- By: Áine Byrne
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How to make Smart Decisions with Incomplete Data
In an ideal world all business decisions would be backed by complete, clean and current data. That’s the perfect world, and the one we live in is far from that. What we, as businesses, have at our fingertips is often incomplete data from which we need to attempt to make informed decisions to help propel our business forward. A tricky task, especially when you consider the fast-paced industries we operate within, the often limited resources and of course shifting priorities.
The question then becomes, how do we make the right decisions with the limited data, or incomplete data we have to hand? Don’t worry, no crystal ball required!
There are tools out there to help
The good news is there are tools out there to help with this, each with it’s own strengths and weaknesses. The task then becomes which would be the best model to apply to your situation. Let’s take a look at three of them:
The OODA Loop Framework
Helping to make agile decisions in uncertain times.
The SWOT Analysis
A classic tool that still works today.
And Decision Trees
Visualising choices when the path isn’t clear.
We will break each down into what they are and where they came from, why it works well in business, a real-world business example, and how to apply it in the real world.
1. The OODA Loop Framework
The OODA Loop is a decision-making framework originally developed for fighter pilots, but now widely used in business, strategy, and leadership. If you’ve never heard of it before, then OODA stands for:
Observe
Gather as much relevant information as possible from your environment.
Orientate
Analyse what you’ve observed, factoring in context, experience, and goals.
Decide
Choose a course of action based on your current understanding.
Act
Implement the decision, then return to the start of the loop.
It’s important to note that this is not a one-time process, instead it should be an unbroken cycle where you are constantly inputting data to help your company stay agile and responsive to the market needs.
Why it Works
In short it is speed over perfection. It’s like the old adage says, perfection is the enemy of completion. Keeping with this, you don’t need perfect data to make progress, you just need enough to make the next move.
On top of that, because it is a continuous process, it pushes you to reassess. Ideal in uncertain or fast-changing environments. This also leads to providing a structure for when things do feel chaotic or unclear.
A Real-World Example
Let’s say you’ve discovered your Q3 sales are underperforming and not meeting the targets set. To understand why, you would:
Observe: Website traffic is steady, but conversions are down.
Orient: Competitors have launched aggressive summer promotions.
Decide: Launch a targeted campaign with a limited-time offer.
Act: Roll it out, monitor results, and loop back to observe again.
How to Apply it in Your Business
When it comes to applying it to your business, you could look to apply it in team meetings to structure discussions. Whether this is for current or future projects. Or look at applying it to project reviews, especially when things are going to plan. Or finally building it into your strategic planning process to stay responsive.
2. SWOT Analysis
A classic tool that perhaps is the most widely known of the three we are profiling here.
Opposite shows what SWOT stands for, it also shows how it is displayed, as a simple grid where you fill in each quarter with the input you have to hand. When used well it can help to unlock deep strategic insights.
Why it Works
Your team around you already knows a lot, probably a lot more than you think as well. Your product/solution team will know your offering inside out. Where it’s strong and where it’s weak. Your sales team will know why your customers choose you over your competitors as well as the objections given for those missed opportunities. And your marketing team will be up to date on what your competitors are doing.
All of this information can be harvested and fed into the SWOT analysis to provide you with the data you need to make structured, informed decisions on how to progress as a company.
A Real-World Example
Let’s again take the example your company is experiencing slowing sales, in order to understand why let’s apply the SWOT to it.
From this simple example, even without sales data, the outcome would be to prioritise a revamp of the website and focus on it’s roots within the local area.
How to Apply it in Your Business
For it to work best you need to get input from your entire company. So gather your teams or departments, sit them down and have honest conversations (especially about weaknesses and threats). By taking the time you will reveal blind spots from which to create action plans. Remember to prioritise the actions as not all are equal, focus on what’s most urgent or impactful and move forward.
3. Decision Trees
In business we often come across times when data is patchy, and the risks unclear. So how are we to judge what the outcomes are going to be? This is where a decision tree can help. It’s a tool that will help you to map out the different choices available along with the possible outcomes and the risks associated with each path.
The starting point is the initial decision that needs to be made and then the branches out into options, each leading to further outcomes or decisions. It’s like if you were able to do a flowchart of your thinking.
Why it Works
Put simply, it allows you to see all of your choices along with their potential consequences in one place. And even though you don’t have all the data to make informed decisions, it helps to highlight the assumptions you make through the process. These assumptions become visible and testable.
Finally, Decision Trees allow for quantitative analysis by assigning probabilities and estimated values to outcomes. This helps you calculate expected values for each path, giving you a more rigorous way to compare options and assess risk versus reward.
However, it’s important to note that Decision Trees can become unwieldy when there are too many branches or complex interdependencies. They also rely heavily on the accuracy of estimated probabilities and outcomes, which can introduce bias or uncertainty if not carefully considered.
How to Use it in Practice
Define the decision
What are you trying to choose between?
List the options
What are the possible actions?
Map the outcomes
What could happen next for each option?
Estimate impact
Even rough estimates of cost, time, or success rate can help.
Compare paths
Which option offers the best balance of risk and reward?
A Real-World Example
Say your company is trying to decide which would be the most profitable with the less risk attached: Invest in a new product / solution, improve an existing product / solution or just don’t bother with either and do nothing and see how the market goes.
The diagram clearly shows the probabilities and financial outcomes for each path. You can use this to calculate expected values for each option:
Invest in New Product: (40% × £500K) + (35% × £200K) + (25% × -£100K) = £245K expected value
Improve Existing Product: (30% × £300K) + (50% × £150K) + (20% × -£50K) = £155K expected value
Do Nothing: (70% × £0) + (30% × -£50K) = -£15K expected value
How to Apply it in Your Business
By mapping out your decision like this, it allows you to view the entire picture and, in a way allows you a Sliding Doors moment (think Gwyneth Palthrow movie from the 90’s!), to see all the possibles with their associated consequences, even without all of the sales forecasts.
Decision Trees are a great precursor to more advanced techniques like machine learning models, which build on the same principles but with more data and complexity.
Which is Best
Each process has its own inherently pros and cons and while there may be a preference for one over another, it’s probably better to look at the situation you find yourself in and then decide which would be the best fit. As a quick guide, each would be best in the following situations:
| Framework | Best For | Speed | Structure Type | Ideal When |
|---|---|---|---|---|
| OODA Loop | Fast, iterative decisions in dynamic environments | Fast | Cyclical | You need to act quickly and adapt as new info comes in |
| SWOT Analysis | Strategic planning and internal/external assessment | Moderate | Quadrant-based | You’re evaluating your position or planning long-term |
| Decision Trees | Complex choices with multiple outcomes and trade-offs | Moderate | Branching/Visual | You need to map out consequences and compare risks or rewards |
It’s a complex world we live in, and it’s becoming even more so as we get bombarded with even more data. We now have an abundance of tools to help us and feed us data, from sales and marketing to operations, to performance, customer feedback and financial. But all this data doesn’t always give us a complete 360 degree picture of what’s going on.
So, if you’re finding yourself not knowing what to do with the data you have, and the data you don’t you are not alone! The above tools will help and if you need a hand to understand which one would be best for your situation, and how to apply it, drop us a line and we would be happy to assist. Alternatively, Amazon does stock crystal balls…
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