We've been talking about big decisions, but there's a lot more to running a business than making one life-or-death decision, right?

No decision, no matter how big, is any more than a small fraction of the total outcome. Yes, some decisions are much bigger than others, and some are forks in the road. But as far as what determines outcomes, the big decisions are not like 60 of 100 points. They're more like six of 100 points. And there's a whole bunch of others that are like 0.6, or 0.006. They add up to a cumulative result. Business schools have regrettably taught us that it's all about the singular case decision. And when you and I write, we like the dramatic moment of decision.

Right. So-and-so leaned back in his chair, looked out the window, and said, "Should I do X or Y?"

But that's not the way life really happens. Yes, there are pivotal decisions, but it's really the stream of decisions over time, brilliantly executed, that accounts for great outcomes.

What elements of a leader's psychology, or the com­pany's psychology, affect decision-making?

One big factor is, Do you believe that your ultimate outcomes in life are externally determined—"I came from a certain family, I got the right job"? Or do you believe that how your life turns out is ultimately up to you, that despite all the things that happen, you are ultimately responsible for your outcomes?

Consider the airline industry, and think of all the events and factors outside managerial control that have hit it since 1972: fuel shocks, interest rate spikes, deregulation, wars, and 9/11. And yet the No. 1 performing company of all publicly traded companies in terms of return to investors for a 30-year period from 1972 to 2002 is an airline. According to Money magazine's retrospective look in 2002, Southwest Airlines beat Intel, Wal-Mart, GE—all of them! Now what would have happened if the folks at Southwest had said, "Hey, we can't do anything-great because of our environment"? You could say, "Yeah, the airline industry is terrible. Everyone in it is statistically destined to lose money." But at Southwest they say, "We are responsible for our own outcomes."

Are you saying that you can control your own destiny with good decisions?

Not entirely. Luck is still a factor. But overall our research is showing that the primary factors re­side more inside your control than outside. Yes, the world throws a lot at us, but the fundamental assumption needs to be like Southwest's—the ultimate responsibility for your destiny lies with you. The question is not what the world does to you but how you make an impact on the world. Decision-making is ultimately a creative act.