Judgement: How Winning Leaders Must Make Great Calls

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In 2000 under the leadership of CEO John Chambers, Cisco was at the top of the game. For a couple of days its market cap was number one in the world.

Then in early 2001 came an industry-wide crash, and suddenly Cisco was near death.

Chambers later said that if somebody had told him they would go from 70 percent growth to minus 30 percent growth in 40 days, he would have said it was mathematically impossible.

The company was in a free fall. At its peak in 2000 Cisco stock was $80 a share. By 2002, it was down to $9.42.

Cisco was in deep trouble. But Chambers was intent on turning things around. And he went on to make some great judgment calls.

Within five years, the stock had rebounded to $28 a share with market capitalization of $170 billion.

Chambers’ judgment helped produce one of the most dramatic turnarounds in business history. But this CEO whose leadership transformed and revitalized the company was the same one who was at the helm when it tanked.

And for Chambers, the task was to figure out where he had gone wrong and how to correct the situation. He needed to figure out what had brought them to the bottom.

What brought you here won’t get you there.

Many said he should have sensed and identified the crisis earlier, because the signals were there.

But leaders are human, thank God. And because we are human, we sometimes have blinders. We get attached to people. Our view of the facts can become distorted, and we don’t want to believe the worst can happen. But when the day comes that you look around and realize it has happened, what do you do?

Chambers crafted his comeback using a four-point strategy:

Make heart based judgment calls by processing, preparing, planning and proceeding.

Process: First he framed what had happened, and what was occurring in the present. He listened, he observed, he learned, he thought.

Prepare:  After assessing all that had occurred, he began laying the groundwork for what needed to happen next. Extensive discussions took place and judgments began to form.

Plan: Then came the time for decisions. Chambers’ plan involved deep staff cuts and a moratorium on acquisitions. But he was also insistent on changing how the company worked together, breaking down silos and reversing the free-spending culture.

Proceed: As he carried out his plan, he kept his focus on a single goal: saving the company.

A good judgment call doesn’t happen with a simple adjustment here and there. It requires complex adjustments, putting together all the pieces to create a plan that can be successfully executed.

It requires the ability to sense and learn—which are the same abilities that can best help to prevent a crisis from forming.

A great leader is always sensing and learning.

Heart-based leaders already know how to do these things, because they represent the wisdom of the heart. As you’re processing, preparing, planning and proceeding through any situation, learn to trust what you’re sensing and your ability to separate the important signals from the unimportant.

Lead From Within: Heart-based leaders sense and make good judgment calls well before circumstances become a crisis. Climbing is the only cure for gravity.

 


 

N A T I O N A L   B E S T S E L L E R
The Leadership Gap: What Gets Between You and Your Greatness

After decades of coaching powerful executives around the world, Lolly Daskal has observed that leaders rise to their positions relying on a specific set of values and traits. But in time, every executive reaches a point when their performance suffers and failure persists. Very few understand why or how to prevent it.

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Photo Credit: Getty Images


Lolly Daskal is one of the most sought-after executive leadership coaches in the world. Her extensive cross-cultural expertise spans 14 countries, six languages and hundreds of companies. As founder and CEO of Lead From Within, her proprietary leadership program is engineered to be a catalyst for leaders who want to enhance performance and make a meaningful difference in their companies, their lives, and the world.

Of Lolly’s many awards and accolades, Lolly was designated a Top-50 Leadership and Management Expert by Inc. magazine. Huffington Post honored Lolly with the title of The Most Inspiring Woman in the World. Her writing has appeared in HBR, Inc.com, Fast Company (Ask The Expert), Huffington Post, and Psychology Today, and others. Her newest book, The Leadership Gap: What Gets Between You and Your Greatness has become a national bestseller.

20 Responses to “Judgement: How Winning Leaders Must Make Great Calls”

  1. Jon Mertz

    03. Sep, 2013

    Insightful points, Lolly. In each of the 4 Ps is a 5th one — People. In processes, people define and coordinate, aligning for achievement. In preparation, people take stock of lessons learned and what is possible ahead. In planning, people come together to determine a path forward to achieve a new vision. And then in proceeding, it is about people taking steps, acting fully, and moving an organization in a smarter direction.

    It is about good judgment all the way through and trusting people to adapt and do throughout it all is vital.

    Thank you for highlighting this story and lessons learned.

    Jon

    Reply to this comment
  2. Martina

    03. Sep, 2013

    Good points Lolly. I appreciate that one of the first things you mentioned in “process” was to listen and learn. Often leaders (as most people) listen, but do not actually hear and learn from the information they are gathering.

