Latest / Executive Careers with Fexingo: VP, C-Suite, and Senior Leadership Career Strategy / How Executives Measure Decision Quality Over Time
Transcript
- Lucas: If we've helped you think through a career move or decision this week, consider that your next step might be supporting the show directly. We deliberately don't run ads on these episodes because we want the content to stand on its own merit, not on click-through rates. If you want to support that choice, the link is buy me a coffee dot com slash fexingo. Luna: Yeah, it really keeps the focus where it belongs, on the signal rather than the noise. Let's get into it. Lucas: There is a pervasive myth in executive circles that good leadership is synonymous with good outcomes. We see it constantly when boards evaluate CEOs or when VPs pitch for promotion. The narrative is always: if the stock went up or the revenue hit the target, the leader made the right call. If they missed, they failed. It is a binary, outcome-based scoring system that ignores the probability space existing at the moment of decision. Luna: Right, and that’s exactly what leads to rewarding lucky breaks while punishing disciplined risk-taking. You end up with leaders who are great at gambling, not great at strategy. Lucas: Exactly. And the cost of that misalignment is high because it distorts talent development. If you reward outcome alone, you encourage short-termism and hidden risks. The alternative framework, which I want to drill into today, is Decision Quality. It was popularized by Stanford professor Max Bazerman and others, but it has become a critical differentiator for senior leaders who want to build durable reputations rather than fleeting ones. Luna: So we are talking about auditing the process, not just the profit and loss statement at the end of the quarter. Lucas: Precisely. Decision Quality rests on four pillars. First, you need relevant information. Not all data, but the specific signals that change the odds. Second, you must create credible alternatives. Most executives fail here because they present two options: do nothing, or do the big pivot. There is rarely a third path that balances risk and reward better than either extreme. Third, you need clear values and trade-offs. What are you willing to sacrifice? Fourth, you need correct reasoning. Does the logic hold up under stress testing? Luna: That second point about credible alternatives is something I see break deals all the time. People sell the binary choice because it’s easier to defend. Lucas: It is easier to defend, yes. But it is also easier to destroy. When you only offer two paths, you force the board or your stakeholders into a corner. A leader who presents three distinct, well-reasoned alternatives demonstrates cognitive flexibility. They are showing that they have mapped the territory, not just pointed at the horizon. This is how you build decision capital. Luna: But doesn't having three options make the meeting longer? Senior leaders are already stretched thin on time. Lucas: Time is cheap compared to bad decisions. Consider the case of Microsoft under Satya Nadella. One of his first major shifts was moving away from a Windows-first mindset toward a cloud-first, mobile-first approach. He didn't just announce a pivot; he created a structure where teams had to justify their resources against multiple scenarios. He forced his executive team to articulate why certain legacy products were being sunsetted, creating credible alternatives for every budget line item. That discipline allowed them to survive the transition from PC dominance to cloud infrastructure. Luna: And they did it without burning out the engineering teams by constantly changing direction mid-stream. Lucas: Right. Because the decision was quality-controlled upfront. Now, let's look at the tool that makes this actionable for individual executives: the decision journal. This is not a diary entry. It is a structured record kept at the time of the decision, before the outcome is known. You write down the context, the information you relied on, the alternatives considered, the expected probability of success, and the emotional state you were in. Luna: That sounds tedious. Who actually has the discipline to log every strategic choice they make over six months? Lucas: The ones who want to be exceptional, yes. And it doesn't have to be long. Three minutes per decision. The key is that you review it quarterly. When you open that journal after twelve months, you can compare your predicted probabilities against actual results. Did you claim eighty percent confidence when the reality was fifty percent? That gap reveals your calibration. Are you overly optimistic? Do you ignore negative signals? This feedback loop is how you improve your judgment over time. Luna: So it becomes a personal audit mechanism rather than a performance review imposed by someone else. Lucas: Exactly. And this protects you from what psychologists call hindsight bias. After a project fails, it is easy to say, 'I knew the signs.' But if your journal says you ignored those signs, you learn to listen to them next time. Conversely, if a project succeeds despite poor reasoning, your journal highlights that luck played a role. You don't reinforce bad habits because you got a lucky break. Luna: I think that’s the hardest part for people to accept. Admitting that a win was mostly luck feels like losing status. Lucas: It feels vulnerable, but it is actually the strongest