How do you make better judgments?

12.1 A good judgment is more than a correct prediction

There was a project that looked reasonably promising at the time. The customer had a need, there was room in the market, and a contact kept moving it forward. Yet several key conditions remained unresolved: the budget was unsecured, the final decision-maker was absent, payment terms carried substantial risk, and the team was already close to its resource limit. The team ultimately decided against continuing to invest heavily. A few months later, another company took the project on and completed it successfully. At that point, the easiest verdict was, “See? You got it wrong.”

It sounds reasonable. The result is right there. But return to the moment of decision and the issue becomes less simple. Was the additional budget that appeared later already assured? Had the key decision-maker who later became involved already appeared? Could the improved payment terms have been reliably anticipated? If these conditions arose only afterward, what exactly does the project’s eventual success establish? Knowing the answer after the event can make us believe we should have known it beforehand.

A good outcome does not necessarily mean a good judgment

Chapter 11 examined how to see reality as clearly as possible. Chapter 12 begins a different task: after looking, how do we form a better judgment? Before learning more techniques, separate two things we often confuse. One is outcome quality: whether the undertaking succeeded, made money, continued the relationship, or delivered the result we wanted. The other is judgment quality: how we interpreted evidence and formed a current answer with the information and uncertainty available at the time.