The Decisive CEO, Genius or Gambler

In the acclaimed book The CEO Next Door, decisiveness emerges as a defining quality of high-performing CEOs. The authors argue that successful leaders make fewer but faster decisions, prioritizing clarity and speed over hesitation. It’s a mindset that has propelled some CEOs to remarkable achievements—and led others to catastrophic failures. So, as a CEO, should you embrace this approach? And more importantly, do you have what it takes to make it work?

We’ve seen shining examples of leaders who wield decisiveness as a strategic weapon. Jeff Bezos, founder of Amazon, exemplifies this with his "two-way door" decision-making framework. By categorizing decisions into reversible (“two-way doors”) and irreversible (“one-way doors”), Bezos empowers his teams to act quickly on reversible choices while reserving deliberation for high-stakes scenarios. Similarly, Netflix co-founder Reed Hastings is renowned for his minimalistic approach to decision-making, stepping in only for pivotal choices. A prime example of this was the greenlighting of House of Cards in a mere 30-minute meeting, trusting the groundwork laid by his team.

Lou Gerstner’s tenure at IBM offers another success story. Facing a company on the brink of collapse, Gerstner made the bold and immediate decision to halt plans to break up the company, choosing instead to focus on integrated solutions. This swift and decisive action is credited with IBM’s turnaround during one of its most critical periods. Likewise, Jack Welch, the legendary CEO of General Electric, championed rapid decision-making by dismantling bureaucratic structures and fostering a culture of agility—moves that significantly increased GE’s market value under his leadership. And Airbnb’s Brian Chesky draws on the concept of "founder mode," advocating for leaders to be deeply involved, make quick calls, and stay present in their organizations.

However, the path of decisive leadership isn’t without its pitfalls. Stephen Elop’s swift pivot at Nokia—abandoning the Symbian platform in favor of Windows Phone—intended to secure the company’s future but ultimately led to its market collapse. Dave Calhoun, CEO of Boeing, faced criticism for hastily resuming 737 MAX production, a decision that deepened public trust issues and financial losses. And Bernard Ebbers of WorldCom made rapid acquisitions without sufficient due diligence, culminating in one of the largest corporate scandals in history.

Fewer Decisions Mean Less Noise

The best CEOs understand that leadership is as much about clarity as it is about action. Fewer decisions mean less mental clutter, allowing leaders to focus on what truly matters. In a world where distractions are endless and stakes are high, this approach is both practical and strategic. Sundar Pichai, CEO of Alphabet, exemplifies this mindset. Pichai is known for fostering a culture of decentralized decision-making at Google, enabling his teams to act independently while he concentrates on larger, visionary decisions. This focus on reducing noise empowers innovation at every level of the organization, from self-driving cars to AI advancements like Bard.

The science supports this approach. Decision fatigue—a well-documented phenomenon where decision-making quality diminishes with excessive choices—underscores the importance of reducing unnecessary decisions. As Daniel Kahneman explains in Thinking, Fast and Slow, “Our mental energy is finite, and conserving it for high-impact decisions is critical.” CEOs who embrace this principle ensure they have the bandwidth to tackle complex challenges without being bogged down by operational minutiae.

Take Tim Cook, CEO of Apple, as another example. Known for his meticulous yet streamlined approach, Cook delegates product-level decisions to his team of experts, freeing himself to focus on Apple’s global strategy and supply chain resilience. This approach proved invaluable during the COVID-19 pandemic, when Cook swiftly restructured Apple’s operations to mitigate disruptions—a decision that required clarity and speed amid global chaos.

Minimizing decisions isn’t about avoiding action; it’s about channeling focus into what drives results. Leaders like Pichai and Cook succeed because they focus their energy where it counts, trusting their teams to handle the rest. The result? A sharper focus, faster execution, and an organizational culture that thrives on clarity and autonomy.

