Judgment Call

By Warren Bennis  |  Posted 04-07-2007

Judgment Call

Warren Bennis has studied leadership as much as any person on this planet. The 82-year-old distinguished professor of business administration and founding chairman of the Leadership Institute at the University of Southern California has led organizations and been writing, teaching and consulting about leadership for more than a half century. (He is also a former CIO Insight columnist.)

Still, the author of the forthcoming book, Judgment: How Winning Leaders Make Great Calls (Portfolio, November 2007), written with University of Michigan management professor Noel Tichy, says that while scholars haven't ignored the topic of judgment, it hasn't been addressed often enough. Bennis says his latest book "is certainly not the last word on judgment. I can tell you that without any false modesty; I feel I'm just beginning to understand judgment myself."

Bennis notes that we make thousands of judgment calls throughout our lives, from the frivolous to the momentous. Making sound judgments can determine our success in life. But for leaders, he says, the impact of making right or wrong judgment calls is amplified, because their decisions have a direct bearing on the quality of life of so many individuals--as well as on the organizations they lead. CIOs have a special responsibility, he told CIO Insight executive editors Allan Alter and Eric Chabrow, not only because they must execute good judgment, but also because they provide other leaders with the information they need. An edited version of his remarks follows.

 

CIO INSIGHT: Why are you and Noel Tichy writing about judgment now?

Bennis: The topic has been an afterthought in all the tons of stuff written and researched about leadership. Yet judgment is the DNA, the fundamental essence of leadership. This is basically how we judge our leaders. When you look at the history of leadership, it's usually a chronicle of the stupid or terrific decisions made by leaders. While [British Prime Minster Winston] Churchill, who was thought to be a mischievous rogue up to the point of May 1940, did not win World War II, he certainly saved the free world from defeat. Former Boston Red Sox manager Grady Little is remembered most of all for keeping pitcher Pedro Martinez in a critical game with the Yankees after most people would have removed him. Martinez was known to lose his stuff after 105 pitches. I hate comparing such monumental things as World War II with the Boston Red Sox manager, but the connection is there: judgment.

The second reason has to do with the emerging field of what's called judgment and decision-making. This field is drawing from utility theory in economics, the neuroscience of emotion, cognitive psychology, social psychology and even, to a certain extent, anthropology. There's a great deal of work being done right now using brain mapping and trying to understand how people make choices. So there's an incredible amount of exciting research going on in all these areas, which is making it much clearer what judgment and decision-making are all about.

When you think back over the last several years on the kinds of judgment calls that are being made by world leaders, especially in our own country, it raises a host of questions about judgment calls being made with consequential life-and-death decisions. The furor surrounding the invasion of Iraq and what we should now do, and how much executive judgment is being questioned daily, is partially why we decided we had to write this book now. The spate of books that have come out about the Bush Administration, such as Bob Woodward's State of Denial and Joseph Wilson's The Politics of Truth: A Diplomat's Memoir, all, in one way or another, deal with the issue of judgment.

Judgment is like the abominable snowman in the field of leadership: Its footprints are everywhere. But there's no central book that really deals with demystifying judgment as the essential element of leadership, and provides some ground rules for leaders to be aware of and reduce the probability of making bad judgment calls.

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Judgement Demystified

Judgement Demystified

Judgment is a vast subject. How do you and Noel Tichy demystify it?

The first thing we ask is: What are the domains where critical judgments are apt to be made? There are three: judgments about people, strategy judgments, and judgments made during crises. That doesn't include everything, but gets close to including the key factors. People choices are critical. For example, of the executive heirs to Jack Welch, Jim McNerney seems to be doing very well at Boeing and Jeff Immelt seems to be doing fairly well at GE. Then we have Bob Nardelli who came out of the same background, yet was ousted this year from Home Depot. Raymond Gilmartin was chosen to succeed Roy Vagelos at Merck, but as far as we could all tell, he was kicked out. And what about Carly Fiorina at Hewlett-Packard? How come those choices were made? The cost of these critical people mistakes in finding a CEO and replacing them is of a magnitude that I can't fully imagine.

Let's take strategy choices. When the Japanese were gaining ground in 1984, Andy Grove was No. 2 to Intel chairman Gordon Moore. Grove knocked on Moore's door and said, "If we got kicked out and the board brought in a new CEO, what do you think he would do?" And Moore responded, "He'd probably get us out of memories." Grove said, "Well, why shouldn't you and I walk out the door and come back and do it ourselves?" Now, imagine the strategic shift that took place at Intel.

And third, crisis judgments. We always think back to Jim Burke, when he was head of Johnson & Johnson and immediately removed Tylenol from the shelves [after the painkiller was laced with cyanide, resulting in seven deaths]. Compare that with the Exxon Valdez [oil spill] crisis where the captain and Exxon's executive team didn't react at all, or compare it to the Coca-Cola crisis in Belgium several years ago [in which the soft drink was blamed for the illness of more than 100 children], where the CEO and chairman acted pigheaded and tone-deaf, and delayed far too long.

But how do leaders with good judgment determine what to do when faced with choices or crises?

