How Good CEOs Can Avoid Making Bad Decisions

Few of us get through life without making at least a couple of bad decisions. But for CEOs, decision-making is the number one responsibility on the job description. The need for decisions can come fast and frequently every day. Under this kind of pressure, even good CEOs can make bad decisions. However, with a little effort, CEOs can minimize the danger. Here are some tactics and tips to help you avoid making bad decisions.

Hire Smart People — and Listen

You’ve probably heard the Lee Iacocca quote: “I hire people brighter than me and get out of their way” (Locker, 2019). What I would add is to take advantage of their brightness to help you in making decisions. Get input from several people you trust. Everyone may not agree, and you may not follow any one person’s advice exactly. But listening to and considering input is likely to spark new insights in your own mind.

This is also a great reason to make sure your team is diverse. Research indicates that diverse and inclusive groups make better decisions up to 87% of the time, and they make decisions twice as fast with half the meetings, compared to non-diverse groups (Larson, 2017). The key is getting input from a variety of viewpoints based on diverse life experiences.

Many CEOs also engage an executive coach or mentor. Typically this is someone with a good deal of experience and a track record of success. However, it can be helpful just to share your thoughts out loud.

Use Tried and True Tactics To Avoid Bad Decisions

There are many methods, and if you have a business degree, chances are you’ve heard some of them. A list of pros and cons is a simple idea, although the act of making one can challenge you to think carefully about different factors and possible outcomes. Cost/benefit analyses can be complex and time-consuming, but you can do a “down and dirty” one on a piece of scratch paper.

Consider as many potential outcomes and as many factors impacting the outcomes as you can. This can be challenging because of time constraints and pressing urgencies. To avoid getting buried by the urgencies, carve out uninterrupted time for yourself. Co-author Kim Shepherd and I discuss the importance of scheduling time for deep thinking in our book Remote Work: Redesign Processes, Practices and Strategies to Engage a Remote Workforce (2021).

Embrace the Emotional Component

In addressing groups of business leaders, I often ask if their decision-making is 100% rational or not. The typical answer is “yes,” and I think most people truly believe that they are completely rational in making business decisions. Neuroscientist Antonio Damasio begs to differ. In his book, Descartes’ Error: Emotion, Reason and the Human Brain (1994), he argues that all decision-making has an emotional element, even if we don’t consciously recognize it. Yes, even data-based decision-making.

If you recognize the role emotions play in your decision-making, you can manage their impact. Damasio traces the involvement of emotions to our earliest ancestors, who had to make life-or-death decisions in a split second, decisions like flight or fight. In many cases, such as meeting face-to-face with a saber-toothed cat, the emotional element of the decision-making process — unbridled, raw fear, for example — helped those ancestors make a decision that led to optimal outcomes.

Today the emotional element may involve the bad mood you are in because someone cut you off in traffic or the good mood you are in because you had a great weekend. It may run even deeper. Emotions may be a positive guide, or they narrow your thinking. One way or the other, assume that your emotions are involved and account for them.

Avoid Bad Decisions: Stay True to Your Values

Ensure your company values are clear, as those values are criteria used to inform decisions. Just about every company has a mission statement, but the mission is what you hope to achieve by applying your values in action, including decision-making. I expand on this topic in my book The Power of Company Culture: How Any Business Can Build a Culture that Improves Productivity, Performance and Profits (Dyer, 2018). As you consider different options, ask yourself if the option is consistent with your company values. If not, it may be better to set that option aside and consider alternatives.

Avoid Decision Fatigue

Humans have only so much brain power for making decisions in a day. Journalist John Tierney, citing two university research studies, puts it like this: “No matter how rational and high-minded you try to be, you can’t make decision after decision without paying a biological price” (2011). The more decisions one makes, the more likely it is that decision quality will diminish. Decision fatigue is associated with poor decisions, impulse buying and decision avoidance.

Successful business leaders know that their lives are filled with decisions, from what to wear to work to giving a thumbs up or down on a pending acquisition. Even the simple ones chip away at your decision-making bandwidth in a day. Some people avoid decision fatigue by making daily decisions (what to wear, what to have for breakfast, etc.) the night before. Some make a point of handling the most important decisions early in their day, whenever possible. If you must make a decision later in the day, try taking a short nap first, as sleep seems to reset the brain’s decision-making bandwidth.

Making decisions is a defining responsibility of CEOs and other business leaders. If you want to be a great leader, you should practice great decision-making habits. These habits and tactics may not prevent the occasional poor decision, but they will help minimize them.


Damasio, A (1994) Descartes’ Error: Emotion, reason, and the human brain. Harper Perennial, New York.

Dyer, C (2018) The Power of Company Culture: How any business can build a culture that improves productivity, performance and profits. Kogan Page, London.

Dyer, C and Shepherd, K (2021) Remote Work: Redesign processes, practices and strategies to engage a remote workforce. Kogan Page, London.

Larson, E (2017) New Research: Diversity + Inclusion = Better Decision Making at Work., September 21. Available from: [Last accessed September 25, 2022]

Locker, M (2017) ‘I hire people brighter than me and then I get out of their way.’ Nine of Lee Iacocca’s best quotes on leadership. Fast Company, July 3. Available from: [Last accessed September 25, 2022]

Tierney, J (2011) Do You Suffer from Decision Fatigue? New York Times Magazine, August 21. Available from: [Last accessed September 25, 2022]