How High-Level Leaders Make Decisions
Introduction
Most failed businesses didn’t collapse due to competition—they collapsed due to bad leadership decisions. The difference between those who scale to greatness and those who disappear isn’t luck—it’s how they make decisions when the stakes are high.
Whether steering a company through uncertainty or making strategic bets, effective decision-making is a defining trait of top executives. But how do they consistently make smart choices, especially with incomplete information?
This article explores the principles, frameworks, and mental models that help senior leaders make high-stakes decisions with confidence.
The Difference Between Tactical and Strategic Decision-Making
Many professionals advance by being great executors—efficiently solving problems and delivering results. However, executive leaders must go beyond execution and adopt a strategic decision-making mindset.
Tactical Vs. Strategic Decision-Making
📌 Focus:
- Tactical: Prioritizes short-term results and efficiency.
- Strategic: Focuses on long-term vision and overall business impact.
📌 Information Processing:
- Tactical: Uses clear, data-driven insights.
- Strategic: Works with incomplete data and relies on intuition.
📌 Risk Tolerance:
- Tactical: Seeks to minimize risk and optimize performance.
- Strategic: Balances risk and opportunity for future growth.
📌 Decision Criteria:
- Tactical: Focuses on task execution and operational efficiency.
- Strategic: Prioritizes competitive advantage and long-term growth.
📌 Key Question:
- Tactical: “How do we solve this problem today?”
- Strategic: “How does this decision impact our future?”
Executives don’t just respond to challenges—they shape business landscapes through proactive and visionary decision-making.
The Transition from Tactical to Strategic Thinking
Most leaders struggle with when to shift from tactical execution to long-term strategy. They spend years mastering execution—hitting targets, optimizing performance, and solving immediate problems. But once they step into higher leadership roles, those same habits hold them back.
The transition from “problem-solver” to “vision-setter” isn’t automatic—it’s a conscious shift that requires rewiring how you approach leadership.
Common Executive Mistakes
1️⃣ Getting Stuck in Short-Term Firefighting – Many executives spend too much time addressing urgent issues and neglect long-term strategy. While solving operational problems is important, failing to allocate time for big-picture planning leads to stagnation.
2️⃣ Over-Reliance on Historical Success – A strategy that worked in the past won’t necessarily work in the future. Successful leaders consistently challenge assumptions and look for new opportunities rather than just optimizing what already exists.
3️⃣ Failure to Balance Execution and Vision – A great strategy without execution is useless, but focusing only on execution without a guiding strategy leads to inefficiencies. Effective leaders strike a balance between strategic foresight and operational effectiveness.
When To Trust Instincts vs. Data
Great leaders know that decision-making isn’t always black and white. They must strike the right balance between relying on data-driven insights, experience-based judgment, and gut instinct.
Many executives assume decisions should always be data-driven. But data isn’t always available—or reliable. The best leaders know when to analyze, when to consult experts, and when to trust their instincts.
- GUT DECISION: Howard Schultz expanded Starbucks against conventional market research, trusting his vision of a premium coffee culture.
- DATA DECISION: Netflix relied on viewer data to shift from licensing content to producing originals like House of Cards.
The 3-Level Decision-Making Model
1️⃣ Level 1: Data-Driven Decisions – When clear trends and measurable outcomes exist, executives should prioritize data. This is common in financial forecasting, performance analytics, and A/B testing.
2️⃣ Level 2: Experience-Based Decisions – In complex situations where data is incomplete, executives rely on pattern recognition and past expertise. This is crucial in mergers, crisis management, and hiring top leadership.
3️⃣ Level 3: Gut Instinct Decisions – When neither data nor experience provides clarity, intuition plays a key role. This is most useful in disruptive innovation, bold strategic pivots, or crisis response.
How To Balance Instincts and Data
✔ Use data as the foundation but allow intuition to guide bold moves.
✔ Recognize when past experience is an asset vs. a limitation.
✔ Encourage diverse perspectives to challenge biases before making gut-driven decisions.
By leveraging the right approach at the right time, leaders can make calculated yet innovative decisions that drive long-term success.
Key Decision-Making Principles for High-Level Leaders
1. Prioritize First Principles Thinking
Great leaders break down problems into their fundamental truths rather than relying on assumptions. This approach helps them challenge the status quo and make more innovative decisions.
🔹 Example: Instead of assuming, “We need to hire more people to improve productivity,” an executive might ask, “What are the root causes of inefficiencies, and how can we address them beyond just adding headcount?”
📌 Steve Jobs and Apple’s Ecosystem: Steve Jobs applied First Principles Thinking when designing Apple’s product ecosystem. Instead of accepting industry norms, he reimagined the integration of hardware, software, and services, ensuring Apple’s products worked seamlessly together. This approach set Apple apart and created one of the most valuable brands in the world.
