Leadership Judgment and Planning

I recently read an article entitled Judgment: Making Great Calls. This article pointed out that what differentiates effective leaders from less effective ones is their ability to make better calls in key situations. They not only made better calls, but they were able to identify the vital decisions that needed to be made and made the right calls in those cases. It went on to say that there are three judgment domains in which effective leaders excel: People, Strategy and Crisis.

It occurs to me that the foundation for exercising good judgment in these domains is having a sound strategic plan for the business that is alive and actively guiding the business. The process of reviewing and deciding on the vision, values and mission of a business conditions the leadership to be ready to make the right decisions at the right time – even in times of crisis. Let’s consider the benefits of effective planning in each of these domains.

People
The need to involve key personnel in the strategic planning process promotes buy-in and alignment with the future direction of the organization, equity in the way decisions are made consistent with the plan, and promotes effective communication of the plan throughout the organization.

Strategy
The creation of the strategy involves the key leaders in evaluating the market and competitive forces which drive the business. Will there be surprises down the road that weren’t anticipated? You bet, but having a baseline plan allows the leadership team to quickly react to inevitable changes and be prepared to use better judgment in the decisions that need to be made as surprises (both good and bad) occur.

Crisis
During a crisis, leadership needs to be guided by the values that were decided upon by the team during the relative calm of the planning process. They need to be guided by the ultimate goals for the business contained within the plan. One of the best examples of this principle was the Tylenol tampering situation faced by Johnson and Johnson 25 years ago. The leadership team of J&J at the time was clearly guided by the longer term view of the company – their goals and values, when they made the decision to have a total recall of the Tylenol product and to very quickly redesign the packaging to better prevent tampering.

In a book entitled “Fail-Safe Leadership”, by Linda L. Martin and Dr. David G. Mutchler, the authors advocate 4 key leadership principles:

1. Leadership is more about the ability to set goals and achieve results than individual leadership qualities.
2. Developing leaders is about developing and following the processes that lead to achieving the outcomes desired.
3. Leadership development processes are needed that lead to consistent achievement of results, specifically the alignment and goal setting/goal achievement processes.
4. Core values of the company need to be established and regularly revisited as appropriate.

Many of the leadership development processes are captured in the strategic planning process. Development of leadership that makes the right calls in tough times is enabled by creation and implementation of a strategic plan, which includes the process of setting goals based upon analysis of the organization’s internal and external factors, the actions to implement the goals, and the key results measurements to guide implementation of the plan.

Therefore, if you want to develop sound leadership judgment for your organization or business, hire the right people who are guided by an effective strategic plan. Lastly, keeping the plan alive with periodic reviews which track progress relative to desired results is essential to reinforcing the appropriate fail-safe leadership practices. How fail-safe is your organization?