How Managers Develop Judgment: Learning in Action

Have you ever noticed that some people seem to have been born with more common sense than others? Or that some people seem to be blessed with great judgment? Where do you suppose such good judgment comes from? Judgment, whether in business or in other pursuits, is a fascinating thing. In my career I've worked with hundreds of managers on all levels and the differences I have seen in judgment have been remarkable.

What is judgment, anyway? The best definition I've seen is this: "the capacity to assess situations or circumstances shrewdly and to draw sound conclusions." What we see as good judgment is the actions that people take after they draw sound conclusions.

Where does good judgment come from? Most would say that experience is necessary for good judgment; and that's true. But I would like to suggest that experience by itself is not enough. I think it's how you use your experience that makes it possible to develop good judgment.

How We Develop Judgment

We need three things to develop judgment: experience, reflection, and prediction. These three components work together so that we can learn from our experience and apply our learning to new experiences. Here's how.

We have an experience; let's say we make a mistake in handling an angry customer. If we do nothing, we're likely to commit the same mistake the next time we encounter another angry customer. Instead, we reflect on our experience with the angry customer and on how we responded. Based on our reflection, we predict how we might improve the next similar experience, perhaps by being a little more patient or by asking different questions to find out what went wrong. The learning is completed when we have a similar experience again and test the new idea.

Each time that we encounter a similar experience we change our response based on our prediction of how to improve it. Then we reflect again to see if the improvement happened. We continue to refine our approach a little more with each similar experience.

Over time we develop judgment the same way we learn anything else: by experience (either directly or from others) followed by reflection followed by an attempt to improve. This cycle repeats until we can handle similar experiences expertly without thinking.

An important question to ask at this point is how to speed up this process so that employees develop good judgment as quickly as possible. The very best answer I can offer is that it's possible through specialized training. This training is not only highly effective but it can actually more than pay for itself almost immediately.

Action Learning is Learning by Action

This pattern of experience, reflection, and prediction is the core of a training method called Action Learning that I learned to facilitate two years ago. The simple effectiveness of this method and its universal applicability means that it is ideal for training managers and others in such skills as judgment and risk assessment. It also works very well to help people learn problem solving and project management.

Action Learning is at its best and most effective when the focus is on actual problems or projects. I like to see Action Learning used to help managers and other skilled employees develop new skills or refine existing ones by attacking known problems facing their business. In fact, if it's done right Action Learning can become a sort of profit center. This happens when the Action Learning team is given responsibility for solving a problem or completing a project that will save or earn their company more than the cost of forming and training the team. This result is quite common.

Here is a quick example of the power of Action Learning. I used this method to help a company that sells chemicals for offshore oil production reduce the development time for new sales representatives from five years to thirty months. It's a very complex and demanding field, but by cutting in half the time between when a new representative is hired and when he or she is capable of winning a multi-million dollar contract, we saved the company several hundred thousand dollars. We also gave them the opportunity to seek more and larger contracts in the years ahead. The payback on the investment in Action Learning will no doubt be much more than 100 to 1 in the first three years alone.

So imagine, if you can, a large problem in your business. One that is costing you money or preventing you from realizing potential new revenue. Now imagine what it would be like to have this problem solved. And in the process, imagine that when the problem is solved, a few of your store managers or other employees have become better skilled at problem solving, project management, and business judgment.

That's exactly what Action Learning is all about.

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