The Real Science of Making Judgements

What makes a good business leader? Intelligence and character are, of course, important, as is charisma.

But just as vital is good judgment. It is the essential quality that guides business leaders in knowing what they have to do to bring together and make cohesive organizations, which people to employ and which are the best opportunities to pursue.

The judgement of positioning the organization is making the choice of goods or services, or the market possibilities on which the business will focus. The most difficult one to achieve is the judgement of choosing the right markets or business models.

Sometimes there are signs that will indicate that an organization should reposition itself, such as the rise of new businesses, new customers or new competitors, as well as changes in customer patterns or the sudden emergence of new business or management models.

The real science is to judge when to reposition and when to ignore changes in a business’s operating environment. Business leaders who excel at this skill recognize trends and predict their effects. They can recognize when a change will be for a short time, how some changes may harm their organizations, and what opportunities the really good changes may offer.

Insightful business leaders need effective organizations, and business leaders who have not inherited effective organizations must build them by judging how to get people to work together.

No one person, though, can change an organization on their own, so you will need to judge how to develop a team of leaders who will ensure that the organization runs effectively and aligns itself with the corporate goals.

You will need to judge how every member of the team can master the basics of the business: its markets, market segmentation, customers, and buying behaviours; the nature of the competition; and what drives or inhibits the ability to be successful.

To direct teams effectively, business leaders must set appropriate goals and priorities for them to follow. They must seem totally achievable to the employees and be full of wisdom for your investors. But the goals are only words unless business leaders establish priorities to be able to meet them.

No matter how well a business leader directs an organization; outside forces can disrupt its course. Business leaders who fail to realize this will risk their organizations’ future.