2. Embrace Probabilistic Thinking
No decision is risk-free. High-level leaders assess probabilities and make decisions based on likely outcomes rather than absolutes.
🔹 Example: A CEO deciding whether to expand into a new market might weigh market potential (60% success probability) vs. financial risk (40% failure chance) and determine if the upside is worth it.
📌 Netflix’s Bet on Streaming: Netflix used probabilistic thinking when transitioning from DVD rentals to streaming. The market data was incomplete, but they projected trends in internet bandwidth growth and consumer behavior. Betting on the long-term probability of success, they disrupted their own business model and revolutionized the entertainment industry.
3. Use the OODA Loop for Rapid Decisions
Developed by military strategist John Boyd, the OODA Loop helps leaders make fast, adaptive decisions in uncertain environments.
- Observe – Gather information about the situation.
- Orient – Analyze and contextualize the data.
- Decide – Choose the best course of action.
- Act – Implement the decision and reassess.
Executives cycle through this loop continuously, ensuring they stay agile in volatile conditions.
💡 Example Fix:
- Observe – Netflix observed DVD sales declining & streaming demand rising.
- Orient – They analyzed internet bandwidth growth & content licensing challenges.
- Decide – Despite uncertain market readiness, they committed to streaming.
- Act – They launched streaming & adapted based on early user behavior.
4. Apply the 10/10/10 Rule for Long-Term Impact
A simple but powerful framework by Suzy Welch, the 10/10/10 Rule forces leaders to consider how a decision will feel in different time horizons:
- How will I feel about this decision in 10 minutes? (Immediate reaction)
- How will I feel about it in 10 months? (Short-term impact)
- How will I feel about it in 10 years? (Long-term consequences)
This technique prevents impulsive decisions and aligns choices with long-term strategic goals.
How Bias Impacts Decision-Making
Most leaders think they’re rational decision-makers. They’re not.
Even at the highest levels, cognitive biases silently sabotage decisions—leading to missed opportunities, bad hires, and costly mistakes. Recognizing these biases isn’t just helpful—it’s a leadership necessity.
3 Decision-Making Biases That Hurt Leaders]
📌 1️⃣ Anchoring Bias – The First Idea Sticks Too Hard
- We tend to anchor decisions to the first piece of information we receive, even if better data emerges later.
- Example: A company sets an initial $50M valuation target, then refuses to adjust, even as market conditions change.
- How to Fix It: Before finalizing any major decision, force yourself to generate at least 3 alternative options.
📌 2️⃣ Overconfidence Bias – “I’m Sure I’m Right” Syndrome
- Experienced leaders often overestimate their ability to predict outcomes, ignoring contradictory evidence.
- Example: A CEO assumes their gut feeling about a new product launch is correct—without validating assumptions.
- How to Fix It:Run a “Pre-Mortem”—ask your team, “If this decision fails in 6 months, what would have caused it?”
📌 3️⃣ Loss Aversion – Playing Not to Lose Instead of Playing to Win
- Leaders often fear losses twice as much as they value gains, leading to overly cautious decision-making.
- Example: A company refuses to sunset an underperforming product because of the sunk costs involved.
- How to Fix It: Flip the question: Instead of asking, “What do we lose if we take this risk?” ask, “What do we lose if we do nothing?”
📌 4️⃣ Survivorship Bias – Mistaking Past Success as a Future Guarantee
- Leaders ignore the failures that never made it and overvalue successful past strategies.
- Example: Companies copy Amazon’s e-commerce model without realizing 90% of e-commerce startups fail.
- How to Fix:Before adopting a strategy, study not just the winners, but the failures.
🚀 The Bottom Line: Great leaders don’t just learn about biases—they build systems to prevent them from wrecking decisions.
Case Study: Nokia’s Fall from Market Dominance
Nokia was once the dominant mobile phone manufacturer but failed to adapt to the smartphone revolution. Leadership was anchored to the belief that hardware superiority would keep them ahead, ignoring the growing importance of software ecosystems. Overconfidence in their existing business model prevented them from making necessary changes, allowing Apple and Android to take over the market.
How Great Leaders Overcome Bias
1️⃣ Encouraging Dissent: Strong leaders actively seek out opposing viewpoints to challenge their assumptions. Jeff Bezos implemented the concept of “disagree and commit” at Amazon, ensuring diverse perspectives were considered before making decisions.
2️⃣ Using Data, Not Just Intuition: While intuition plays a role, balancing it with objective data can prevent emotionally driven decisions. High-performing executives rely on scenario analysis and market research to inform strategy.
