The secrets of better judgement

Good judgement is one of the most valuable qualities in management in general and leadership in particular. But how do you know if yours is up to scratch? And what can you do to improve it? Sir Andrew Likierman, former Dean of LBS, has been examining how to answer these questions. In his new book Judgement at Work: Making better Choices, he distils the results of his work on how you can improve your own judgement and recognise it in others.

How do we make the most of our judgement?

Understanding how to make the most of your own judgement – both in a work context as well as in private life – is a subject that has interested Sir Andrew from an early age. He recalls that his grandfather moved countries twice to avoid persecution, the second time to England aged 60, even though did not speak the language. “His qualities, including his judgement in anticipating problems, always impressed me”.

But the spur to his current work stems from his earlier research on performance measurement, particularly the challenge of assessing things that are difficult to measure. “Judgement is really significant in making choices,” he commented.

So how do you know if someone has good judgement? “Bad judgement is obvious when things go wrong but identifying good judgement has always been seen as more elusive. I’ve worked in many different environments and seen first-hand how critical good judgement is in each of them.”

These environments are indeed diverse. His career spans commercial, public and academic sectors, including working in Australia, Germany, the UK and the US. He has been Head of the UK Government Financial Service, Director of the Bank of England and Chairman of the UK National Audit Office and was knighted in 2001 for his services to the public sector. It is this background of diverse experience, together with more than 800 interviews and a search across many different literatures, that has provided the foundation for the book.

"There’s a vast body of work on decision-making, but very little that focuses specifically on judgement. There’s not even clarity about how to define it,” said Sir Andrew.

This realisation set him on a voyage of discovery. What he found from his search of literature and interviews was that one of the reasons judgement isn’t studied is because it’s so difficult to research. If each judgement is context-specific it’s difficult to apply statistical techniques. “Also, it’s a subject that crosses many disciplinary boundaries, making it challenging to publish in academic journals.”

The six elements of judgement

So what exactly is judgement? Sir Andrew defines it as “the combination of personal qualities with relevant knowledge and experience, either to make decisions or to form opinions.” It’s not just about decisions, he adds: “We make judgements when we form opinions too.” 

The framework to enable judgement to be used as a process is set out in the book. He described the six elements below.

1. Knowledge and Experience: This is the foundation of judgement. It’s important to understand how much you know about an issue on which you have to make a judgement and how much relevant experience you have. The less your knowledge and experience, the greater the risk to the quality of your judgement. Assuming you have the time and resources, you will need to find ways of find ways to fill or compensate for any gaps, depending on how much risk you are prepared to take.
2. Awareness: This is about understanding what is going on when you make a judgement, whether it’s the dynamics of the group making a choice, how information is presented or what’s being left unsaid. Your awareness influences how you process and then use understanding of what’s going on.
3. Trust: Whether it’s information from colleagues, media, or data sources, knowing who and what to trust is crucial. In today’s world, where misinformation is rampant, this element of judgement is more important than ever.
4. Feelings and Beliefs: We all bring these, including our values, biases and emotions, to the table when we make a judgement. There’s (rightly) a lot of concern about biases. The reality is that it’s difficult to avoid them influencing you, but at least you need to be aware of them in yourself and others.
5. Choice: How you reach your conclusions when you make a choice will affect the quality of your judgement. For example, are you considering all available options, or are you limiting yourself to what’s immediately presented?
6. Delivery: It’s not enough to have a brilliant idea. To count as good judgement the idea must be feasible.

Sir Andrew particularly emphasises the dangers of overconfidence in judgement. “Being optimistic is one thing and generally people know if they have a tendency to be overoptimistic. You might even need someone in your team who you trust who brings a more cautious perspective. But overconfidence is quite another matter. It’s particularly dangerous because it means people overestimate what they know, don’t take in what’s going on around them, don’t bother to consult, take bigger risks than they should and so make poor choices.”

Fostering good judgement in organisations

So how can organisations cultivate a culture that values good judgement? Sir Andrew suggests integrating judgement into hiring, appraisal and promotion. “When hiring, assess a candidate’s judgement as well as their other qualities. After all, you are going to have to work with them and having someone in your team who has no judgement is, frankly, a nightmare. During annual appraisal, provide feedback on elements of the judgement framework where they can improve, for example gaining more experience in a new area or understanding the dynamics when choices are made in a team or group.”

He also highlights the importance of diversity in decision-making. “You need people who can challenge accepted ideas and can provide diverse perspectives to stop getting stuck in a particular way of thinking. Bad judgement can also mean a missed opportunity because nobody thought about including a crucial option.”

The human element in the age of AI

In an era where artificial intelligence is increasingly used to aid decision-making, Sir Andrew argues that human judgement remains indispensable. “AI can do many wonderful things and perform many tasks far better than humans. But human beings are more than machines with brains which are collections of neurons. So there are limits to what a machine can do - you can’t outsource morality for example. And because judgements are context specific, it’s unrealistic to expect AI to be able to exercise judgement without being able to specify the outcome in particular circumstances.

He sees all this as meaning that, in an age of AI, judgement will be an increasing part of what human beings provide. “As AI takes over many tasks, judgement is one of the things that human beings have to offer, so the ability to exercise it becomes even more critical.”

How you can make better judgements

In conclusion, Sir Andrew advises: “Treat judgement as a process, whether you’re making a decision or forming an opinion, particularly when the stakes and/or the risks are high.”

His new book will serve as a guide to the importance of identifying and improving judgement, and not just at work. He suggests it also applies to some big choices in our private lives, such as health and finances.

“Approaching judgements with a sense of structure will not only stack the cards in your favour. It could also be a big relief for those who are concerned that they may not have done all they could in the way they approached a difficult choice,” he adds.

Sir Andrew’s book serves as a reminder, in a world where decisions are often rushed, of the importance of thoughtful, balanced judgement.

Sir Andrew Likierman  is Professor of Management Practice and a former Dean of London Business School.

If you’re interested in developing these skills further, Sir Andrew expands on this framework in his LBS Online masterclass, Mastering Decision-Making Through Better Judgement , which explores how leaders can apply structured judgement in real-world settings.