How to Make Better Decisions: A Former CEO’s Simple Framework

Adults make an astounding 33,000 to 35,000 decisions each day, and knowing how to make better decisions becomes significant to succeed. Harvard Business School professor Gerald Zaltman’s research shows that our subconscious mind handles 95% of these choices.

Pressure can make good decisions harder to reach, yet research indicates quick decisions can work just as well as those that take longer to make. The secret to better decision-making doesn’t lie in spending more time analyzing options. A solid framework makes all the difference. This piece shares a former CEO’s practical approach that improves decision-making, supported by research and real-life experience.

Why Most Leaders Make Poor Decisions

Poor judgment processes, not lack of information or expertise, often cause bad decisions. Research shows that smart, responsible leaders who have access to the best information still make wrong choices under certain conditions.

Common decision traps

Leaders often fall into predictable decision-making traps that hurt their effectiveness. We found these traps come from cognitive biases and emotional attachments. Research points to three major red flags that result in poor decisions:

• Inappropriate self-interest that distorts judgment
• Emotional attachments to past decisions or strategies
• Misleading memories that create false patterns

Leaders who depend too much on past experiences find it hard to adapt to new situations, especially when they try to apply their success in different contexts.

The cost of indecision

Leadership indecision costs way beyond missed opportunities. Organizations face ripple effects that multiply both financial and cultural costs. Leaders who can’t make timely decisions create:

Decision-making bottlenecks that limit organizational agility. This uncertainty makes employees hesitate, and projects start to stagnate while initiatives fail. Studies show that only 48% of organizations can make decisions fast enough to match market changes.

Analysis paralysis

Analysis paralysis happens when too much analysis stops progress within a reasonable timeframe. This common leadership challenge shows up when fear of mistakes outweighs the benefits of acting quickly. Research reveals that analysis paralysis typically appears through:

Project planning phases that drag on without adding value. Things get worse in critical situations where quick responses matter most, which can cause bigger problems than making a fast decision would have.

The effects become severe when leaders always want more information without deciding or worry too much about negative outcomes. This overthinking pattern affects more than just the decision-maker – it creates physical stress symptoms like heart palpitations, insomnia, and digestive issues in serious cases.

The 3-Step Decision Framework

Decisions drive every organizational outcome, and each decision naturally guides us to the next one. Better decisions come from a structured approach that starts with the right problem definition and clear criteria.

1. Define the real problem

The way we define a problem is the most significant factor in finding solutions that work. Companies often miss opportunities because they don’t express their problems clearly. Leaders should take these steps to define the real problem:

• Keep it simple: “We are looking for X to achieve Z as measured by W”
• Get into what’s behind surface-level symptoms
• Think about different points of view and stakeholders
• Draw clear boundaries around the problem scope

Studies show that people often stick with the first reasonable description of a situation as their problem statement. Teams jump into solution mode without checking if they’ve found the real issue. The way we define a problem shapes everyone’s point of view and determines possible solutions.

2. Set your decision criteria

The foundations of effective and logical choices are decision criteria. These criteria work as variables that matter to the organization and give us a framework to evaluate options. Good decision criteria bring several benefits:

Decision criteria help us make faster, better, and more consistent decisions. Decisions that weigh both qualitative and quantitative criteria are more likely to succeed.

Good criteria help standardize decisions throughout an organization and make them more acceptable to stakeholders. The process identifies factors that show progress toward objectives. To name just one example, see how system performance uses specific metrics like “throughput rate” to measure success.

3. Make the decision within a group

Decision-making works best as a team sport. We challenged gut decisions and made sure to include different points of view. Teams really need to debate issues because company growth often makes decisions tougher with more trade-offs.

Leaders should focus on both needs (must-haves) and wants (nice-to-haves) to create effective decision criteria. This difference helps rule out certain options while giving direction to choose between viable alternatives.

How to Make Fast Decisions Under Pressure

Quick yet thoughtful decisions are needed in high-pressure situations. Research shows that decisions made under pressure can be just as good as those that take longer to make.

Using the 10-10-10 rule

The 10-10-10 rule is a great way to get a well-laid-out approach to making fast decisions under pressure. This framework asks you to think over three time horizons:

• How will this decision affect me in 10 minutes?
• What will be the consequences in 10 months?
• How will this choice affect my life in 10 years?

In fact, research shows that people who stay more connected with their future selves make better decisions. People who use this rule show better financial judgment and exercise more often.

The 10-10-10 rule works because it helps create a clear view during high-pressure moments. It slows down impulsive thinking without causing decision paralysis. All the same, the rule’s true strength shows up when dealing with complex situations where quick rewards clash with long-term benefits.

When to trust your gut

Studies show that gut instinct becomes extra valuable when uncertainty is high. Research from 122 advertising, digital, publishing, and software companies found that data analysis might slow down decision-making without making it more accurate.

Experienced leaders mix their intuition with simple decision-making strategies to get better results. Research indicates that gut decisions work best in two specific cases:

1. When processing complex information that’s too hard to remember exactly
2. During lie detection scenarios, where gut judgments beat analytical approaches

Gut decision-making relates directly to emotional intelligence and professional experience. But gut feelings shouldn’t replace analytical thought completely – they work best alongside other decision-making tools.

