Good leaders make bad decisions.
Experienced executives approve investments that destroy value. Capable Boards endorse strategies that later prove fundamentally flawed. Successful businesses enter markets they should have avoided. Organisations commit significant capital to transformation programmes whose underlying assumptions were never properly tested.
In retrospect, some of these decisions can look surprisingly obvious. But hindsight is deceptive. At the moment the decision was made, there was often a credible strategy, persuasive analysis, experienced people around the table and a reasonable argument for proceeding.
So why do good leaders still get consequential decisions wrong? The answer is rarely that they suddenly became less intelligent. More often, something happened around the decision.
Experience is valuable. But it can become an assumption.
Experience creates pattern recognition. It helps an executive see similarities between a new situation and situations encountered before. But the more often a judgement has proved correct, the easier it becomes to assume that the pattern will repeat.
The danger is not experience itself. It is allowing “I have seen this before” to substitute for “What is different this time?” Good judgement uses experience as evidence. Poor judgement can turn experience into certainty.
The first credible answer can become too powerful.
Many important decisions begin with a proposal. Once the first credible option appears, the organisation can begin analysing whether that proposal should proceed rather than asking which course of action is actually best.
Those are different questions. The first encourages validation. The second requires comparison.
Before asking “Does this work?”, leadership should ask: “Compared with what?”
More information does not necessarily produce a better decision.
Executives today have access to extraordinary amounts of information. But information quantity and decision quality are not the same thing. What assumptions drive the recommendation? How reliable are the forecasts? Which claims are facts and which are expectations? What information would cause us to change our view? What do we still not know?
Sometimes the problem is not insufficient analysis. It is insufficient discrimination between evidence that informs the decision and information that merely surrounds it.
Consensus can conceal weakness.
Boards and executive teams understandably value alignment. Once a decision has been made, organisations usually need leaders pulling in the same direction. But consensus becomes dangerous when it arrives too early.
Strong leadership teams therefore need to distinguish between alignment after a decision and agreement before a decision. Before commitment, disagreement can be valuable.
Success can make challenge harder.
A strategy can have been exactly right for the conditions under which it was developed without remaining right as those conditions change. The important question is not “Has this strategy worked?” It is “What must remain true for this strategy to continue working?”
Commitment changes judgement.
Some of the most difficult executive decisions occur after an organisation has already invested heavily in a chosen direction. New evidence is no longer assessed in a neutral environment. It competes with the organisation's desire to justify what has already been committed.
This is why consequential decisions should establish review conditions before commitment, not after problems emerge. Leadership should know in advance what evidence would cause reconsideration, what milestones must be achieved, what can remain reversible and at what point it would stop.
Confidence is not certainty.
A recommendation can be clear without pretending uncertainty has disappeared. Where confidence is high, decisive commitment may be appropriate. Where uncertainty remains material, leadership might stage investment, establish additional conditions, preserve exit options or require further evidence.
The goal is not certainty. It is appropriately calibrated commitment.
A good outcome does not prove that the decision was good.
If organisations judge decision quality only by outcomes, they risk learning the wrong lessons from both success and failure. The better question after a consequential decision is: Given what we knew at the time, did we make the decision well?
Organisations develop decision habits.
Organisations develop norms around challenge, evidence, escalation, dissent and commitment. Over time, these habits can either strengthen institutional judgement or quietly weaken it.
The question, therefore, is not only whether an organisation has good leaders. It is whether the organisation has created the conditions in which those leaders can consistently make consequential decisions well.
Better decisions require better conditions for judgement.
Before the next consequential decision, a Board or executive team might ask seven questions:
- Are we solving the right problem?
- What credible alternatives have we considered?
- What does the evidence actually support?
- What must be true for our preferred option to succeed?
- What is the strongest credible case against it?
- How confident should we actually be?
- Given that confidence, what should we commit to now—and what should remain reversible?
None of these questions guarantees a good outcome. That is not possible. But together they make it harder for experience to become overconfidence, for analysis to become validation, for consensus to suppress challenge and for commitment to outrun evidence.
The discipline of Decision Excellence™
At Base & Hightower, this conviction sits behind our thinking on Decision Excellence™: better organisational outcomes are often shaped by the quality of judgement behind consequential decisions.
Decision Excellence™ is not about removing uncertainty or replacing leadership judgement with a formula. It is about bringing greater discipline to how important decisions are framed, evidenced, challenged, judged and committed to.
The objective is not to create leaders who never make a bad call. It is to build organisations that become better at making the decisions that matter.