Judgment: How Winning Leaders Make Great Calls

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.

It’s instructive to look at crisis calls, not only because getting them right is so important, but also because they compress and highlight so many of the important elements of making judgment calls.

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.

The optics were not good, nor was her popularity in HP. To make matters worse, HP missed more than half of its earnings targets during her tenure.

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

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.

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.

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.

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.