Leaders should know that their intuition draws from both objective and subjective information they already have. This helps create a balanced approach to decision-making, where gut feel adds value but isn’t the only deciding factor.

Suggestion for read: How to Master Goal Setting

Balancing Data and Intuition

Making good decisions needs both data analysis and gut feeling to work together. Companies that use data to make decisions are three times more likely to see better results than those who don’t rely much on data.

Reading market signals

Changes in trends and consumer behavior show up in market signals before they become clear to everyone. These signals come from small changes in customer priorities, new ideas, or changes in regulations. Leaders who are good at spotting market signals look at both numbers and feedback to understand what’s coming next.

Data gives logical support to decisions, while intuition adds deeper understanding through experience. Studies from many industries show that gut feelings work well when there’s a lot of uncertainty. The key lies in knowing when to trust each approach:

• Data should drive decisions when optimizing step-by-step processes
• Intuition becomes essential when making choices with insufficient data
• Combined approaches work best for complex business questions

Learning from past decisions

Past choices give us valuable data to make better decisions. Leaders who look back at their choices can find patterns, strengths, and areas to improve. This review helps them spot hidden biases and assumptions they might miss otherwise.

Testing decision-making ideas creates knowledge that managers can use later, which helps reduce risks in future choices. Writing down decision processes in a leadership journal helps capture thoughts and track how decision-making skills grow over time.

Creating feedback loops

Feedback loops are vital tools that help make better decisions. Research shows that closed-loop feedback, where companies act on customer input, plays a big role in making customers happy and loyal.

A good feedback system gives companies an edge while promoting open communication. Many businesses used to see feedback as a one-time thing rather than an ongoing process. They found that using continuous feedback loops lets them make live adjustments based on current experiences and trends.

Feedback loops work because they create a cycle where information flows, people take action, and results help shape future decisions. This approach helps leaders make their decision-making better while keeping their organizations working together smoothly.

Building a Decision-Making Culture

A culture of effective decision-making needs the right foundations. Leaders who know how to strengthen others through coaching make good decisions almost four times more often than those who don’t.

Strengthening your team

The core of strengthening others lies in two things. Managers must provide quality decision-making tools and proper guidance. Team members with firm boundaries show 30% higher productivity and 23% more job satisfaction than others.

Leaders should take these steps to build decision-making skills throughout their organization:

• Invest in upfront skill building and coaching
• Give clear strategic direction and context
• Build an environment of trust and value
• Back decisions even when results aren’t perfect
• Ask team members to learn from past choices

Companies with high-performance cultures grow 20% faster than average ones. They also score about 50% better on detailed measures of decision effectiveness. Success comes from moving power from leadership to the front line. People need authority to make decisions within their responsibilities.

Team members perform better when they get clear authority and training to solve problems on their own. Leaders must switch from giving orders to becoming coaches. They should offer guidance and set limits while letting others make decisions.

Setting clear boundaries

Clear boundaries are vital to encourage teamwork and make sure everyone gets heard. Research from Harvard Business Review shows that 70% of team members believe managers who respect personal boundaries improve team spirit and results.

The core team should set approval thresholds for decisions like spending above certain amounts. This brings consistency while managing risks properly. Organizations must also define roles and responsibilities clearly – these are the foundations of strengthening efforts.

Here’s how to put boundaries in place:

1. Define decision rights and success metrics for each role
2. Make clear rules for moving decisions up
3. Keep decision responsibilities from overlapping across management levels
4. Set clear limits for independent decision-making

Leaders should agree on how to handle decisions and stay consistent. This builds trust across the organization. Good leaders hold people accountable for mistakes while teaching them to avoid similar errors later.

Boundaries help boost productivity and prevent burnout. They improve decision-making by showing clear priorities and limits. Without clear boundaries, decisions become messy and inconsistent. This leads to confusion and team conflicts.

Many organizations want to improve their decisions. The answer lies in becoming flatter and more flexible. Decision power and responsibility must go together. This approach makes navigation easier, speeds up decisions, and creates an organization that puts customers first.

Conclusion

The ability to make better decisions sets successful leaders apart from others. People make thousands of decisions each day. A well-laid-out approach helps navigate complexity and pressure without compromising the quality of decisions.

Successful leaders blend analytical methods with their gut feelings. This combination creates remarkable results. Their achievements come from three vital components: they define real-life problems with clarity, set the right decision criteria, and know exactly when to trust data or their instincts.

Companies thrive when decision-making skills spread beyond their core team. Teams make faster and better choices in environments with clear boundaries, proper guidance, and robust feedback systems. This fundamental change shows clear results – businesses with strong decision-making cultures grow 20% faster than their rivals.

Smart leaders understand good decisions come from both careful analysis and quick judgment. They don’t get stuck in analysis paralysis. Instead, they use methods like the 10-10-10 rule to maintain their point of view while moving ahead with confidence. Any leader can develop these crucial skills through steady practice and learning from previous decisions.