Judgment is the x-factor.

group of people huddling

SafeGraph has six core Values and one (“Judgment is the x-factor”) of them was basically lifted almost verbatim from the LiveRamp Values because it is the most important value to me:

Judgment is the x-factor. It is essential that every team member at SafeGraph makes key decisions autonomously, so that we move fast and limit bureaucracy. But as Voltaire (sometimes attributed to Spider-Man’s Uncle) said, “with great power comes great responsibility.” To make great and effective decisions at all levels of the company, we need to (1) clearly communicate the company’s strategy to all team members; (2) hire super smart teammates that work hard; (3) only hire people who have demonstrated sound judgment and are deserving of our trust.

It is really powerful to work at a company that exclusively employs people with good judgment.  It allows you to move faster. It builds trust amongst coworkers. It eliminates bureaucracy.

To do that one has to actively discriminate against people with bad judgment: which means you need to make this one of the core criteria during interviews (and through observations once someone starts).

The main reason that you want everyone in the company to have good judgment is so you can have fewer “rules” which allows you to move faster.  Much faster.  The more rules, the slower you will move.  The more you trust employees to make decisions, the more decisions will get made.  

I wrote in “Pace, Tempo, Speed, and OODA loops“:

“At SafeGraph, I try to deliberately make as few decisions as possible.  I deem it a failure if I need to make a decision … because that means we are moving slower in that area.  That does not mean I don’t make any decisions — I do.  But those are failures I hope to improve upon in the future.  Additionally, you don’t want the management team making decisions.”

Of course, when you trust others to make decisions, it means they won’t always be made exactly the way you want them to be made.  You need to be ok with that.  That is a by-product of decentralized decision-making. 

As a CEO, you can still reserve the most important one-way door decisions for you to make … that way if you completely screw up the company at least you can only blame yourself 🙂  In fact, that is one of the reasons I love being a CEO — I have only myself to blame.  For instance, you’ll likely be extremely involved in hiring people (even if you ultimately empower the hiring manager) because having people with good judgment that your team can trust to run with the ball is so important.

While most of SafeGraph’s values are aspirational (and we can fail at them), judgment is an absolute must.  If we hired someone without judgment, we would have to terminate them … as people with bad judgment are a real cancer on organizations.  Because people with bad judgment create rules.

When we sold LiveRamp to Acxiom in 2014, the first thing I did was read the Acxiom HR handbook.  There were lots and lots of rules.  One rule I found particularly interesting was “you cannot do cocaine on premises.”  After talking with the SVP of HR, I found that yes, there was a story of someone actually caught doing cocaine in the Acxiom bathroom. Rather than just immediately firing the offender, they also thought it was necessary to add a rule.  But you cannot enumerate all rules (there was no written rule against heroin or meth … there was no written rule stating people must wear clothes to work).  One must eventually rely on people for their judgment.

Good judgment is the answer to lots of rules.  And lots of rules make decisions take longer which means the company would inevitably move at a slower pace (see recent scribe on pace).  Judgment is fused with pace.  All things being equal, a company filled with people with good judgment can outrun a company that is not.

Of course, judgment does not mean you need to stop and contemplate all your moves.  It should be ingrained in what you do.  It does not mean you never make mistakes.  It does not mean you never have a bad day or act in a way you regret.  But it does mean you don’t need a seminar to know that harassing someone is a bad thing. It means you don’t need a training to know you don’t discriminate on race.  Good judgment knows that one must act in the best long-term interest of the company.  

  clearly communicate the company’s strategy to all team members

It is really hard to act in the best long-term interest of the company if everyone is not in sync about the company’s long-term interests.  That is why it is really important to clearly and frequently discuss the company’s strategy.  The more you are all in sync about where the company is going in the long-term, the more you can rely on judgment of your fellow teammates to get you there.  Planning becomes less important with judgment because everyone knows where the company is headed.

One of the primary missions of the CEO is to help everyone in the organization understand the long-term strategy.  It is actually really hard to do that and I have frequently failed at it at SafeGraph, LiveRamp, and other organizations I have been a part of. 

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