Leaders with good judgment listen for what’s unsaid. They surround themselves with people who will tell them what they need to know — not what they want to hear. And they think carefully about the risks of implementation — even for small projects.
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.
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—and offer suggestions for how to improve them.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.
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 for nonverbal clues about the quality of what we’re hearing.
Sometimes, what looks like sustained success may conceal trickery. Before the Enron scandal broke, in 2001, CEO Jeff Skilling was hailed as a highly successful leader. Toshiba’s well-regarded boss, Hisao Tanaka, resigned in disgrace in 2015 after a $1.2 billion profit overstatement covering seven years was unearthed. Bernie Madoff founded his investment firm in 1960 and for 48 years was seen as both successful and a man of the highest integrity.
The ability to detach, both intellectually and emotionally, is therefore a vital component of good judgment. But it’s a difficult skill to master. As research in behavioral economics, psychology, and decision sciences has shown in recent years, cognitive biases such as anchoring, confirmation, and risk aversion or excessive risk appetite are pervasive influences in the choices people make.
Obama was doing what all good leaders should do when told “We have no other option” or “We have two options and one is really bad” or “We have three options but only one is acceptable.” Other options almost always exist, such as doing nothing, delaying a decision until more information is available, or conducting a time-limited trial or a pilot implementation.
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