Lessons from “Good Minds”: How CEOs Use Intuition, Analysis and Guiding Principles to Make Strategic Decisions

This paper examines how decision makers manage complex situations by combining rational analysis with intuition. Based on a study of 19 oil company CEOs, it identifies two processes used by the most effective CEOs: integration by essentials (IBE) and spiralling. Besides using these two processes, the effective CEOs shared three thinking-related traits: focus, motivation and self-awareness. The paper concludes with implications for effective decision making.

[1]  Donald C. Hambrick,et al.  Are you sure you have a strategy , 2001 .

[2]  Sven C. Voelpel,et al.  Strategic Management as Organizational Learning: Developing Fit and Alignment through a Disciplined Process , 2005 .

[3]  R. Yin.  Case Study Research: Design and Methods , 1984 .

[4]  Johan Roos,et al.  Decision-Making in High-Velocity Environments: The Importance of Guiding Principles , 2005 .

[5]  Ann Langley,et al.  Between 'Paralysis by Analysis' and 'Extinction by Instinct' , 1995 .

[6]  Charles R. Schwenk.  Management illusions and biases: Their impact on strategic decisions , 1985 .

[7]  R. Ireland,et al.  Intuition in strategic decision making: Friend or foe in the fast-paced 21st century? , 2005 .

[8]  J. Walsh.  Managerial and Organizational Cognition: Notes from a Trip Down Memory Lane , 1995 .

[9]  Lisa A. Burke,et al.  Taking the mystery out of intuitive decision making , 1999 .

[10]  E. Sadler‐Smith,et al.  The Role of Intuition in Strategic Decision Making , 2009 .

[11]  Scott J. Reynolds,et al.  A neurocognitive model of the ethical decision-making process: implications for study and practice. , 2006, The Journal of applied psychology.

[12]  G. Claxton,et al.  Intuition in Organizations: Implications for Strategic Management , 2009 .

[13]  Hayashi Am,et al.  When to trust your gut. , 2001 .

[14]  Henry Mintzberg.  The Nature of Managerial Work , 1974, Operational Research Quarterly (1970-1977).

[15]  D. Loebel,et al.  A gut feeling , 2005, Nature Biotechnology.

[16]  D. Isenberg.  Thinking and Managing: A Verbal Protocol Analysis of Managerial Problem Solving , 1986 .

[17]  Eric J. Walton,et al.  The executive mind , 1985 .

[18]  Scott Sonenshein.  The role of construction, intuition, and justification in responding to ethical issues at work: The sensemaking-intuition model , 2007 .

[19]  E. Sadler‐Smith,et al.  The intuitive executive:Understanding and applying ‘gut feel’ in decision-making , 2004 .

[20]  J. Pretz,et al.  Intuition versus analysis: Strategy and experience in complex everyday problem solving , 2008, Memory & cognition.

[21]  H. Simon,et al.  Making Management Decisions: the Role of Intuition and Emotion , 1987 .

[22]  H. Raiffa,et al.  The hidden traps in decision making. , 1998, Harvard business review.

[23]  R. Burchfield.  Oxford English dictionary , 1982 .

[24]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[25]  Manu Sridharan,et al.  Thin slicing , 2007, PLDI '07.

[26]  Harald S. Harung,et al.  More Effective Decisions through Synergy of Objective and Subjective Approaches , 1993 .

[27]  A. Tversky,et al.  Judgment under Uncertainty: Heuristics and Biases , 1974, Science.

[28]  Anselm L. Strauss,et al.  Qualitative Analysis For Social Scientists , 1987 .

[29]  Stewart Shapiro,et al.  Managerial intuition: A conceptual and operational framework , 1997 .

[30]  Leonard Peikoff,et al.  Introduction to Objectivist Epistemology , 1979 .

[31]  Gary Klein,et al.  Sources of Power: How People Make Decisions , 2017 .

[32]  J. McCann.  Strategies for Change: Logical Incrementalism , 1980 .

[33]  D. Isenberg.  Decision Making: HOW SENIOR MANAGERS THINK , 1988 .

[34]  Erik Dane,et al.  Exploring Intuition and its Role in Managerial Decision Making , 2007 .

[35]  Leonard Peikoff,et al.  Objectivism: The Philosophy of Ayn Rand , 1991 .

[36]  Dennis A. Gioia,et al.  Strategic Sensemaking and Organizational Performance: Linkages Among Scanning, Interpretation, Action, and Outcomes , 1993 .

[37]  K. Glaister,et al.  Breaking the frame: an analysis of strategic cognition and decision making under uncertainty , 1999 .

[38]  Edwin A. Locke,et al.  The Epistemological Side of Teaching Management: Teaching Through Principles , 2002 .

[39]  W. Agor.  The logic of intuition: How top executives make important decisions , 1986 .

[40]  Giovanni Gavetti,et al.  How strategists really think. Tapping the power of analogy. , 2005, Harvard business review.