When a young banker asked a retired banker what the secret to success in banking was, the older banker replied, “Good judgment.”
The rookie continued: “How do you make a good judgment?”
“Experience,” said the older banker.
“How did you gain experience?” asked the young man.
“Misjudgment,” said the retired banker.
Anyone who has ever been in business can identify with this story.
As a business leader and parent, one of the qualities I value most is a person’s good judgment. Judgment is the result of a person’s decisions. Making decisions is a lot easier when your values are clear.
Nothing can replace good judgment. International Judgment Day falls on 17 January every year.
Leadership expert Warren Bennis says: “Faced with ambiguity, uncertainty and conflicting demands, often under enormous time pressure, leaders must make decisions and act effectively to ensure their Organizational survival and success.” “This is how leaders add value to their organizations. They do so by exercising good judgment, making informed decisions when particularly difficult and complex decisions must be made, and then ensuring that they are Executed properly so that they can be successful.”
Leaders and team members face a variety of challenges every day: budgets, errors, delays, staffing, conflicts, safety, profits. All of these require decisions that can affect the future of the organization.
What skills do you need to improve your judgment?
- Morality is about knowing what is right and what is wrong. Is it fair and legal? When I talk about ethics in a talk, I introduce the subject like this: “Act like your mom is watching.”
- Expect consistency. You cannot allow emotions or stressful situations to cloud your judgment.
- Listen and learn. Listening to others allows you to gather and evaluate important information instead of relying on your opinion or personal bias.
- Accept your mistakes. Accept responsibility and move forward. It’s important to learn from your mistakes, find out what went wrong, and not repeat the same mistakes.
- Learn from experience. As I said at the beginning, nothing improves your judgment like experience. If things go wrong, do things differently next time, and if things go well, learn from your decisions.
Along with these skills, John Spacey, writing for Simpliable.com, emphasizes the need for pragmatism and situational awareness. Accepting “difficult real-world conditions such as uncertainty, gray areas, and imperfection” is necessary to make informed and rational decisions. Equally important, he wrote, is “the ability to be highly observant and to respond diligently to rapidly changing situations.”
Here’s another story to illustrate my point. A business owner nearing retirement has invested her life savings in a business that was carefully explained to her by a scammer.
When her investments disappeared and her bright dreams were shattered, she went to the offices of the Better Business Bureau. They asked, “Why the hell didn’t you come to us first? Don’t you know the Better Business Bureau?”
“Oh yes,” said the businesswoman sadly. “I’ve always known about you. But I didn’t come because I was afraid you would tell me not to.”
It’s a sad story we hear over and over again. Sadly, her judgment didn’t allow her to ask the questions she might have about the proposed investment. Simple but necessary question could have saved her life from regret.
McKay’s Morality: Judgment is knowing which door to open when opportunity knocks.
Harvey Mackay is a Minneapolis businessman. Contact him at 612-378-6202 or email firstname.lastname@example.org.