Judgement Revealed Through Decisions

A confident answer is not necessarily a quality answer.

It may still rest on an incomplete analysis, an untested assumption—or the wrong question.

Before approving a consequential decision, boards should move beyond asking:

“Is this the right answer?”

They should also ask:

What assumptions must be true for this decision to succeed?
What evidence supports those assumptions?
Which alternatives were considered?
What happens if the central premise proves wrong?
What information would cause us to reconsider?

The quality of the questions determines what receives scrutiny before the decision is made.

Judgment cannot be measured solely by whether the eventual outcome is favorable.

A good outcome can follow a poorly reasoned decision. An adverse outcome can follow a disciplined decision made with the best information available.

The better measure is the integrity of the decision-making process.

Did directors test management’s assumptions?
Did they consider competing perspectives?
Did they examine the consequences of being wrong?
Were they prepared to act once the evidence supported a conclusion?

Questions shape the decision.

Decisions reveal judgment.

Question for Directors:

Does your board evaluate decisions by the confidence of the answers—or by the quality of the questions, evidence, and reasoning used to reach them?