Good judgment is a key business skill

A young banker asked a retired banker what the secret of success in banking was, to which the older banker replied, “I’ve made a good guess.”

The novice then said, “How can you judge well?”

The older banker said, “Experience.”

To which the young man asked, “How do you gain experience?”

And the retired banker said, “Bad estimate.”

Anyone who has ever dealt with business can relate to this story.

As a business leader and parent, the one trait I value most is good judgment of a person. Judgment is the result of one’s decision making. When your values ​​are clear, decision making becomes much easier.

There is no substitute for good judgment. International Judgment Day is on January 17 every year.

“Faced with ambiguity, uncertainty and conflicting demands, often under great time pressure, leaders must make decisions and take effective actions to ensure the survival and success of their organizations,” said leadership expert Warren Bennis. “This is how leaders add value to their organizations. They lead them to success by using good judgment, making smart calls when particularly difficult and complicated decisions simply have to be made, and then making sure they are executed well.”

Various challenges that leaders and team members face every day: budgets, errors, delays, staffing, conflicts, security, profits. Everyone calls for making decisions that can affect the future of the organization.

What skills do you need to improve your judgment?

  • Ethics is based on knowing what is right and what is wrong. Is it fair and legal? When I talk about ethics in my speeches, I introduce the topic by saying, “Act as if your mother were watching you.”
  • Consistency is expected. You must not allow emotions or intense situations to affect your judgment.
  • Listen to learn. Listening to others allows you to gather and evaluate important information instead of relying on your own opinion or personal bias.
  • Accept your mistakes. Accept responsibility and move forward. It is important to learn from your mistakes, understand what went wrong and not repeat them.
  • Learn from experience. As the opening story says, nothing beats experience in improving your judgement. If something went wrong, do something different next time, and if everything went right, learn from your decisions.

In addition to these skills, John Spacey, writing on, emphasizes the need for pragmatism and situational awareness. Accepting “difficult real-world conditions such as uncertainty, gray areas, and imperfections” is necessary to make reasonable and reasonable decisions. Equally important is “the ability to be very alert and diligent to respond to rapidly changing situations,” he writes.

Here is another story to illustrate my point. A business owner nearing retirement invested her life savings in a business that was carefully explained to her by a con artist.

When her investment disappeared and her wonderful dream shattered, she went to the Better Business Bureau. They asked, “Why on earth didn’t you come to us first? Didn’t you know about 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’d tell me not to.”

It’s a sad story we’ve heard over and over again. Too bad her judgment didn’t lead her to ask the questions she might have asked about the proposed investment. Simple but necessary questions could have saved her a life of regret.

Mackay’s Moral: Judgment is knowing which door to open when opportunity knocks.

Harvey Mackay is a businessman from Minneapolis. Contact him at 612-378-6202 or by email at [email protected]

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