information they desire.

Why 40-70%?

• Less than 40%: Acting on limited information is risky and can lead to uninformed, potentially reckless decisions.

• More than 70%: Waiting for near-complete information can slow decision-making, resulting in missed opportunities and sluggish progress.

By following the 40-70 Rule, engineering leaders can avoid "analysis paralysis" while balancing the need for timely, well-informed decisions.

Why the 40-70 Rule Matters in Engineering

In engineering, you often operate in fast-paced environments with constant changes in technology, requirements, and user needs. You rarely have all the information you need to make the “perfect” decision. You deal with ambiguity daily, and your ability to make timely decisions can directly impact your team’s progress and, ultimately, the success of your products.

Applying the 40-70 Rule in engineering helps:

• Prevent Decision Paralysis: Keeps you moving forward even with incomplete data.

• Encourage Strategic Flexibility: Enables course corrections if new information comes up mid-project.

• Support Calculated Risk-Taking: Encourages innovation by allowing you to make informed bets with manageable risks.

Applying the 40-70 Rule to Quarterly Planning

Quarterly planning is a critical time when engineering teams set and prioritise goals. Given the limited time frame and the changing landscape of requirements, you may need to make decisions with only partial information.

Here’s how the 40-70 Rule can help make this process smoother and more effective:

1. Set “Go / No-Go” Decision Points:

   • Define points during the quarter where you’ll decide on each project, even if only part of the data is available.

   • Example: If a feature’s feasibility remains unclear, set a deadline to move forward with development or pivot based on the 40-70 threshold.

2. Establish Information Thresholds for Decisions:

   • Determine the minimum data points needed to make informed decisions on resource allocation, project prioritisation, and feature development.

3. Promote Adaptability:

   • Recognise that acting on partial information means you may need to pivot. Promote a culture of iteration and flexibility, encouraging your team to revise goals if new information surfaces mid-quarter.

Technical Examples of the 40-70 Rule in Action

To see the rule in action, let’s look at some examples relevant to engineering decision-making.

1. Feature Prioritisation Based on User Feedback

   • Situation: Your team has received mixed user feedback on a new feature. You have about 55% of the information you’d ideally like on its performance and user acceptance.

   • Decision Using the 40-70 Rule: Rather than waiting for complete data, you decide to move forward with an A/B test based on the feedback you have. This allows you to make a more informed decision within the quarter and pivot if the A/B test shows poor results.

   • Outcome: By acting on 55% of the information, you deliver value faster, gather more data on feature performance, and avoid the delay of waiting for perfect information.
     
     

2. Risk Assessment for Technical Debt Reduction

   • Situation: Your team needs to reduce technical debt but lacks detailed data on which areas are impacting the most. Lacking in customer feedback and knowledge in the team.

   • Decision Using the 40-70 Rule: With about 40-50% of the data you’d ideally like, you focus on the most obviously problematic areas and you plan to gather additional metrics as you address these areas.

   • Outcome: This approach enables your team to make immediate improvements, addressing bottlenecks now instead of waiting for extensive area analysis that could take weeks.

Building a 40-70 Decision-Making Culture

Creating a culture that supports the 40-70 Rule can empower your team to take ownership of decisions and operate more efficiently. To get started:

• Define Clear Decision Thresholds: For each key area—like feature development, risk management, or sustainability—establish what 40-70% of information looks like.

• Encourage Calculated Risks: Reinforce that it’s acceptable to make decisions with partial information and agility is built-in as new information emerges.

• Reflect and Improve: After each quarter, conduct a retrospective on the decisions made with the 40-70 Rule. Seek feedback and discuss what went well, what didn’t, and how the team can refine its approach.

Conclusion

Colin Powell’s 40-70 Rule helps immensely support your teams and your decision-making; it is also a mindset that allows the team to act with purpose even when clarity is lacking. Applying this rule can prevent bottlenecks, support a culture of innovation, and help make progress on quarterly goals without the need for perfect information.

Let me know how you get on