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How do CEO’s make decisions when faced with uncertainty?

Intuition or analysis?

How do CEO’s make decisions when faced with uncertainty?

Do your feelings inform your decisions, or do you rely on analysis? Or perhaps a mix of the two? We hear often these days how the future is uncertain. Both private and public sector organisations have to deal with increasing levels of uncertainty as they plan their future direction. What I can tell you is that every CEO I have had the privilege to coach over the last few years has used intuition rather than analysis to make key business decisions.

There is growing research into the way our intuition informs our decision making. Intuition is the word we use to describe an emotional signal giving us a red or green light. This can be tested by trying to make a decision where you have no emotional preference one way or the other – when you feel that you could go either way inertia or a feeling of indecision prevails. Have you ever looked through the window of a new restaurant and hesitated because on the one hand empty could mean people are avoiding it, or that it is new and undiscovered? With a lack of data how do you decide? How about a business context where you want to grow or diversify the business and there is insufficient data on which to decide exactly how? If you have had an experience like this you may intuitively feel the best thing to do.

Intuition and Values

If you have ever found yourself in an emotionally charged dispute then you know how the emotions are attached to personal values. In fact your emotions tell you what to value, and values inform decisions. Intuition is merely a short-cut to these values and the experience which created them. We have never once met a CEO whose decisions are formed through a written business plan. If any spreadsheet analysis has been done it has been in support of their decision and to provide a focus for others, never to help make a decision.

There are some common decision making strategies we have modelled in successful CEO’s, in a range of markets and from backgrounds as diverse as social entrepreneurship, retail, I.T, and engineering. Interestingly there are four main common aspects of their strategy which seem to be the key decision drivers.

  1. A predominantly visual representation of the future.
    They clearly see how the future can look and have very rapid access to internal images.
  2. They have a balance between ‘away from’ and ‘towards’ motivation
    The former acts as a starter to kick in their forward thinking motivation.
  3. They have strong feelings about decisions they need to take.
    They know exactly what a green light feels like and what a red light feels like.
  4. They are action oriented
    They have an internal motor which is driving them to make a decision, whether it is green or red, they need to decide quickly. Speed of execution is an essential component.

When we have modelled the cognitive strategy of CEO’s we have found that intuition is actually a super-fast review of past experiences and decisions, using the visual mode of thinking. In fact it is often so fast that they are doing it unconsciously. This can, and has, made their CFO’s and CIO’s nervous as they appear to be basing their decisions on no analysis at all – just a gut feeling. What they have missed however are the many events of visualising the past and future in order to formulate their decisions. Because it is so fast other people misinterpret the signals, especially if they have not been trained to model a person’s thinking process.

We always enjoy the light bulb moment when a CFO, or CIO suddenly ‘get’s it’. They begin to understand and recognise the opportunities of having a CEO with such powerful intuition, and this of course strengthens the trust in the team, turning nervousness into excitement. If you have this ability you know exactly what I am talking about, and I expect you may be somewhat frustrated with other members of the executive team who seem to be holding back the progress you can clearly see in your imagination, and that you can feel so strong in your body.

I see a lot of advice about getting smart in business, but not so much about how to get smart. We have the skills these days to model a person’s thought process, and it is such a revelation when you realise how simple it really is. At Quadrant 1 International we wonder how executive teams manage to navigate the uncertain territory which lies before them without such insight and capability to really know each other at this level. Getting smart for us is about working more effectively and harmoniously as an executive team, being able to map others’ decision-making processes and trusting the CEO’s intuition. This is the work we do with executive teams from different cultures and professional backgrounds, and the process of learning is exactly the same.

Call us on 0870 762 1300 or contact us via the form below to find out how we can help you and your team.

David Molden, FCIPD.

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