Judgement Daze? The Secret of Good Decision Making

I’ve mentioned in this blog before that I think that judgement is the most important yet often most underrated of business skills.  I suspect that’s because it’s difficult to quantify and that fits uncomfortably in a data-obsessed `if it can’t be measured it can’t be managed` world and the format of case study models force fed to MBA students. Yet it is particularly important to develop it in order to deal successfully with the daily realities and hurly-burly of entrepreneurialism.

Everybody makes poor decisions occasionally and that may be down to lack of time but more often it’s down to lack of judgement. But unlike native intelligence, judgement is not innate - it can be acquired and improved upon.  Of course, the base of good judgement is plenty of experience, but it’s how you interpret the lessons learned in life that’ll make your judgement more or less effective.

So how might you ensure you are not unwittingly stymying your chances of developing good judgement?

The Undisputed Truth?

The first thing to do is to consider the way you think about things. Much as you might like to pretend otherwise, like everyone else, your unique world view is shaped by your own ego, irrationality, prejudice, delusion and instinct for self-preservation.  It may be very far from being objective or even truthful.

To get a grip on how far you may be from reality questions you might want to ask yourself include: Are your decisions really all about your needs or about the needs of others? Are you more driven by fear of failure or desire for success? Do you sweat the small stuff or enjoy exploring the big picture? Are you more likely to plan strategically for the future or do you prioritise tactically for the short term? Are you an optimist or a pessimist? Are you risk averse or do you enjoy change? Do you tend to worry and vacillate or are you more prone to making quick, impulsive decisions? Do you stick to what you know and the familiar or do you seek new knowledge and experiences? Do you need to be recognised or hate it if the limelight shines on you?  Do you keep problems and challenges to yourself or do you socialise them?
 
Like so much of our behaviour, the characteristics that these sorts of questions reveal have been formed by a complex mixture of nature and nurture. Changing our most basic instincts handed down through generations and formed over decades is hard going, but the mere fact of being aware of their existence is the first step to overcoming the bias inherent in every one that can be exposed by such self-examination.   Every step you take in that direction will help you minimise their adverse effects on your decision-making, which will cumulatively improve your judgement.

Once you’ve started to engage with your own, subjective weltanschauung, the second thing that helps make for increasingly better judgement over time is to learn to prioritise all the demands that as an entrepreneur are placed on you every day.

A Certain Ratio
We’re all familiar with the Pareto Principle – the split of 80/20 that’s traditionally been applied to many things in life and business.  But, increasingly in a digitally-enabled world, I’m becoming more of the opinion that it’s the 90/10 rule that applies.  In this case, that means trying to devote 10 per cent of your time to 90 per cent of the decisions, and 90 per cent of your time to 10 per cent of the decisions.

The reason is simple: the vast majority of the decisions you are required to make are about unimportant and undemanding ephemeral `stuff`.  These can be automated or delegated.  The more effectively you do this, the more focus you can put on applying your brainpower to vitally important matters: business planning ; big investment and partnering opportunities; meetings with key customers; succession planning; ethical quandaries and other complex problems that need time and energy to think through and are important to get right.

This approach can be used in conjunction with a clear `magic square` approach to prioritisation using  the axes `urgent` and `important`.  Ask yourself to what extent tasks are urgent and important; urgent and not important; not urgent but important or not urgent and not important?  Take what’s on your plate and place each in a position in the square.  The further to the top right the tasks appear will dictate the order in which they should be tackled and the top ten per cent on which you should focus.

Tricky
But the tricky thing about good judgement is that it’s about more than just your initial satisfaction with your own decisions.  Judgement is not a process that is completed in isolation.  Once a decision is made, you have to prove both to yourself and others that it is the correct choice in the circumstances.  If you don’t truly believe it you can bet you’ll fail to convince others. And that’s a problem because in order for good judgement to be effective you need to bring others with you.  It’s a social skill.  In fact, if others don’t think you have good judgement then you can be pretty sure you don’t. 

Lastly, it’s important to realise the problems that we face in life and business rarely have an absolute resolution.  Whether we have made the right or wrong decision depends on whether we achieve or come close to the outcome we intended and our colleagues bought into. You need to have a common sense of what success looks like. And more than dash of common sense too.

Whatever the outcome, learn from the process. Whether you were exercising judgement or were affected by decisions it influenced.  But be sure in doing that if you don’t learn to fail you’ll fail to learn because, as I said earlier, good judgement comes from lots of experience.  But the best teacher is the consequences of bad judgement.