form of professional integrity. When you admit, 'This worked, but my logic was flawed,' you invite scrutiny. That scrutiny improves future decisions. When you say, 'I am a genius, and it worked,' you isolate yourself. No one can challenge you, and no one can help you. You become brittle. Luna: Brittle leaders are the first to go when the market turns. They don't have a mechanism for correction. Lucas: Correct. Let's talk about the fourth pillar again: correct reasoning. This is where most executive training programs stop. They teach you how to analyze data, but not how to reason through ambiguity. In complex environments, you never have perfect information. You are making bets with incomplete datasets. The question is not whether you have enough info; it is whether you have enough to act responsibly. Luna: So how do you define 'enough'? Is there a threshold? Lucas: There is a concept called the OODA loop, originally from military strategy, which stands for Observe, Orient, Decide, Act. In business, the orientation phase is where you apply your mental models. If your model is outdated, your reasoning is flawed regardless of the data. For example, many tech leaders in the early two thousands used retail distribution models to evaluate software sales. The data looked good, but the reasoning was wrong because software has zero marginal cost. Recognizing that mismatch is the essence of correct reasoning. Luna: And now with AI integration, that model shift is happening again. Leaders are trying to fit AI capabilities into old operational frameworks. Lucas: Spot on. And that is where the decision journal shines. You can look back at your AI adoption strategies from eighteen months ago. Did you assume AI would replace labor, or augment it? If your prediction was replacement and the outcome was augmentation, you have a calibration error in your understanding of the technology. You adjust your mental model for the next round. That is continuous learning. Luna: It turns leadership into a scientific practice rather than an art form based on gut feel. Lucas: Gut feel is valuable, but it should be informed by calibrated experience. Amos Tversky, one of the founders of behavioral economics, argued that expertise is essentially the ability to recognize patterns from past experience. Without recording those experiences systematically, you lose the pattern recognition over time. You start relying on intuition that hasn't been tested against reality. Luna: So the journal acts as an external hard drive for your judgment. Lucas: Perfect analogy. Now, let's address a common objection. Some executives argue that keeping a decision journal slows down execution. In a fast-moving market, speed is king. Why pause to write down your thoughts? Luna: Because slow is smooth, and smooth is fast. Rushing usually means rework later. Lucas: Exactly. The time spent writing is minimal compared to the time spent fixing a bad strategic bet. Moreover, the act of writing forces clarity. When you try to explain your reasoning in text, gaps in your logic become visible immediately. You catch errors before they reach the boardroom. It is a pre-mortem exercise. You are stress-testing your idea on paper before you stake your reputation on it. Luna: I love that. It’s cheaper to fail on paper than in the public square. Lucas: Cheaper and safer. But there is a cultural dimension too. If you model this behavior, you give permission to your entire organization to do the same. You create a culture of psychological safety where people can admit uncertainty. If the CEO admits she isn't sure about the forecast, engineers and salespeople won't feel pressured to lie to please her. That transparency improves the quality of information flowing up the chain. Luna: That changes the whole dynamic of the weekly leadership meeting. Instead of posturing, it becomes a problem-solving session. Lucas: It does. And it filters out the politics. When decisions are judged on quality of process rather than outcome alone, office politics diminish. You cannot spin a bad process into a good outcome forever. Eventually, the law of large numbers catches up with you. Good decision-making compounds over time. Bad decision-making accumulates debt. Luna: Which brings us back to the career aspect. How does this specifically help an executive aiming for the C-suite? Lucas: It builds a track record that is defensible. When you interview for a CEO role, you will be asked about your biggest failures. If you have a decision journal, you can walk the interviewer through the thought process. You can show how you adapted. You demonstrate humility and analytical rigor. Those are traits boards look for more than raw aggression. You are showing that you are coachable and self-correcting. Luna: Self-correction is probably the most underrated skill in the C-suite. Everyone wants to be the hero who never makes mistakes. Lucas: Heroes are rare. Learners are sustainable. I think the practical takeaway here is simple. Start small. Pick one major decision you face this month. Write down the four pillars before you commit. Review it in three months. See if your brain has changed. It is a low-cost, high-leverage habit. Luna: Low cost, high leverage. That’s the executive mantra right there. So, start logging, start reviewing, and stop judging yourself solely by the scoreboard. Lucas: Exactly. Judge yourself by the quality of your thinking. The scores will follow. Thanks for listening.