To Avoid Colossal Losses, Hone the Art of Judgement
Errors of Judgement
Can Cause Horrors
Crash of Life, Careers, Marriages, Families, Friendships, Businesses, Projects, Cars, Planes,
Missiles, Spaceships
“Judgement!”
exclaimed the cricket commentator, when a fielder stopped the ball just short
of the boundary, secured a direct hit and bagged a wicket for his side. In that
one word tinged with high excitement, the commentator summarised the skills of judgement
like learning,
motivation, understanding, concentration, commitment, attention, experience, choosing
options, etc. The acid test of judgement, as this anecdote shows, is in the
result.
A keen sense of judgement is the master key to success in all
fields. Dr. Noel Trichy’s statement makes clear the
singular make-or-break nature of this virtue:
With
good judgement, little else matters.
Without
it, nothing else matters.
When masters of judgement gain mastery, they become champions, demonstrate
sustained high-level performance that turns them into legends, and some, even
historical heroes.
Even
the Giants are not Immune
However, as eminent authors Hammond ,
Keeney, and Raiffa declared in their authoritative treatise, “even the best
and most experienced managers are not immune to errors of judgement”(emphasis
added).
There are many cases of eminent
personalities suddenly crashing out due to serious errors of judgement, often
not directly connected to their own professional pursuits. With due respect,
two legendary giants who had to quit senior positions in the companies they
founded come to mind, and the incidents are well-documented:
·
The
CEO of Uber had a heated exchange with one of his drivers. The video of the
incident went viral, and Travis Kalanick admitted the mistake and openly
declared: “This is the first time I have been willing to admit that I need
leadership help……” and added a profound apology. Later, he quit as chairman of
the company he founded. It is implied that the leadership help meant
essentially improvement in judgement skills.
· Steve
Jobs, a towering and monumental
visionary, a publication claims, was surprisingly fired from Apple, the company
he founded. Once again, the reason was not a lack of business skills, but according
to press reports, it was “abrasive and authoritative approach with people”, which can be interpreted as a lack of ‘judgement‘ skills. He recreated himself
into a great, charming leader, returned to Apple and took it to dizzying heights.
Horrors
Due to Errors of Judgement
“Oh hell!” might have been the exclamation of those who
witnessed a ghastly road accident in which at least 24 vehicles were
damaged as the accident led to a 48-vehicle pile-up on the highway. According
to a newspaper report, the likely reason was an error of judgement.
According to the National Transportation Safety
Board (NTSB), every year, the lives of
approximately 1.3 million people are cut short
as a result of road accidents. Between 20 and 50 million more people suffer
non-fatal injuries, with many incurring a disability as a result of their
injury.
Also, there are several plane crashes, including
mid-air and runway collisions, resulting in a large number of people being dead or injured.
Surely, the drivers of road vehicles and pilots of planes are
well-trained and experienced. It would appear then that one of the possible reasons
for the ghastly accidents is error of judgement, and several news reports allude
to it, besides technical faults, in some cases.
Losses in the
Financial World
The
subprime credit crisis of 2008 (the first Depression after the ‘30s) created
havoc, first in the U.S. and, later, the world over. The losses were in
astronomical figures. Retail investors also suffered. The failure of several
banks and the downgrading of AAA-rated bonds to junk status led to a loss of
credibility of financial wizards in banks, regulators and rating agencies. All
of them were highly educated and experienced. It appears they all suffered from
a collective error of judgment.
It
was expected that the elite brains of that time and successive generations would
learn from the errors of judgement and would reform thinking to ensure NO,
NEVER AGAIN! And yet, we saw a repeat of it in 2023 with the failure of three
regional banks in the U.S., as well as Credit Suisse.
A report in a U.S. newspaper says that “this
story has more to do with crypto, a huge error in judgement (emphasis added) by veteran bankers,” quoting Christopher
Whalen of Whalen Global Advisors, which specialises in analysing and consulting
on financial institutions. The result was the same with a run on deposits.
__________________________________________
|
“To err is human, but when the eraser wears out ahead of the pencil, you're
overdoing it.” - Josh
Jenkins |
_________________________________________
The Reasons and Remedies for
the
‘Errors of Judgement’ Malady
|
_______________________________________________________ Inattentiveness
is not Inherently a Genuine Error Inattentiveness is not inherently an error. It's a symptom characterised by difficulty
in focusing, staying on task, and organising activities. It can stem from a
lack of focus or concentration at a given moment. Here is an expensive
example: The
loss of the Mars Climate Orbiter in 1999 is a classic example of a metric
error leading to a spacecraft crash. The problem arose because one
team used metric units (SI) while another used English units (imperial) for
crucial calculations. This mismatch caused the spacecraft to enter
Mars' atmosphere at an incorrect altitude, and it was
destroyed, resulting in the loss of US$125 million. |
One conclusion with which most experts agree is summarised in a 1998 (HBR) article: ‘The Hidden Traps in Decision Making’. It states that “sometimes the fault lies not in the decision-making process but rather in the mind of the decision maker. The way the human brain works can sabotage our decisions”. That is summed up in the term ‘heuristics’, which is defined as “mental shortcuts for quickly solving problems”. Another possible reason is our biases, like anchoring, overconfidence, hindsight, confirmation, etc. Some (unconfirmed) sources also attribute ‘overload’ as a possible reason. They claim that “an average person makes an eye-popping 35,000 choices (judgements) per day”. Well, even if the load is 10% of that, it can lead to errors of judgment.
Incidentally, John C Maxwell says, “Life is a matter of
choices and every choice you make makes you.” So, be cautious and very careful
in making your choices, particularly when deciding on academic courses, jobs,
spouses, friends, and confidants. These decisions should be made after conscious
thought, seeking advice and sharing learnings from others’ experiences.
A very laconic and simple advice is to be composed and
patient, and ‘respond - do not react’. Or, as per grandma’s wisdom, “count to ten
before you act”. The great poet Sahir Ludhianvi’s song in the film ‘Kajal’ has
wise lyrics – “Tora man darpan kahalaye; bhale bure sare karmo ko dekhe aur
dikhaye …… man se bada na koy” which translates as: “Your mind is a mirror
that reflects both good and bad. It watches the flow and reveals all…… nothing
is greater than it”. So watch your mind, i.e. always be mindful and act
mindfully.
It appears simple, but most find it to be the toughest
task. The great mindfulness guru, Thich Nhat Hanh, was having dinner with a CEO
who had completed the former’s course on mindfulness. The guru asked the disciple
if he had grasped the essence of the
art. The CEO nodded in affirmation. The guru said, “I don’t think so”. The
disciple was dumbstruck and asked why. The guru said that even as you are
chewing the morsel in your mouth, you are holding the fork and knife mid-air. Let
them rest on the plate until you are ready for the next bite.” The disciple was
stunned and admitted that he had gone to the course because he was under
tremendous pressure and had not really been attentive during the sessions.
The moral of the story is that one should ensure that
s/he is not indulging in ‘self-deception’. There is a very authentic book on this subject by the
same title, reviewed on this website (can be found in the archives). Do read it.
And also cultivate the virtues listed below:
Judicious, Understanding, Dignified, Gracious, Empathetic, Mindful, Equanimous, Noble, Trusting
Wizards of the world!!
Spread the Message: Learn & Practise
Mindfulness.
It Is
Wise Olympian wonderful
[NOTE: Re-posting this blog, which was
published earlier, as the world has become even more chaotic and the need for
sound judgement is even greater today.]
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