    And once youhave accumultaed you have to discern a just and logical heart-based model to take yourself, the people you serve and the copany through to the future.

    And, just as you have said, “climbing is the only cure for gravity,” so too remember that getting up again is the best cure for having been knocked down.

    Reply to this comment
  3. lollydaskal

    03. Sep, 2013

    Absolutely PEOPLE are important
    they are the ones that make this process work.

    it starts with people and it ends with people.

    Without them it will not work

    I agree with YOUR COMMENT Wholeheartedly.

    THANKS Jon!

    Reply to this comment
    • lollydaskal

      03. Sep, 2013

      I got a note this morning from a very well intended heart and it said the following:

      Are you aware that John Chambers last week announced another 4000 layoffs (on top of the several thousands in the last 2 years) in spite of presenting amazing revenue and profit figures last week?

      That his stock value went down in spite of that and that he is being criticized as a leader for consistently serving short term shareholder value on wall street and lining his own pockets (plus the boards and shareholder pockets) at the cost of People?

      That he is supposedly not successful at increasing his sales and that he only knows how to improve profit figures (pressured by shareholders) by reducing the operational costs (= firing people) over and over again? As opposed to sustainable growth in his sales?

      Without a doubt he has been brilliant in bringing Cisco back to life with his 4 P’s, and he has great leadership skills

      And the P of People seems to be missing somewhere the last couple of years for the benefit of short term Profit and short term gains.

      I was just wondering if you were informed about these recently announced layoffs and critiques when you wrote this post.

      Dear well intended heart. Yes I am aware of it all, and yes in life and leadership- we have ups and downs and yes we have good times and bad times and I FEEL we learn from them all.

      I feel we SHOULD NOT JUDGE. I still stand by the great judgment call John did and how he was able to pull off.

      It is 2013 and a lot has happened since, that is the nature of business. but I feel it is important TO LEARN OUR LESSONS from the past, present and going forward to the future.

      That is a Leadership’s Judgment isn’t it?

      I will retell this story many times, i will tell other stories as they unfold.

      I stand by my words and hope the PEOPLE do less judging and more sensing and observing.

      With all my heart

      Lolly

      Reply to this comment
      • lollydaskal

        03. Sep, 2013

        You must first of all think justly. Don’t sit in judgment over others when you don’t know the truth of the matter.

        Reply to this comment
    • lollydaskal

      03. Sep, 2013

      Good judgment comes from experience, and a lot of that comes from bad judgment.
      Will Rogers

      Reply to this comment
  4. Alli Polin

    03. Sep, 2013

    So often, when the business tanks, the CEO is out and has little ability, good will or trust to turn the ship around. Speaks volumes about John Chambers as a person, that he not only helped Cisco to rebound, but also maintained the trust and confidence of the organization throughout the process. Love the four P’s and Jon’s fifth addition!

    Reply to this comment
    • lollydaskal

      03. Sep, 2013

      A leadership’s judgment creates culture in an organization.

      We must follow our heart and take the organization with us.

      We the people make the plans work.

      Lolly

      Reply to this comment
  5. Panteli Tritchew

    03. Sep, 2013

    The four P’s plus People makes great sense! Implicit in the Cisco story about John Chambers is that in the first two stages, Process and Prepare, he must have judged (and reversed) numerous policy decisions that were originally his own.
    Admitting that we are so wrong, on so many levels, and so publicly takes both courage and humility. Not coincidentally, these two traits, too, come from the heart… Have a great day Lolly, Jon, Martina, and Alli!

    Reply to this comment
    • lollydaskal

      03. Sep, 2013

      YOUR observation of the four P’s are Brilliant!!!!

      When I facilitate the FOUR P MODEL in my workshops.

      It most certainly emphasize the importance of OBSERVING AND SENSING and it has to be without too much self judgment.

      If you have too much self judgment there is no room for improvement because we hang onto ego and as we discovered last week
      in the unmasking of ego – there is no room for learning, growing, discovering.

      Lolly

      Reply to this comment
  6. LaRae Quy

    03. Sep, 2013

    Your definition of heart-based leadership adds an important dimension: sense and make good judgment calls. Very often, we think that leading from the heart is limited to servant leadership—and while that is important, I also believe that leading with our gut (our instinct) is one of the best ways for us to make those good judgment calls. This is a deeper subject than one post…I hope we see more of how heart-based leaders make good decisions – great topic!

    Reply to this comment
    • lollydaskal

      03. Sep, 2013

      We must sense to judge.

      We must learn to judge.

      We must observe to judge.

      Otherwise we are not judging we are controlling.

      leading with our heart – is about instinct, truth and wisdom.

      it feels right and it does right by those we lead.

