For more than a century, business schools have been developing ways to teach students the basic tools of business—how to create and understand accounting documents, analyze cash flows, and appraise the strengths and weaknesses of strategic choices.
These tools and others like them can be vital to managers who are starting their careers, but their value typically diminishes as a person’s responsibilities increase. The reason is simple: The higher an executive advances, the more likely the job will involve making complex decisions that rely less on tools, and more on wisdom.
That’s especially true for chief executives. According to one rule of thumb, chief executives are never asked to make easy calls—if the decision was easy, it never ...