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The Importance of Judgment

Updated: 6 days ago



In this previous post, I described the Business Growth Stack.  You’ll notice that Management appears twice.

The dual-role that Management has – in the Growth and Operating layers – has created a lot of confusion for people who have a strong operating system but continue to struggle with growth issues.  Let’s look at how that confusion is created.

The playbook for the Operating layer of the stack says, “You need 3 priorities.”  And the management part of that layer says, “OK, they’re A, B, and C.”   For some companies, determining those priorities is straight-forward, and A, B, and C are the right things to focus on. 

For other companies, though, they really aren’t sure that D, E, F, or G shouldn’t be the priorities.  And for those companies, a playbook that says, “Pick 3 priorities” without addressing the complexity of the question can actually be counter-productive. 

Why?  Because it leads companies to be over-confident in the 3 priorities they choose, and if the situation is complex, there is a high likelihood that the company will choose the wrong priorities if they don’t spend the time needed to understand that complexity.

On the other hand, the Growth System handles the question of priorities in a much better way if the answer isn’t clear.  First, it acknowledges that what’s most needed for the answer is judgment.  Once recognized, the focus can then be on finding and creating that judgment.  Big companies are looking to big data and algorithms to provide that judgment.  But small companies don’t have those resources – and, fortunately, don’t need them.

So, how do you find and create judgment in a small company?  There are 2 drivers:  (1) structuring conversations that can elicit observations, analysis, and insight, and (2) involving people in those conversations that have the perspective, experience, and skills to make those conversations robust.

So, the summary is:  solve as many strategic questions as you can in your Operating System – but also get good at recognizing when a strategic question is too complex for that system, and needs to be addressed in the growth layer.

Note:  Why do people hire me?  Because it turns out that I’m great at creating and directing robust conversations about complex topics, and because I have 25 years of business acumen that enables me to see things and know things that most small business leaders don’t.  In short, I have a lot of small business judgment, and I’m good at helping companies create judgment with the resources they have.