Executives make decisions by intuition

I learned recently that executives make decisions by intuition.  They rely on their own experience rather than consulting with the many resources they have at their disposal.

Huge office tower

Denise Chenger researched the decision-making processes employed by an executive to approve a major capital project decision in upstream oil and gas for her PhD research. She was surprised to learn how little influence senior managers had on executive decision-making. Often, by the time senior managers learn of the decisions, the time for influencing it has passed. Denise found that:

  • No resources were used to make the decision
  • No association found with economic indicators (“a good project is a good project”)
  • These were not unprincipled decisions (individuals displayed patience and strategy with timing)
  • Decision making was rather obvious and straightforward to the executive
  • Both executives and managers have a role in project initiation

Her presentation at a Workplace Fairness luncheon sparked some interesting debate about the role of collaboration in the workplace. What are the risks of increasing collaboration when confidentiality is at stake?   Denise pointed out that risk is highly individualized. I guess that is why some of us go sky diving and some of us don’t.

Information may be shared with the board, but by the time it filters down to front-line workers, 80% of it is lost in translation. Another point raised by one of our luncheon guests was that often in these discussions language is being translated as well. For example, project management language is not necessarily executive language. How much is lost as people share their expertise and experiences with others who are not in their knowledge circle?

Denise Chenger’s findings are relevant to industry because she has identified a crucial need for businesses to establish organizational processes and a learning culture which will enhance communication between executive and personnel, and measure all aspects of a project (not just financial).

These questions may not have ready and glib answers, but one thing I know for sure after listening to Denise, there is room for more collaboration in the C-suite.

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