The Economist: A question of judgment

A question of judgment
A managerial quality that is hard to define but important to possess

Jul 18th 2020 edition

The pandemic has required many people to make difficult judgments. Politicians have had to decide which restrictions to impose on citizens' behaviour and individuals were forced to assess how much personal risk to take. Managers, faced with tough calls like which parts of their operations to close, have not been spared.

Good judgment is a quality everyone would like to have. But it is remarkably difficult to define precisely, and many people are not sure whether they personally possess it. Sir Andrew Likierman of the London Business School has spent a long time talking to leaders in a wide range of fields, from business and the army to the law and medicine, in an effort to create a framework for understanding judgment.

First he had to define the word. He suggests that judgment is “the combination of personal qualities with relevant knowledge and experience to form opinions and take decisions”. And he argues that, thus defined, judgment involves a process—taking in information, deciding whom and what to trust, summarising one's personal knowledge, checking any prior beliefs or feelings, summarising the available choices and then making the decision. At each stage, decision-makers must ask themselves questions, such as whether they have the relevant experience and expertise to make their choice, and whether the option they favour is practical.

Expertise can be useful in making judgments. But it is not the same thing. “Academics have expertise,” Sir Andrew observes. “They don't necessarily have judgment.” People with judgment know when they are out of their depth in making a decision and typically then seek the advice of someone who has the right background and knowledge.

It is, of course, possible to follow all these steps and still make the wrong choice. But Sir Andrew argues that a sensible process improves the chance of getting it right. The temptation is to look at people's track records when assessing when they have good judgment, but luck may have played a huge part. “While good judgment is important to success,” Sir Andrew cautions, “success is not a signal that there has been good judgment.”

The degree of judgment required tends to increase as people take on more responsibility. Those with routine tasks generally have limited scope for judgment. Line supervisors have some discretion. For a chief executive, the proportion of decisions involving judgment is high. Deciding not to take action is also a judgment with potentially serious consequences (for example, “I won't get vaccinated” or “I won't pay my bills”). The world is full of people whose lack of judgment brought their careers or personal life crashing down. Many made the common mistake of assuming everything was fine.

Some people think that good judgment is innate. Sir Andrew accepts that some individuals are born with the ability to listen, be self-aware and better understand other people: all qualities that make good judgment easier. People with good judgment tend to have a breadth of experiences and relationships that enables them to recognise parallels or analogies that others miss. The ability to be detached, both intellectually and emotionally, is also a vital component.

Others may have the wrong sort of characteristics; a tendency to ignore others, stick to rules irrespective of context, rush into action without reflection and struggle to make up their minds. Many leaders make bad judgments because they unconsciously filter the information they receive or are not sufficiently critical of what they hear or read. The danger is that people ignore insights that they don't want to hear, a tendency that can increase with age.

As artificial intelligence gets used for more and more routine tasks in the service sector, exercising judgment may be one area where humans retain an edge over machines. This is far from certain, however. What people perceive as good judgment may stem from the ability to spot certain cues in the environment. This ability may be unconscious, just as a dog can catch a Frisbee in mid-air without knowing how to calculate wind speed and air resistance.

With enough practice, machines may be able to recognise these implicit cues and thus display the equivalent of good judgment. But then, perhaps humans can be taught, too. In the long run one of the trickiest aspects of human judgment may be knowing precisely when to let machines take decisions and when to leave it to people.

This article appeared in the Business section of the print edition under the headline "A question of judgment"