      Heart based leaders make decisions by the wisdom of the heart which makes up for the thinking head.

      Reply to this comment
  7. Tasneem Hameed

    03. Sep, 2013

    The proverb “Nothing succeeds like success” always haunts me. Once we achieve success we don’t mostly analyze what made it happen. But, when we fail we go into all sorts of things ranging from analysis to brainstorming, reach definite conclusions and decide a course of action. Isn’t negative to concentrate on what went wrong instead of what made us successful in the first instance. Learning from our mistakes is a good thing, but learning from our successes is more important so that our goodness is not thrown away in the garbage in our quest for our mistakes. First identify your strengths and avoid corresponding weaknesses that must not be allowed to overrule your strengths. If this does not happen then the result might be a temporary turnaround followed by a complete collapse.

    Reply to this comment
  8. Samantha

    03. Sep, 2013

    Great post Lolly.

    In many ways we can all judge too harshly because it’s easier if we are not the one having to make the touch decisions as you’ve described in the example above.

    Rarely will ANY leader or business owner be able to please everyone all across the board. It takes juggling and some difficult but critical decision making to do what needs to be done, without any certainty that things will turn around.

    For leaders in this situation, I empathize with a great deal. It’s not easy being the one who has to make decisions that will impact so many lives.

    That said, when it comes to ‘other’ behaviors in leadership like lies, abuse, etc. I do feel we need to make judgements about that. Clarification: there is a big difference between making discerning judgments about people’s character based on their behavior and condemning them.

    We make judgments every day. Several times a day. We judge between different products at the store. We judge between which posts or links to click on in our feeds here on Twitter to read. (I clicked on yours today! : ) We have to make judgements about how we will spend our time and with who to spend it with, etc.

    So for me, it comes down to this. I know that I may have to make some decisions (judgments) from the heart and have in my life that were absolutely necessary. My goal/intention is to be able to keep my heart open without condemnation of people (focus on behavior). Naturally, it sometimes easier said then done! : ) Yet even in this, we are granted an opportunity to explore and discover the blocks that come up in our lives can hopefully lead to a greater sense of compassion for self and others.

    I love your quote: ‘A great leader is always sensing and learning.’

    It’s true.

    Thanks for another wonderful post Lolly.

    Reply to this comment
  9. Karin Hurt

    03. Sep, 2013

    Great post, and loved both Alli’s and Jon’s additions and others. People matter so much in this mix… There are people in many roles, and the leader’s role is to carefully consider the best way to engage the hearts and minds of people at every level for the greater long-term good for all. A complex undertaking.

    Reply to this comment
  10. Bill Benoist

    05. Sep, 2013

    I live in Silicon Valley – not too far from Cisco Headquarters and I know many people who work for the company. But it’s not just Cisco in the Valley. We have IBM, Yahoo, Google, Intel, AMD – the list goes on and on. All these companies have experienced layoffs over the years. It’s what Chambers learned from the experience I believe has set Cisco apart from their competition – removing silos, controlling expenditures, not buying every startup on the market, etc….

    In fact, I can think of several Cisco competitors who never recovered from the recession and are no longer around the area.

    BTW – Love the WIll Rogers quote!

    Reply to this comment
  11. Terri Klass

    09. Sep, 2013

    Your brilliant post, Lolly, speaks to the importance of knowing how to make good judgements. It is not always so easy but I love your 4 points of trying to do it. I particularly love the one: “your ability to sense and learn” As leaders we need to trust our gut and do what is best and right.
    Thanks Lolly!

    Reply to this comment
  12. Lucy Ann Moll

    08. Nov, 2013

    Right on, Lolly. I appreciate his focus on one goal. Be gone distractions. I’m to applying your points to my counseling ministry today. Thank you!

    Reply to this comment
  13. Shawn Mathis

    22. Jul, 2016

    Lolly,
    Thank you for these thoughts. As always, I value your words of wisdom.
    Shawn

    Reply to this comment
  14. Stephen Rodgers

    23. Jul, 2016

    Surely, these are great points. Really a good judgement is born out of a heartfelt and honest assessment of ourselves. I also agree to the fact that not always can we succeed hence needful, in leadership to exercise some grace even on ourselves.

    Like here in Malawi, to some extent, success has been viewed as ‘not failing.’ I think that’s a flee from reality and need to check that for we can never get there without fully appreciating the weight of failing in praxis. ‘Leading from the inside’ doesn’t overlook the possibilities of failing, yet good calculated judgements puts that into perspective. Thanks Lolly

    Reply to this comment

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