Why your judgment is your superpower

And what you can do to hone it

Coming to you from: Librae Bakery, NoHo

Imagine you are at SFO, flying back home to New York. Instead of pointing the nose of your plane toward LaGuardia right after takeoff, your pilot turns the plane just 20 degrees (smaller than the angle between your fingers when you make a peace sign).

Six hours later, you have ended up in Miami.

A minute deviation in your flightpath has displaced you 1,100 miles from your apartment. Even if your pilot shaved 45 minutes off your flight time, you are worse off than if your pilot had gotten you to New York even two hours late.

Source: Google Maps

Of all things, why judgment?

Think about the number of times you have had to redo something due to haste (if you are having trouble recalling, think back to the last time you built IKEA furniture and relied on instinct instead of instructions). Decisions up front have effects that compound over time and, while a posteriori course-correction can mitigate imperfect decision-making, you will have to apply more force to achieve your original outcome.

Decisions aren’t made in vacuums. It also doesn’t help that our decisions are informed by very little information yet have amplified consequences. We’ll never really be free from this information asymmetry, so it’s clear that we have to adapt to a world that is rife with Volatility, Uncertainty, Complexity, and Ambiguity (VUCA).

"Decision-making is everything. If I manage $1 billion and I’m right 10 percent more often than somebody else, my decision-making creates $100 million worth of value on a judgment call."

- Naval Ravikant, Founder of AngelList

The VUCA framework has been used to help structure our approach to unpredictable conditions. Borrowed from the Army in the 90s, VUCA has now become prominent in building agile business leaders, but there are troves of applications that we already layer into our daily lives. For example, in your commute to work, the weather is Volatile (bring an umbrella) and transportation introduces Uncertainty (check Google Maps before leaving). But the framework’s value isn’t in telling us how the world is; it lies in showing us how we can improve our judgment by building awareness of the types of chaos we experience.

The value that we place on good decision-making is clear: CEOs are paid premiums for their judgment and pilots are given full autonomy in a flight for their unique skills (excluding the pilot that took you to Miami instead of New York). The good news is that our judgments are neither static nor intrinsic; we can practice the skill, just like any other.

Source: Harvard Business Review

How can I improve my judgment?

Here are three takeaways you can incorporate into your mindset as early as today:

1. Inversion - eliminate bad judgment: you don’t have to start each day with a good decision, you simply need to avoid a bad one. Instead of trying to figure out exactly how to be productive today, think about the actions that would actively make your day unproductive and avoid those. Charlie Munger, Warren Buffett’s righthand man at Berkshire Hathaway, had a reputation of using inversion and is famously quoted for saying “All I want to know is where I’m going to die, so I’ll never go there.” Some of the most venerable artists were staunch proponents of inversion because art can come from rejecting what already exists. Picasso, who was prodigious at realism, created Cubism on the belief that “art should not copy nature.”

2. Learn to see the world how it is, not how you want it to be: the difference between clear and clouded judgment is desire. If you want to optimize for positive outcomes, you have to act on true information, not preconceived notions. The harshest reality checks come from realizations of the truth - the unavoidable and objective facts you see when you put aside your biases for how things should be.

3. History looks backward - you should look forward: hindsight is 20/20 because it’s human nature to explain past events through narratives. There is an inherent reporting bias in how history is written because only the parts that fit a narrative make it into textbooks. How is it that we can perfectly explain each causal link of the buildup of WWII now, yet no living participants saw it coming? Nassim Taleb posits that these low-probability, high-impact events are called Black Swans and they are not predictable in the moment. Once you internalize that life is random and unpredictable, you can focus on planning for more outcomes and making the decisions you make today count. Use your intuition, not your memory, to think clearly and exhaustively.

Where does good judgment take me?

In results-driven ecosystems, you are measured on your outputs rather than your inputs. CEOs are measured based on the impact of their decisions, not the number of hours they spent making them. Your impact as an individual is magnified through the leverage you have. Your leverage is a culmination of your skills, capital, human capital, and brand. If you are a restauranteur who wants to start a fine-dining restaurant, your connections, employees, cooking/management skills, and social media reach can turn your “want” into a reality.

Your judgment helps you point the nose of the plane, and your leverage propels you to your destination. Hone your judgment and continue building leverage, and you will have the impact you want on this world.

Source: The Almanack Of Naval Ravikant