Decision Quality Assessment

Nearly 60% of CEOs evaluate their strategic decision capability based on outcomes rather than the quality of their decision-making process (PwC). It’s easy to see why. Outcomes are tangible, measurable, and at the end of the day, they’re the bottom line. Yet, decades of research show that using smart decision processes thoroughly beats congratulating yourself on outcomes. This is because outcomes are influenced by factors outside your decision scope—like market shifts, new regulations, or good old-fashioned luck. You could have a positive result because the market suddenly changed in your favor, or because a competitor stumbled. Or, a great decision could lead to an unfavorable outcome simply because of unexpected variables—like an economic downturn or an unforeseen risk. By the way, some of the most brilliant, value-creating moves I’ve seen came after a bad misstep or unexpected event prompted exec teams with stellar decision practices to re-evaluate and take advantage of the new conditions. (Insert your favorite example from early COVID here!)  When you evaluate your strategic decisions through the lens of the quality of your decision-making process it can reveal key insights: ✨ Clarity of information: Did you gather the right data? Were there gaps in your information? ✨ Diverse perspectives: Did you get a variety of viewpoints? Did you challenge assumptions? ✨ Navigating uncertainty: What risks were identified? Did you fully explore what you were unclear about? ✨ Alignment with values and mission: Did your decisions consistently reinforce the org’s larger vision? Were the decisions aligned with your org’s core values? ✨ Flexibility and agility: Did you stay flexible to new information or changing circumstances? ✨ Room for improvement: What worked well? What changes might be made next time? Focusing on the quality of your decision-making process reveals whether your decisions are based on thorough analysis, aligned with your strategic goals, and designed to be repeatable for long-term success. What could change for your team if you started measuring success by increasing the quality of your decisions instead of waiting for the results?

I am pleased to announce the publication of our recent article about the decision-relevance of risk management, co-authored with Prof. Dr. Kristian Giesen, in ZRFC 5/2025. As the article is only available in German and not open-access, we would like to share a brief summary with our international network. Our core argument is that risk management often remains a compliance exercise: risk catalogs, heat maps, and standardized reports are produced, but they rarely inform actual business decisions. This creates a gap between the normative aspirations of frameworks such as COSO ERM or ISO 31000 and the organizational reality in many firms. We argue that risk management only creates value when it actively supports decision quality. This requires: - Differentiating types of uncertainty (aleatory, epistemic, agnostic, ontological) and treating them appropriately. Epistemic uncertainty, in particular, can be reduced through structured analysis, expert input, and scenario-based work. - Integrating risk information into decision logic, by linking it to financial steering variables such as EBIT or cash flow, and by replacing static “traffic light” ratings with ranges, distributions, and scenarios. - Applying hybrid approaches, where quantitative methods (e.g., Monte Carlo simulations) are combined with structured qualitative dialogue (e.g., workshops, causal diagrams, scenario discussions). This enables a balanced perspective that is both analytically rigorous and managerially relevant. - Contributing to decision quality, following six well-established criteria: a sound decision frame, realistic alternatives, reliable information, explicit preferences, logical evaluation of options, and commitment to execution. Risk management can support each of these dimensions, thereby strengthening strategic decision-making. In practice, this translates into three compelling mechanisms: the reduction of epistemic uncertainty, the aggregation of risks into financially relevant steering variables, and the structured integration of different perspectives to foster collective reflection. Our conclusion is clear: risk management should not be confined to ex-post reporting or formal compliance. Its true purpose is to provide structured decision support under uncertainty and to act as a strategic partner for management. Only then does it fulfill its potential as an enabler of resilience and performance in today’s uncertain business environment. Institut für Finanzdienstleistungen Zug IFZ Lucerne University of Applied Sciences and Arts Stefan Behringer

5 Mental Models Elite Leaders Use for High-Impact Decisions. When I led complex transformation projects, I noticed something: The highest-performing executives weren't necessarily smarter. They just had superior decision frameworks. Leaders make 35-50 critical decisions weekly that shape organizational outcomes. Yet 67% of executives report making the wrong strategic decision at least half the time. Here are the 5 mental models that transformed my decision quality: 𝟭/ 𝗧𝗵𝗲 𝗗𝗲𝗰𝗶𝘀𝗶𝗼𝗻 𝗧𝗶𝗺𝗶𝗻𝗴 𝗥𝘂𝗹𝗲 Big decisions have big consequences. Time your decision process accordingly: → Operational decisions (impact < 1 month): 24 hours max → Tactical decisions (impact < 1 year): 1 week deliberation → Strategic decisions (impact > 1 year): Minimum 2-week analysis 𝟮/ 𝗧𝗵𝗲 𝟳𝟬% 𝗥𝘂𝗹𝗲 (𝗝𝗲𝗳𝗳 𝗕𝗲𝘇𝗼𝘀) → Below 40%: High-risk gambling → 40-70%: Calculated risk with potential for first-mover advantage → Above 70%: Diminishing returns on information gathering 𝟯/ 𝗜𝗻𝘃𝗲𝗿𝘀𝗶𝗼𝗻 𝗧𝗵𝗶𝗻𝗸𝗶𝗻𝗴 → Pre-mortem: "Imagine this initiative failed completely. What happened?" → Red-teaming: Assign your strongest thinkers to challenge your assumptions → Consequence mapping: Chart second and third-order effects 𝟰/ 𝗥𝗲𝗴𝗿𝗲𝘁 𝗠𝗶𝗻𝗶𝗺𝗶𝘇𝗮𝘁𝗶𝗼𝗻 𝗙𝗿𝗮𝗺𝗲𝘄𝗼𝗿𝗸 → Calculate the ROI of your best alternative option → Factor in hidden costs (team bandwidth, attention fragmentation) → Consider the compounding value of focus vs. dilution 𝟱/ 𝗦𝗲𝗰𝗼𝗻𝗱-𝗢𝗿𝗱𝗲𝗿 𝗧𝗵𝗶𝗻𝗸𝗶𝗻𝗴 → Document assumptions and expected outcomes → Set explicit review dates (30/90/180 days) → Analyze prediction accuracy and process quality The difference between good and great leadership isn't working harder. → It's making better decisions consistently. Which of these models would have the biggest impact on your leadership effectiveness?

