Assessing Judgment in High-Stakes People Decisions

For 14 years, I had a loving, sweet cat named Princess. She was my baby. (Even if you hate cats, stick with me on the story; there’s a lesson here.) One night I went on a date, and the subject of cats came up. I told my date about Princess, and he told me that his father gave him a dollar per head to shoot kittens when he was six years old. My date went on to say that it started getting hard by the fifth or sixth kitten. We didn’t have a second date. Why? It wasn’t just that he shot kittens. Even though the story was upsetting, I understood that he was a child. What did concern me was his judgment. Why would he tell a woman with a cat named Princess that he had shot baby kittens?

Some of the best advice I received about supervising others was from the director of my PhD program. “You know, Tricia,” she said, “I don’t worry much about one mistake because everyone makes mistakes. I worry if a mistake or a pattern of mistakes reflects a judgment problem. You can teach skills, but you can’t teach judgment.”

That sentence stuck in my head as I moved into increasingly complex scenarios, both in my own business decisions about whom to work with and in those of my clients.

Judgment patterns help you discern if someone can effectively manage your business, organization, confidential information, or a high-stakes situation. Below are some of the common areas where problems in judgment may affect the outcomes of your personal or business relationships.

Did you ever work with someone who seemed blind to the consequences of decisions or acted impulsively without thinking through potential outcomes? One of the primary reasons I’ve turned down business opportunities, both in building my own model and in choosing whom to serve, has been that I saw red flags in executive-functioning judgment. When people aren’t aware of and unable to predict the downstream impact of their decisions, they increase risk for those around them, regardless of their intentions.

Executive functioning occurs in the very front part of the brain, called the prefrontal cortex. It helps us problem-solve, strategize, and plan elaborate sequences of antecedent-consequence (“if-then”) scenarios. People with poor executive functioning are often viewed as stupid or lacking common sense. Either they don’t do something critical to success, or they take an action that guarantees failure. The fallacies in their decision-making process are apparent to the objective observer.

The prefrontal cortex also contains the “braking” mechanisms that help us with impulse control. When we have impulse control, we can pause before reacting. We may be angry, but we recognize the need to keep our anger in check. We may want something immediately, but we decide our action based on the longer-term ramifications.

What I’ve found is that people often excuse these errors by assessing character and situational factors: “He was having a bad day.” or “He’s a good guy; he just needs to think before he acts.” The problem with this approach is that errors in executive-functioning judgment happen at a neurological level.

Indicators of executive dysfunction include: complex tasks that require integrating many details will overwhelm the person, creating a freeze response that appears to be procrastination. Alternatively, you notice that this person doesn’t “think ahead.” In decision-making, the person attends only to the variables immediately at hand and does not account for the factors that may arise four steps out. And this person is unable to assess multiple facets of the same problem. 

Two areas of daily functioning that may be affected by executive dysfunction are risk judgment and planning judgment.

Risk Judgment. Someone takes actions that will inevitably create problems but is blind to the adverse outcomes. The person does not see the downsides of a decision until you explain them. If you ask them to assess the potential consequences of actions, they may focus on a minor negative outcome and miss a critical factor. When you’re assessing risk judgment, ask yourself: Do the person’s actions create chaos? Is this person able to assess risk and then devise a plan to mitigate it? Could you trust this person to thoroughly examine the factors of an important decision and create an appropriate plan of action? It doesn’t need to be the way you would do it, but it needs to appear logical and derived from all of the variables at hand.

Planning Judgment. People with executive dysfunction flounder with prioritizing tasks and time management. Everyone grapples with these items, but a deficit in executive functioning impairs daily functioning and the completion of rudimentary tasks. You’ll often notice difficulty and confusion surrounding the person’s ability to keep appointments and remember meetings. When assessing planning judgment, consider: Is this person able to figure out the best use of time? Does this person allocate time according to priorities, or do they allow “mood” to dictate time usage? Can this person think ahead to future tasks and backtrack the sequence into a daily plan? In work settings with colleagues, difficulty in planning creates friction and decreases efficiency. In a business partnership, the consequences are more far-reaching as frustration erodes relationships and a lack of foresight increases risk.

Social judgment combines emotional intelligence and healthy personal functioning. A person with excellent social judgment knows how to interact effectively and has the personal capacity to implement that knowledge. Social judgment is critical to navigating sensitive or political situations, such that you want to account for this variable if you are placing leaders in high-visibility or high-stakes contexts. Your organization will be extra vulnerable to litigation if you have a leader with poor discernment. “I didn’t mean anything by it” doesn’t seem to dispel lawsuits. On the personal side, your life will simply be happier if you surround yourself with people who have appropriate social judgment. No matter how well intentioned, people with poor social judgment tend to add stress to relationships.

• Can I trust this person to hold information confidential? (If the person shares other people’s secrets, the answer is no. You are not unique.)
• Can I trust this person to know what information is appropriate to share or not share in various contexts? (If you cringe because the person makes inappropriate jokes in the wrong setting, the answer is no.)
• Can I trust this person to think before speaking, or is there a tendency to say whatever comes to mind?
• Will this person be able to navigate other personality styles with diplomacy?
• Does this person have appropriate boundaries?
• Is this person aware of how others perceive their behavior?

“He’s a bit of a loose cannon. That makes me nervous.” And it should. Whether we want to admit it or not, emotion drives outcomes. At the very least, negative emotion distracts us and causes bandwidth. In a higher-stakes scenario, a perceived insult can cost an opportunity or blow up a deal. I personally run, and I advise my clients to run, as soon as I see errors in emotional judgment. As a psychologist, I understand these emotional errors may be due to a mood disorder, a personality disorder, or a perfect storm of situational variables. As a business person, I understand that a lack of emotional judgment creates multiple layers of risk, all of which are impossible to predict in terms of scope or consequence. The inability to predict them makes me nervous.

 Here are a few questions to ask: 

Can you reasonably predict this person’s mood?

Is this person able to modulate emotion according to the context, people, and stakes involved? Or do you hold your breath and hope they’ll show up well?

Does this person own their emotions, or do they displace them onto everyone else?

And critically, is this person able to separate emotions from decision-making?

Everyone gets emotional, but it is good to recognize when our emotions are so high that they may cloud our decision-making. Someone with good judgment will realize the vulnerability and allow emotions to cool first.

Problems with financial judgment have ended personal and professional relationships. It has peaked around the corners to show itself in the less significant impact of reduced profitability and exploded into a roar when it surfaces as fraud. Financial decisions arise from a complex intersection of personal history, financial values, emotions, risk tolerance, executive functioning, and social pressures. It is far better to assess a person’s financial judgment before entering into a relationship than to try to resolve incompatibility later.

Personal finances will impact business. Business partners may “borrow” from the company to cover personal misspending. Employees may push for an unwarranted raise to offset personal financial concerns. Owners may make risky business decisions out of desperation in their personal finances. What may look like nonconsequential coping on the front end may pierce the corporate veil and create later litigation risk at an expense that far outweighs the initial concern. 

When assessing the financial judgment of a personal business partner, consider whether this person can prioritize spending according to longer-term goals, and whether their behavior corresponds with those prioritizations. Does this person spend money on unnecessary items for the business? Is this person able to make decisions based on numbers instead of emotion? Their personal story will become your liability.

Assessing judgment helps us know what we can expect from someone’s future actions and make decisions accordingly. You can teach skills. You can develop a strategy. You can’t teach judgment.

Dr. Tricia Groff is an executive coach, psychologist, confidante, strategic partner, and author of Relational Genius. She works with high-achieving executives on intersecting systems of personal, business, and emerging change. drtriciagroff.com