Judgment: How Winning Leaders Make Great Calls

“The ultimate test of management is business performance. Achievement, rather than knowledge, remains, of necessity, both proof and aim.”

And in the mid-1990s he redefined GE from a company that sold products to be a company that delivered services. It still manufactured many kinds of equipment and electrical machinery, but Welch’s new business model was, for example, to provide a hospital with an efficient radiology department, rather than just a good CAT scan or MRI.

People calls are often viewed as win-lose decisions for various players in the organization, and as such they unleash the most powerful of political forces in an organization.

Even as we enter the complex territory of judgment, full of curiosity but without a reliable map, we are reminded that our most glittering insights could be negated in an instant.

The single most important thing that leaders do is make good judgment calls. In the face of ambiguity, uncertainty, and conflicting demands, often under great time pressure, leaders must make decisions and take effective actions to assure the survival and success of their organizations.

In the late 1990s, a group of midlevel students at GE’s Crotonville leadership institute challenged him, saying that the “#1, #2, fix, close, or sell” strategy was hurting the company because executives were gaming the system.

He can be faulted for not originally sensing and identifying the need for dealing with the crisis earlier, because there were those inside the company and outside who saw some of the signals.

1. First of all, judgment is the core, the nucleus, of leadership. With good judgment, little else matters. Without it, nothing else matters.

Pre: What happens before the leader makes the decision The Call: What the leader does as he or she makes the decision that helps it turn out to be the right one Execution: What the leader must oversee to make sure the call produces the desired results