Business executives are faced with complex decisions in an increasingly turbulent world because of globalisation of markets and rapid technological change. Inevitably some executives make effective decisions and others do not, but how do the processes differ between the two groups to lead to two very different outcomes?

Most research suggests that decision makers in complex situations bypass deliberate, rational analysis and depend on their intuition or cognitive shortcuts. This paper studies 19 oil company CEOs: 16 of whom are regarded as effective thinkers by their peers and experts and have a track record of running successful oil companies, and the other three, less so. The study finds that successful executives do not substitute intuition for rational analysis, but instead combine both in two iterative processes: 1) integration by essentials (IBE); and 2) spiralling.

IBE entails identifying fundamental cause-effect relationships and forming and using guiding principles based on such relationships. IBE governs intuitive (subconscious) storage and retrieval of all the relevant knowledge bearing on a decision. This allows spiralling, or rapid evaluation of the decision alternatives.

Spiralling involves zooming in on the most feasible alternative with the help of the identified principles, and using the principles to test and adjust the decision before committing to it. Besides these two processes, three thinking-related traits are shared by the effective CEOs — focus, motivation and self-awareness. The paper concludes with implications for effective decision making and further research.

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