Faster Decisions Mean Fewer Missed Opportunities

In business, hesitation can be costly. The ability to act quickly often determines whether an organization seizes an opportunity or watches it slip away. Elon Musk, the CEO of Tesla and SpaceX, is a prime example of a leader who thrives on fast decision-making. Musk’s agility in making decisions—whether to acquire companies, pivot strategies, or take bold risks—has propelled Tesla to dominate the electric vehicle market and SpaceX to lead the private space industry. “If you’re not failing, you’re not innovating enough,” Musk once said, underscoring his belief in the value of moving fast and learning along the way.

Research backs up this philosophy. A study by McKinsey found that organizations with faster decision-making processes were twice as likely to have higher total returns to shareholders. Speed enables companies to capitalize on fleeting market trends and emerging opportunities before competitors do. As Jim Collins notes in Good to Great, “Great companies thrive not because they always make perfect decisions, but because they make decisions, period, and adapt as they go.”

Consider Indra Nooyi, the former CEO of PepsiCo. Known for her decisive leadership, Nooyi acted quickly on trends in health and wellness by launching a line of low-calorie and nutritious snacks—a move that redefined PepsiCo’s brand and bolstered its market share. Her quick decision-making ensured the company was ahead of consumer shifts, rather than playing catch-up.

Speed doesn’t just prevent missed opportunities; it creates momentum. A decisive leader fosters confidence within their team and signals to the market that their organization is ready to act. While faster decisions come with risks, leaders like Musk and Nooyi show that those risks are often outweighed by the rewards of staying ahead.

A Double-Edged Sword: When Fewer and Faster Decisions Backfire

Fewer decisions mean less noise. Faster decisions mean fewer missed opportunities. It’s a simple equation that has worked wonders for some leaders. But simplicity, as history shows, isn’t always a guaranteed success. For some CEOs, the same approach has led to critical oversights and even catastrophic outcomes.

Consider Adam Neumann, the co-founder and former CEO of WeWork. Known for his bold and swift decision-making style, Neumann rapidly expanded WeWork into new markets, often without thorough analysis of profitability or long-term sustainability. The strategy appeared visionary at first, driving rapid growth and a skyrocketing valuation. But when the company’s financial realities came under scrutiny during its attempted IPO, the lack of foresight in those fast decisions became glaring. The result? A valuation collapse and Neumann stepping down under pressure.

Another example comes from Marissa Mayer, the former CEO of Yahoo. Mayer made several quick, high-stakes decisions to revive Yahoo’s fortunes, including the acquisition of Tumblr for $1.1 billion—a move aimed at capturing younger audiences. While the decision was bold and executed swiftly, it lacked a clear integration strategy, and Tumblr’s value plummeted, leading to a $230 million write-down. Fast decisions without robust planning left Yahoo struggling to recover from missteps.

What Makes the Approach Work—or Fail

The success of making fewer and faster decisions often hinges on two critical factors: having a professional team you can trust and leveraging years of accumulated experience. In The CEO Next Door, Botelho and Powell argue that “decisive CEOs are ones who surround themselves with talented teams and delegate effectively.” When leaders build teams of experts and give them the autonomy to act, they can make high-level decisions without getting bogged down by every detail.

Equally important is experience. As Daniel Kahneman discusses in Thinking, Fast and Slow, the ability to make fast decisions is not about acting impulsively but about using heuristics—mental shortcuts based on experience and pattern recognition. Kahneman writes, “Experience teaches us patterns and helps us create simple rules of thumb for decision-making, but only after we’ve had the chance to accumulate the relevant information over time.”

Ultimately, fewer and faster decisions work best when backed by competence and wisdom. Leaders like Satya Nadella, Tim Cook, and Indra Nooyi succeed because they leverage strong teams and years of insight. For those still building their foundation, this strategy may lead to rushed decisions and high risks. As The CEO Next Door aptly concludes, “It’s not just about speed—it’s about having the right people and the right instincts to guide your choices.”