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Decision Optimization

Decision Optimization
Optimized decision-making combines the CEO’s instincts and judgment with external perspectives. As decisions become more important and complex, leaders rely on the alignment and integration of these three variables to arrive at an optimized answer.

Solid business instincts help CEOs make both good decisions and snap determinations when necessary. These instincts are honed through education, study and most importantly, experience as a leader and in business. They also play a significant role in the most critical and strategically important decisions. It’s the gut check we do right before we sign a contract or that nagging sensation that tells us to take another look at our analysis. These business instincts can be challenging to identify, but refining them strengthens the foundation from which CEOs make decisions. As they continue to learn, gain experience and even make a few mistakes along the way, they sharpen this ability.

CEOs also apply their judgment to every decision they make. How much energy and thought is required varies based on the decision’s importance and complexity. Judgment builds on the CEO’s instincts by enabling them to integrate situational awareness of external factors, internal dynamics and anticipated outcomes based on an analysis of the available data. Judgment allows them to compare various alternatives, anticipating potential outcomes and weighing the cost, effort and benefit of each. However, when judgment conflicts with instincts, decisions stall and CEOs struggle. Like instincts, judgment improves over time as executives learn from the consequences of past decisions and make new ones.

As decisions grow in significance, CEOs should reach out to others to tap into their knowledge and experience. They can look to connect with like-minded business people who face the same opportunities or challenges, tapping into experience wherever they can find it. They can also seek out the advice and counsel of people they trust and respect. Expanding perspectives allows the CEO to augment their judgment with the experience and knowledge of experts and trusted advisors.

Balancing instincts, judgment and the perspectives gained from others allows CEOs to consistently make better decisions. High-performing CEOs make more good decisions than bad because they are always refining their instincts, improving their judgment and expanding their perspective to optimize their decision-making.

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