Small business leaders often make difficult decisions that are filled with challenging trade-offs. Practicing good judgement is important when faced with hard choices, yet leaders often second guess themselves and wonder if they are truly making the best decisions for the good of the business. Thankfully, good judgement skills are learned, and your judgment is likely to improve with time and a bit of intentional effort.

Good Judgement Definition

Good judgment comes from making decisions based on careful thought and sound and complete information. When you exercise good judgement in your decisions as a business leader, you are using past information to inform sound choices for the future. Good judgement examples could involve things like:

  • Hiring at the right time
  • Practicing patience when the time is not right
  • Mentoring a struggling employee
  • Letting go of an uninterested employee
  • Providing a raise to your lowest-paid department employees

Many good judgement calls are necessary in areas that do not have solid right or wrong answers. It's in the gray areas where decision-making skills and judgement skills come in to save the day. Develop yours so that you are likely to make wise decisions the next time you are faced with a complex leadership situation.

1. Understand What Is Essential

Having good judgement as a leader means that you understand what is essential to your business and what is nonessential. This means being clear on your mission and vision so you know your top priority.

Avoid having a gazillion top priorities because that makes it hard to choose between them when they inevitably end up at odds. Instead, stick to one top priority on which you can go big without the noise and distraction of a million little things that divide your attention.

2. Embrace the Learning Curve

Understand that developing good judgement as a small business leader comes from experience. If you are new to business, expect to make some mistakes and go through some learning experiences along the way. This is necessary and will prepare you to make better judgement calls in the future. Becoming a leader with a growth mindset involves nurturing the following character traits in yourself and your team:

  • Teamwork
  • Curiosity
  • Perseverance
  • Optimism
  • Creativity
  • Grit
  • Determination
  • Compassion

3. Seek Wise Council 

Although developing good judgement skills involves learning from the past, you do not always have to make all the mistakes yourself. It is possible to gain perspective and wisdom by seeking wise council from other leaders who have been there and done that. Here are some possible places to seek wise council in exercising good judgement:

  • Meet with a mentor
  • Consult other leaders in your field
  • Attend conferences and seminars
  • Read industry-specific books 

4. Weigh the Pros and Cons

Good judgement comes from making wise choices with full information and a lot of thought. Learning to think clearly when faced with two seemingly good alternatives involves being intentional.

One way of doing this is by creating a list of pros and cons before you make your next big decision. Since trade-offs are inevitable in business, this tool will help you decide with which set of benefits and with which set of problems you would rather contend.

5. Be Aware of Time

Some judgement calls can be made slowly and methodically, while others need to be made quickly. If you have a time-sensitive choice before you, having good judgement won't matter if you miss the deadline by two days.

It can sometimes be good judgement to recognize that a decision needs to be made quickly in order to avoid financial loss. When fast decisions are required, remember your business's number one priority and only stick with ethical choices that support it.