We make decisions all the time, some small, some big. But how do we know we have made the right decision? The 4Cs of Excellent Decisions help you assess this upfront. Knowing whether a decision is good or bad is easy after the fact, once you know the results. The challenge is to know this at the time of making the decision. This applies to every decision, but becomes more important when the decision is • Complex • High impact • Costly • Irreversible Strategic decisions typically have all these four characteristics. This makes it particularly important to assess the quality of your strategic decisions before you actually make them. The follow criteria will help: CLEAR Is the decision clear, concrete and understood on all its facets?  Is it clear why it is made? Is it clear what the consequences are? Is it clear what it takes to implement it? CORRECT Is the underlying evidence accurate and correct? Are the assumptions leading to this decision correct? Is there sufficient qualitative or quantitative data to support the decision? Has the process for making this decision been correct? COMPLETE Are all important factors taken into account? Is the information needed to make this decision complete? Have all relevant stakeholders been involved? Have all alternatives been taken into account? CONSENSUS Is there a shared understanding of the decision and its context? Do relevant stakeholders agree on the decision made? Have all objections been carefully considered? Is it clear how to deal with those stakeholders that do not agree? These are the 4Cs of Excellent Decisions. Use them to evaluate all your important decisions. Think about your last key decision, did it fulfill all four criteria? === If you like this, you also like my The Strategic Leadership Playbook, which contains 64 tools like this with clear instructions for how to use them. Buy the book here: https://lnkd.in/eGz9AZwP #decisionmaking #leadershipgrowth #businessmanagement

The decision framework that transformed my leadership effectiveness: (Before: Intuition-based choices. After: Structured decision process.) Even experienced leaders make poor decisions when they lack a systematic approach. My decision-making evolution: At 26: Gut-feel decisions, inconsistent results At 32: Experience-based choices, better but still variable At 35: Framework-driven process, consistently superior outcomes Three elements that transformed my approach: 1. Pre-decision preparation → Question formulation clarity → Decision criteria definition → Information gathering protocol → Stakeholder perspective collection 2. Decision execution structure → Cognitive bias mitigation → Alternative option development → Consequence mapping → Probabilistic thinking 3. Post-decision learning → Outcome documentation → Process evaluation → Feedback integration → Decision journal maintenance Since implementing this framework: My decision quality has improved dramatically My team's confidence in leadership has strengthened Our execution alignment has increased Our learning from both successes and failures has accelerated The quality of your decisions determines the quality of your results. A systematic approach consistently outperforms intuition alone. How are you structuring your decision-making process? - Want boardroom intelligence with zero noise? Every week we share curated insights that cut through the chaos and help you make the best policy decisions: Join here: https://lnkd.in/garzxSxG LION Specialty. The Leader in Institutional Insurance. 🦁

In high-stakes decisions, “right” and “wrong” aren’t the point. Your method for making decisions matters more than any single result. Every major choice is a bet on a particular future. Decision quality and outcome quality are two entirely different things. Our brains want tidy stories, so we judge a decision’s quality by its outcome — a bias known as resulting. A brilliant process can still produce a bad outcome because of one unlucky break. Pete Carroll’s infamous Super Bowl call to pass from the 1-yard line was statistically sound, yet it’s reviled because it ended in a game-losing interception. To escape the trap of resulting, you need a better process. The world’s best venture capitalists use repeatable frameworks that protect them from bias and focus their attention where it matters most. Their playbook starts with two disciplines: 𝟭. 𝗦𝗼𝗿𝘁 𝘆𝗼𝘂𝗿 𝗱𝗲𝗰𝗶𝘀𝗶𝗼𝗻𝘀: 𝗢𝗻𝗲-𝗪𝗮𝘆 𝘃𝘀. 𝗧𝘄𝗼-𝗪𝗮𝘆 𝗗𝗼𝗼𝗿𝘀 Jeff Bezos uses this mental model to allocate energy: “Two-way doors” are reversible — make those decisions quickly quickly. “One-way doors” are consequential and nearly irreversible, so you should take them slow and deliberate. The first step to better decisions is knowing which door you’re facing. 𝟮. 𝗛𝘂𝗻𝘁 𝗳𝗼𝗿 𝗮𝘀𝘆𝗺𝗺𝗲𝘁𝗿𝗶𝗰 𝗯𝗲𝘁𝘀 Stop worrying about avoiding failure and start making sure your wins are big enough to make failures irrelevant. Don’t just assess the most likely outcome. Map the full range of possibilities. A bet with a 70% chance of a small loss but a 10% chance of a 100x return can be a career-defining win. Top VCs know they’ll be wrong most of the time. In fact, they’re not aiming to be right every time. They’re looking for situations where the upside of a win is exponentially larger than the downside of a loss. I’ll be diving deeper into the methodology behind high-quality decisions in my fall Maven cohort. It’s designed for entrepreneurs, investors, and exec decision makers who have to make dozens of decisions each day. Every decision is a bet on a forecast of the future. You have limited resources to figure out which prediction will have the best return in the long run. In my course, I’ll cover my 6-step process for better, faster decision making: https://bit.ly/4ljImns