3️⃣ Pre-Mortem Analysis: Instead of only planning for success, great leaders ask, “If this decision fails, what went wrong?” This technique, used by Ray Dalio at Bridgewater Associates, helps teams identify hidden risks before execution.
By actively recognizing and countering bias, leaders can make more rational and impactful decisions.
When to Bet on Instinct vs. When to Trust the Data
Every leader faces moments where gut instinct and hard data conflict. Should you wait for more information, or make the call based on experience and intuition? The best executives don’t blindly choose one approach—they assess the situation and apply the right framework.
When To Rely on Data-Driven Decision-Making
📌 Data should drive decisions when:
✔ There’s a clear track record – Historical data has proven reliable. (Example: Pricing strategy adjustments based on sales trends.)
✔ The decision is repeatable – The problem has occurred before and has predictable outcomes. (Example: Hiring based on performance metrics.)
✔ There are measurable benchmarks – You can use KPIs and analytics to forecast outcomes. (Example: Supply chain optimizations.)
💡 Example: Netflix & Predictive Analytics Netflix didn’t randomly choose to move into original content—they analyzed years of user data to predict what genres, actors, and storylines would succeed. The result? Hit shows like House of Cards and Stranger Things were greenlit with data-backed confidence.
When To Trust Instinct Over Data
📌 Instinct is necessary when:
✔ The data is incomplete or unreliable – Emerging markets, new industries, or never-before-seen challenges. (Example: Entering the AI market before regulations are defined.)
✔ It’s a high-risk, high-reward innovation decision – Groundbreaking ideas rarely have strong data behind them. (Example: Apple betting on the iPhone when BlackBerry dominated.)
✔ Your values and company vision outweigh short-term numbers – Some leadership decisions aren’t about immediate ROI but about long-term positioning.(Example: Nike supporting Colin Kaepernick, betting on long-term brand loyalty over short-term backlash.)
💡 Example: Howard Schultz & Starbucks’ Global Expansion
Data suggested Starbucks shouldn’t have expanded into European-style cafés in the U.S.—Americans weren’t spending time in coffee shops. But Howard Schultz trusted his gut, believing he could change consumer behavior. His instinct paid off, making Starbucks a global brand.
How Great Leaders Balance Instinct & Data
📌 1️⃣ Jeff Bezos’ “70% Rule” – Make Decisions Faster
“If you wait for 90% certainty before making a decision, you’ve waited too long.”
Bezos operates on the 70% rule—if he has 70% of the information he needs, he makes the call. High-performing leaders don’t wait for perfect data—they move and adjust.
📌 2️⃣ The “Data Gut Check” – A Quick Framework for LeadersBefore making a high-stakes decision, ask:
✔ Do I have at least 70% of the information I need?(If yes, proceed.)
✔ Would delaying this decision cause more harm than an imperfect choice?(If yes, act.)
✔ Am I ignoring the data because of ego or bias?(Gut instinct should be informed, not reckless.)
✔ Does my decision align with long-term strategy, not just short-term wins?(Big moves require vision.)
🚀 The Bottom Line: The best leaders don’t blindly follow data or instinct—they know when to apply each. When data is strong, use it. When data is weak, trust your experience. The key is making a bold decision and adapting as you go.
Final Thoughts: Trust the Process
High-level decision-making isn’t just about reacting—it’s about shaping the future with confidence and precision. The best leaders understand that every decision involves a balance of analysis, experience, and instinct. Those who master this balance avoid paralysis, take calculated risks, and create lasting impact.
Early in my leadership journey, making tough decisions felt paralyzing. I wanted more data, more certainty—anything to eliminate risk. But over time, I realized that discomfort is part of leadership. The best decisions rarely come with perfect information. Learning to trust my instincts, weigh probabilities, and move forward despite uncertainty made all the difference. The more I embraced discomfort, the better I got at making the tough calls. Great leaders don’t wait for certainty—they build the confidence to act in the unknown.
As legendary coach John Wooden once said: “Be quick, but don’t hurry.” The best leaders make decisive moves with thoughtful consideration, ensuring their choices drive meaningful progress without reckless urgency.
Key Takeaways
✔ Executives must shift from execution-focused to strategy-driven decision-making.
✔ Use First Principles Thinkingto challenge assumptions and create better solutions.
✔ Leverage models like Probabilistic Thinking, the OODA Loop, and 10/10/10for clarity.
✔ Always balance risk vs. opportunity—bold decisions define great leaders.
🚀 Hesitation is the biggest risk of all. The best leaders aren’t waiting for certainty—they’re the ones making bold moves before everyone else catches up.
Call To Action
Have you ever ignored data and made a gut decision that paid off—or one you regretted? Or have you relied on data and still failed? Let’s talk about it—drop your hardest leadership decision in the comments!
“You get what you expect, and you deserve what you tolerate.”
