Finding out more costs time or money. It's only worth it if what you find out could make you change your mind.
Before you ask for another report or another week of research, ask whether any answer it could give would change your decision. If not, decide now.
The expected value of information is the improvement in decision value from knowing the answer before choosing, minus its cost. If no plausible result would change the chosen option, the information is worth nothing to this decision, however interesting it is.
The question to ask
Before commissioning more analysis, ask: is there any result this could produce that would make us choose differently? If the answer is no, the analysis has no value for this decision. It may still be interesting, but it shouldn't delay anything.
A worked example
A team is deciding whether to renew 200 licences for a tool at £20 per person per month. Usage data says 150 people used it last month. Someone suggests a survey to find out how much people value it, which would take three weeks.
Ask what the survey could say:
- If everyone loves it, would you renew all 200? Probably not. 50 people still aren't using it.
- If people are lukewarm, would you cancel the 150 active seats? Probably not. They're using it.
Either way, the decision is roughly the same: renew about 150 and drop about 50. The survey can't change that, so it isn't worth three weeks. Decide now and review the usage again in a quarter.
When information is worth a lot
Information pays when you're close to a threshold and the stakes are high. If the choice between two suppliers is nearly even and the contract is large, a week's due diligence that could tip it either way is cheap.
A rule of thumb
The value of information is highest when you're unsure, the options are close, and a wrong choice is expensive. It's lowest when one option is clearly better or the decision is easy to reverse. For decisions you can undo cheaply, act and learn from the result.