By David Creelman

You probably have learned a lot about calculating answers.  Business schools typically spend time on ROI, net present value and other things of that ilk. However, calculation only takes you so far; in more complex situations you need to make judgements. Chances are your professors never taught much about making judgements. That’s a terrible oversight.

Where Calculation Fails
It might be easier to enumerate the situations where calculation works to definitively determine the right decision, rather than the enormous diversity of situations where it fails. However, let’s start with a classic example of the limits of calculation from the great French economist Lucien Karpik.  In Valuing the Unique, Karpik discusses the challenge of choosing a bottle of wine. Each wine is unique. There are a host of characteristics that deny any hope of calculating the best choice.  Instead, one is left to use judgement devices such as popularity, the ratings in wine guides and advice from friends or experts.

Sometimes we create a kind of fake calculation by listing the important factors, rating each on some scale, weighing the factors by importance, then calculating the optimal choice. However, if you have done this then you know that if the result is not what you wanted, you go back and play with the formula until the calculated answer agrees with your gut choice. This is pretending the answer is calculated, not actually using calculation to make a decision.

In fact, notes Karpik, the struggle between calculation and judgement is a false one. Making a decision is always about making a judgement; calculation can be used to inform that judgement. However, that’s not what we have been taught to think. Too often we think rational decisions need to flow from some sort of calculation. We do fake calculations because we have been brainwashed into thinking that we ought to be calculating something when instead we need to use a different method. That different method is wise and conscious use of judgement devices.

Judgement Devices
We are all aware of judgement and we all use judgement devices; but unless you are a recent graduate (and preferably a French one) you probably have never been taught about this concept.  A judgement device is simply any tool we use to make an informed judgement. Common judgement devices include expert ratings such as the Michelin restaurant guides, popularity rankings such as lists of the top movies, and brand reputation such as a Mercedes vehicle has.

The tricky part of judgement devices is that you need to decide which ones to trust and discover how their advice lines up with your own personal needs or tastes. If you are buying a talent management system you might look at the ratings from industry analysts, feedback from your peers and the reputation of other companies using the same system. Yet there is nothing mechanical about this; it is a subtle matter of interpreting the information and deciding what it means in your particular case.  And yes, calculation may play a supporting role in judgement, but you cannot rely on it to guide the best choice.

Does This Matter?
This may feel like we are just adding a label to what we are already doing—does this matter at all? The value is clear as soon as we recognize that judgement is not the ugly stepchild of calculation but our most important decision-making tool; then we will approach it with more confidence and rigour. If you are relying on judgement devices then being clear about which ones you are using, which ones you are not using, and how you will use them can help you make better decisions.

We need to step back and take an honest look at how we make our judgements, then deploy our efforts to improving that process.

David Creelman is CEO of Creelman Research, providing writing, research and speaking on human-capital management. He works with a variety of academics, think tanks, consultancies and HR vendors in Canada, the U.S., Japan, Europe and China. Mr. Creelman can be reached at dcreelman@creelmanresearch.com.