The Elements of Good Judgment
A decision must be made. The facts have been assembled, and the arguments for and against the options spelled out, but no clear evidence supports any particular one. Now people around the table turn to the CEO. What they’re looking for is good judgment—an interpretation of the evidence that points to the right choice.
Judgment—the ability to combine personal qualities with relevant knowledge and experience to form opinions and make decisions—is “the core of exemplary leadership” according to Noel Tichy and Warren Bennis (the authors of Judgment: How Winning Leaders Make Great Calls). It is what enables a sound choice in the absence of clear-cut, relevant data or an obvious path. To some degree we are all capable of forming views and interpreting evidence. What we need, of course, is good judgment.
A lot of ink has been spilled in the effort to understand what good judgment consists of. Some experts define it as an acquired instinct or “gut feeling” that somehow combines deep experience with analytic skills at an unconscious level to produce an insight or recognize a pattern that others overlook. At a high level this definition makes intuitive sense; but it is hard to move from understanding what judgment is to knowing how to acquire or even to recognize it.
In an effort to meet that challenge, I’ve talked to CEOs in a range of companies, from some of the world’s largest right down to start-ups. I’ve approached leaders in the professions as well: senior partners at law and accountancy firms, generals, doctors, scientists, priests, and diplomats. I asked them to share their observations of their own and other people’s exercise of judgment so that I could identify the skills and behaviors that collectively create the conditions for fresh insights and enable decision makers to discern patterns that others miss. I have also looked at the relevant literatures, including leadership and psychology.
I’ve found that leaders with good judgment tend to be good listeners and readers—able to hear what other people actually mean, and thus able to see patterns that others do not. They have a breadth of experiences and relationships that enable them to recognize parallels or analogies that others miss—and if they don’t know something, they’ll know someone who does and lean on that person’s judgment. They can recognize their own emotions and biases and take them out of the equation. They’re adept at expanding the array of choices under consideration. Finally, they remain grounded in the real world: In making a choice they also consider its implementation.
Practices that leaders can adopt, skills they can cultivate, and relationships they can build will inform the judgments they make. In this article I’ll walk through the six basic components of good judgment—I call them learning, trust, experience, detachment, options, and delivery—and offer suggestions for how to improve them.
Learning: Listen Attentively, Read Critically
Good judgment requires that you turn knowledge into understanding. This sounds obvious, but as ever, the devil is in the detail—in this case your approach to learning. Many leaders rush to bad judgments because they unconsciously filter the information they receive or are not sufficiently critical of what they hear or read.
The truth, unfortunately, is that few of us really absorb the information we receive. We filter out what we don’t expect or want to hear, and this tendency doesn’t necessarily improve with age. (Research shows, for example, that children notice things that adults don’t.) As a result, leaders simply miss a great deal of the information that’s available—a weakness to which top performers are especially vulnerable because overconfidence so often comes with success.
Exceptions exist, of course. I first met John Buchanan early in a distinguished four-decade career during which he became the CFO at BP, the chairman of Smith & Nephew, the deputy chairman of Vodafone, and a director at AstraZeneca, Alliance Boots, and BHP Billiton. What struck me immediately and throughout our acquaintance was that he gave me and everyone else his undivided attention. Many people with his record of accomplishment would long ago have stopped listening in favor of pontificating.
Leaders with good judgment tend to be good listeners and readers.
Buchanan was more than a good listener—he was adept at eliciting information that people might not otherwise volunteer. His questions were designed to draw out interesting responses. He told me that when deciding whether to accept a directorship, for example, he would ask questions such as “Where would you place this company on a spectrum of white to gray?” “At first this sounds like a classic piece of managementese that is clever but meaningless,” he said. “Yet it is sufficiently open-ended to draw out replies on a wide range of subjects and sufficiently pointed to produce a meaningful response.”
Information overload, particularly with written material, is another problem. It’s not surprising that CEOs with huge demands on their time and attention struggle to get through the volume of emails and briefing papers they receive. As a director of a large listed company, I would get up to a million words to read ahead of a big meeting. Confronted with such a deluge, it’s tempting to skim and to remember only the material that confirms our beliefs. That’s why smart leaders demand quality rather than quantity in what gets to them. Three hundred pages for the next big meeting? It’s six pages maximum for agenda items at Amazon and the Bank of England.
Overload is not the only challenge when it comes to reading. A more subtle risk is taking the written word at face value. When we listen to people speak, we look (consciously or unconsciously) for nonverbal clues about the quality of what we’re hearing. While reading, we lack that context; and in an era when the term “fake news” is common, decision makers need to pay extra attention to the quality of the information they see and hear, especially material filtered by colleagues or obtained through search engines and social media exchanges. Are you really as careful in assessing and filtering as you should be, knowing how variable the quality is? If you believe that you never unconsciously screen out information, consider whether you choose a newspaper that agrees with what you already think.
People with good judgment are skeptical of information that doesn’t make sense. We might none of us be alive today if it weren’t for a Soviet lieutenant colonel by the name of Stanislav Petrov. It came to light only after the fall of communism that one day in 1983, as the duty officer at the USSR’s missile tracking center, Petrov was advised that Soviet satellites had detected a U.S. missile attack on the Soviet Union. He decided that the 100% probability reading was implausibly high and did not report the information upward, as were his instructions. Instead he reported a system malfunction. “I had all the data [to suggest a missile attack was ongoing],” he told the BBC’s Russian service in 2013. “If I had sent my report up the chain of command, nobody would have said a word against it.” It turned out that the satellites had mistaken sunlight reflected from clouds for missile engines.
Active listening, including picking up on what’s not said and interpreting body language, is a valuable skill to be honed, and plenty of advice exists. Beware of your own filters and of defensiveness or aggression that may discourage alternative arguments. If you get bored and impatient when listening, ask questions and check conclusions. If you’re overwhelmed by written briefing material, focus on the parts that discuss questions and issues rather than those that summarize the presentations you’ll hear at the meeting. (Far too many board packs are stuffed with advance copies of presentations.) Look for gaps or discrepancies in what’s being said or written. Think carefully about where the underlying data is coming from and the likely interests of the people supplying it. If you can, get input and data from people on more than one side of an argument—especially people you don’t usually agree with. Finally, make sure the yardsticks and proxies for data you rely on are sound; look for discrepancies in the metrics and try to understand them.
Trust: Seek Diversity, Not Validation
Leadership shouldn’t be a solitary endeavor. Leaders can draw on the skills and experiences of others as well as their own when they approach a decision. Who these advisers are and how much trust the leader places in them are critical to the quality of that leader’s judgment.
Unfortunately, many CEOs and entrepreneurs bring people on board who simply echo and validate them. The disgraced executives Elizabeth Holmes and Sunny Balwani of the start-up Theranos regarded anyone who raised a concern or an objection as a cynic and a naysayer. “Employees who persisted in doing so were usually marginalized or fired, while sycophants were promoted,” according to the Financial Times. Recently jailed for 18 years, Wu Xiaohui, the founder and leading light of China’s Anbang Insurance Group, had built up a diverse international empire, buying major assets that included New York’s Waldorf Astoria hotel. He also surrounded himself with “unimpressive people who would just follow his orders and not question them,” one employee told FT.
Read More at https://hbr.org/2020/01/the-elements-of-good-judgment