For C-suite leaders, basically altering how selections get made usually requires overcoming unconscious biases and behaviors and ingrained organizational obstacles. But CEOs and their management groups can dramatically enhance the standard of their decision-making by heeding three fundamental rules: utilizing course of, not outcomes, to evaluate the standard of selections; fostering a tradition of belief and collegial dissent; and leveraging uncertainty for aggressive benefit. Changing entrenched decision-making habits isn’t straightforward, however the dimension of the potential prize—the profitable reinvention of your small business—makes it definitely worth the effort.
It is our decisions, Harry, that present what we really are, excess of our talents.”
—Albus Dumbledore, in Harry Potter and the Chamber of Secrets, by J.Okay. Rowling
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A sound course of doesn’t eradicate uncertainty from decision-making. Rather, it helps leaders handle uncertainty in a extra advantageous and strategic manner. As exterior disruptions enhance the stress to reinvent the enterprise, that uncertainty usually takes the type of novel and untested alternatives, which executives should get higher at dealing with—and even simply recognizing. That means asking themselves not merely whether or not they could be pursuing the mistaken alternatives—a so-called error of fee—however, extra critically, whether or not they could be committing an error of omission by lacking alternatives altogether.
3. Leverage uncertainty
Neither of these issues is feasible with out strong inner suggestions mechanisms that promote dissent and debate, each of which PwC’s Global Workforce Hopes and Fears Survey 2023 has proven to be highly effective catalysts for belief:
Though executives need trustworthy enter, they inevitably discover themselves surrounded by individuals who could also be hesitant to supply it. After all, who needs to contradict the boss? It’s a circumstance that results in inferior selections that depend on lacking or incomplete data. Breaking out of the chief echo chamber means casting a large web for contradictory viewpoints, and ensuring that challenges to government considering aren’t solely permissible however inspired.
2. Foster belief, debate,
and dissent
In an article in California Management Review, Olivier Sibony, Dan Lovallo, and Thomas C. Powell recognized three key sorts of company-level strategic determination processes which can be significantly vulnerable to behavioral biases: funding selections, similar to mergers and acquisitions and product launches, which might fall prey to overconfidence and unrealistic optimism; useful resource allocation selections, which could be negatively impacted by anchoring (a bent to depend on the data most readily at hand, similar to final yr’s funds); and blue sky selections, similar to these involving new methods and new markets, which could be vulnerable to the halo impact (misattributing a number of constructive outcomes to a single engaging attribute). The authors assert {that a} useful option to fight unconscious biases is a firm-level determination “structure” that may be effectuated by seven highly effective levers:
Senior leaders are used to judging strategic selections by their outcomes. And why wouldn’t they? In enterprise, outcomes matter. But in the case of decision-making, relying primarily on outcomes could be dangerous. That’s as a result of outcomes are sometimes decided by components outdoors a frontrunner’s management, together with luck. So, if not outcomes, what ought to information strategic selections? To put it bluntly: course of, course of, course of. When it involves determination high quality, course of is the one factor that leaders can absolutely management.
A wholesome determination course of is the sum of discrete, repeatable practices that assist cut back or eradicate particular person subjectivity and unconscious behaviors, similar to affirmation bias (tending to hunt data that helps current beliefs), affinity bias (unconsciously preferring folks like oneself), and establishment bias (favoring the present scenario over change).
1. Adopt a
course of mindset
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By delving into these finest practices, this situation of s+b explores how enterprise leaders can retool their strategic decision-making within the face of steady disruption. Doing so comes down to a few imperatives:
Adopting a course of mindset
Fostering belief, debate, and dissent
Leveraging uncertainty
By getting these strikes proper, not solely can leaders higher navigate reinvention; they’ll reap concrete advantages within the right here and now. When PwC carried out additional evaluation of information from the CEO Survey, a constructive affiliation emerged between good decision-making practices (as represented by a call high quality index) and revenue margins:
CEOs are used to creating powerful selections beneath fireplace. That’s why they’re CEOs. But the unprecedented pressures dealing with in the present day’s executives—particularly, local weather change, novel tech similar to AI, and social and financial disruption—are presenting leaders with stark decisions about how their firm makes cash and creates worth. Unfortunately, that reinvention stress can rapidly expose subpar decision-making habits. And when PwC’s twenty eighth Annual Global CEO Survey requested executives in regards to the extent to which they’ve adopted a collection of confirmed decision-making finest practices, the outcomes confirmed that there’s appreciable progress to be made:
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As reinvention stress rises, CEOs have to rewire their decision-making.