We've outlined a leadership judgment process. It goes from preparation to making the call--the execution phrase--and then learning from what you did.

The preparation phase includes a sensing and identifying of what has to be done. All those inflection points out there that Clay Christensen writes about, how do you know what the right ones are? How do you know what the significant ones are? Do we have a chief relevance officer? There's a marvelous German word, fingerspitzengefühl. Finger means finger; spitzen means touch; gefühl means feeling. Many good leaders have this sense of touch. I'm not talking about "blink," the blinding, epiphanic insight that Malcolm Gladwell writes about. No, most sensing and identifying comes from long experience in going through situations that resemble the one you're now going through. That's part one of the preparation phase.

The second part is framing and naming what it is you're actually going to do. And the third is making sure you align and mobilize the troops before issuing the order to advance. I'll give you an example from Hollywood. I was interviewing director Bob Zemeckis about why he loved making Forrest Gump, and why it was so successful critically as well at the box office. He looked at me rather blankly and replied, "We were all making the same movie." I asked him what he meant. He said, "Well, the actors, the cinematographers, assistant directors, the writers, the gaffers, the dolly grips, the best man--all of us were working together to make that movie."

So many decisions fail because people are not making the same movie. They're doing different things that are not coordinated or aligned. Dirk Jager did a very good job throughout his Procter & Gamble career until he became CEO and chairman. He served for only about a year and a half before being ousted. It was very clear that while his ideas were in many ways terrific, he never engaged the troops and got them aligned, whereas his successor, A. G. Lafley, seemed to have fingerspitzengefühl.

On Knowledge

On Knowledge

You mention learning. What kind of knowledge is required for good judgment?

The homology for this is how the human organism works--making sure we get the right amount of oxygenated blood to the various chambers of the heard at the right time, in the right rhythm, and in the right places. There are four areas of knowledge that are critical to making good versus bad decisions: self-knowledge, social-network knowledge, organizational knowledge, and stakeholder knowledge.

Self-knowledge has to do with self-awareness, learning about your own biases, your own leanings, ambitions, limitations and strengths. And you don't just get that through psychoanalysis. You must get it through various sources and direct reports.

An example we use in the book is George W. Bush, after he returned from his first trip to the Middle East before the March 2003 invasion of Iraq. Bush met with Brit Hume on Fox News, who said he was surprised that the president seemed taken aback by the amount of Arab hostility to the U.S. "Where do you get your news from?" Hume asked the president. And Bush responded, "Well, I get my information from objective sources." Hume asked, who are they? Bush, with a straight face and without a trace of irony, said "from my direct reports." Compare that to the way other national leaders or CEOs get their information. Think of President Franklin Roosevelt: He drove his direct staff nuts because of the information he was getting from all sorts of back-corridor sources, even from talks with [CIA precursor] Office of Strategic Services people.

Second is social-network knowledge, the ability to recognize and assess the information that flows all around; in other words, keeping your ears to the ground. Why did [former New York Times executive editor] Hal Raines have to read a New Yorker piece by Ken Auletta, just before he was ousted, that showed everybody all his weak spots? And yet he seemed to be totally blind. How is it that Larry Summers, who was ousted as president from Harvard, who's smart as they come, was so tone-deaf and didn't listen? Social-network knowledge and self-knowledge are highly correlated, because who can know everything that's going on?

The third kind is knowledge of the organization itself. In a memo, Starbucks founder Howard Schultz said, in effect, "we have grown to 13,000 stores but have lost our soul." Where did he get this knowledge--with these 13,000 stores in the damnedest places--on what's going on in the organization? Howard Schultz should be proud of the way he has a feeling for what he thinks is going on. But he's also, in effect, scolding his direct reports for not keeping better tabs on what's happening in the company.

Is there such a thing as too much information? Can too much unfiltered information cloud judgment?

Yes, we can be confused. You can be flooded with options and become totally mystified. Blogging, along with all the other opportunities for getting information these days on the Internet, may make judgments harder to make. But the good news about all this information we can now access is that it's going to create more transparent organizations. I just don't think companies can keep information private, the way they used to.

IT tends to capture "hard data" such as transaction data, financial data and data about customers and processes.

All of those are useful.

But information systems and CIOs don't typically capture the kinds of knowledge you describe. Is this being overlooked by IT, and should IT help?

I think that's definitely true. Think about the forces that major companies have to deal with when making a major strategic decision or people decision. We have countless numbers of interdependencies. How can you make a good judgment if you can't read the environment? It has everything to do with the information going to the leaders.

IT is a very critical player in helping the different parts and people in an organization work together in as high a degree of connectivity as possible. It seems to me, like in the little poem, that we're all angels with only one wing; we can fly only while we embrace each other. Well, who does the embracing? Who does the interconnecting? This underscores the importance of the CIO and IT people. They have to be the absolute closest partners to the very top leadership team.

I was teasing earlier when I asked if there is such a thing as a chief relevance officer. Well frankly, I think that's what CIOs are. The main job of CIOs, it seems to me, is to provide knowledge in all four areas of knowledge. What information--if missed--could become a disaster? As Harold Hill said famously in the musical The Music Man, you got to know the territory.