The Role of Good Judgment in Decision Making

Decision-making and Valuation

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Gandhi Heryanto
Management Consultant, Indonesia

The Role of Good Judgment in Decision Making

We are often in a situation where there are no right or wrong answers when we must make a decision. In such situations we need "good judgment". Good judgment is the ability to combine personal qualities with relevant knowledge and experience to form opinions and make decisions.
According to Likierman S.A., The Elements of Good Judgment, Harvard Business Review, January February 2020, there are six basic components of good judgment, namely learning, trust, experience, detachment, options, and delivery:
  1. LEARNING: Listen Attentively, Read Critically
    Good judgment requires that you turn knowledge into understanding. Many leaders rush to bad judgment because they unconsciously filter the information they receive or are not critical enough about what they hear or read.
  2. TRUST: Seek Diversity, Not Validation
    Leaders can utilize the skills and experience of others as well as their own experiences when they approach a decision.
  3. EXPERIENCE: Make it Relevant but Not Narrow
    Beyond the data and evidence related to a decision, leaders bring their experience to bear when making an assessment decision.
  4. DETACHMENT: Identify, and then Challenge, Biases
    When you process information and utilize the diversity of your own and others' knowledge, it is very important for you to understand and overcome your own biases.
  5. OPTIONS: Question the Solution Set Offered
    In making decisions, a leader is often expected to choose between at least two options, formulated and presented by their defenders.
  6. DELIVERY: Factor in the Feasibility of Execution
    You can make all the right strategic choices but still lose if you don't make an assessment of how and by whom the choice will be executed.
Leaders need many qualities, but underlying them all is good judgment. Be aware of the above components so you can improve your judgment when you're making decisions.

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Decision-making and Valuation



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