Illustrations by Martin Barreto
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3. Leverage uncertainty
2. Foster belief, debate, and dissent
1. Adopt a course of mindset
©2025 PwC. All rights reserved. PwC refers back to the PwC community and/or a number of of its member corporations, every of which is a separate authorized entity. Please see www.pwc.com/construction for additional particulars. Strategy+enterprise is printed by sure member corporations of the PwC community. Articles printed in technique+enterprise don’t essentially signify the views of the member corporations of the PwC community. Reviews and mentions of publications, merchandise, or providers don’t represent endorsement or suggestion for buy. Mentions of Strategy& consult with the worldwide workforce of sensible strategists that’s built-in inside the PwC community of corporations. For extra about Strategy&, see www.strategyand.pwc.com. No copy is permitted in entire or half with out written permission of PwC. “Strategy+enterprise” is a trademark of PwC. Cookie Policy
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Your ten-minute power-read for March 2025
7 min
Lang Davison
Global Thought Leadership, Managing Director
Luna Corbetta
Workforce Transformation, Pharma and Life Sciences, Principal, PwC US
Wayne Borchardt
Global Thought Leadership, Director
Contact us
Kick-start your reinvention
Tapping ecosystems to energy efficiency
What leaders at successful firms know—and what you must study
When is the appropriate time to reinvent your small business?
PwC’s Global Workforce Hopes and Fears Survey 2024
PwC’s twenty eighth Annual Global CEO Survey
Further studying: Go deeper on main by way of reinvention
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What’s extra, the evaluation confirmed the same relationship between determination high quality and the chance of taking enterprise actions related to reinvention. That discovering sheds gentle on a fundamental reality: being a greater decider may also help leaders forge a path to the sorts of breakthrough concepts that may set in movement significant reinvention.
—Peter Drucker, creator and educator
To abandon something is at all times bitterly resisted.”
A very good determination structure is one by which executives apply these levers selectively and with various levels of energy. Consider, for instance, an organization that lacks established processes for evaluating mergers and acquisitions. When a possibility arises, the management and board fall into overconfidence and wishful considering. As a consequence, they overpay for the goal and fail to comprehend full worth from the deal. For giant, one-off funding selections like these, larger ranges of ritual, layering, and closure may also help to scaffold determination processes and neutralize extra optimism. No matter what actual mixture of levers is being deployed, the takeaway is similar: following an excellent course of will increase the chance of getting good outcomes.
—Margaret Heffernan, author and entrepreneur, from her TED Talk “Dare to Disagree”
A improbable mannequin of collaboration: considering companions who aren’t echo chambers.”
Trust, in flip, is determined by transparency and a collegial, team-based determination tradition. Corporate management groups may also help executives—and people they delegate to—be extra assured and clear deciders by:
assuming constructive intent on the a part of these providing dissenting viewpoints;
creating time to work together informally inside groups and throughout capabilities;
ensuring determination standards are conveyed past the C-suite and subjected to scrutiny;
guaranteeing that colleagues know the context for the selections they’re tasked with (e.g., the values, methods, and targets the selections are supposed to help);
guaranteeing that decision-makers have entry to the data they’ll want; and
demonstrating accountability for government selections and their penalties.
Trust wants to increase past the corporate partitions, too. As enterprise ecosystems turn into a significant mode of worth creation—already a actuality for a lot of top-performing firms—executives can radically develop their pool of opinions and viewpoints, sourced from trusted partnerships and alliances.
—Daniel Kahneman, creator and Nobel laureate
We concentrate on what we all know and neglect what we have no idea….”
Embedding the latter query within the determination course of can construct strategic foresight, a high quality that leaders of high-performing firms disproportionately possess—and disproportionately act on—in line with PwC analysis. Building strategic foresight means enhancing the power to detect market shifts and different early inflection factors and alerts of accelerating reinvention stress. It’s an inherent ability that Columbia Business School professor and creator Rita McGrath calls “seeing round corners.”
That type of acuity isn’t a magical energy, although. It can rely largely on one other decision-making finest follow: contemplating particular person selections inside the context of the corporate’s better portfolio of alternatives, which may also help situate extremely unsure strikes and outcomes in a broader context. CEOs can do that by mapping execution uncertainty (“Can we do that?”) to market uncertainty (“Will the market need this?”), assigning specific possibilities to every potential end result, and spreading investments and actions throughout this chance matrix in optimum methods.
Cutting throughout these actions is a willingness to floor some selections within the precept of “clever failure,” as articulated by Harvard Business School professor Amy Edmondson. Intelligent failure accepts that experimentation—and the danger of failure accompanying it—is typically the one path to success within the face of uncertainty. The central message: some failures are smarter than others as a result of they assist us determine a path towards eventual success.
©2024 PwC. All rights reserved. PwC refers back to the PwC community and/or a number of of its member corporations, every of which is a separate authorized entity. Please see www.pwc.com/construction for additional particulars. Strategy+enterprise is printed by sure member corporations of the PwC community. Articles printed in technique+enterprise don’t essentially signify the views of the member corporations of the PwC community. Reviews and mentions of publications, merchandise, or providers don’t represent endorsement or suggestion for buy. Mentions of Strategy& consult with the worldwide workforce of sensible strategists that’s built-in inside the PwC community of corporations. For extra about Strategy&, see www.strategyand.pwc.com. No copy is permitted in entire or half with out written permission of PwC. “Strategy+enterprise” is a trademark of PwC. Cookie Policy
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Harriet Newlyn
HR Transformation & Technology
Leader — Global Workforce,
Partner, PwC UK
Kathy Parker
Global Workforce
Strategy Leader,
Partner, PwC Canada
Peter Brown
Global Workforce Leader,
Partner, PwC UK
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