The power to arrive at a wise decision, or judgment, is crucial, especially in investment banking, which is much more than just a numbers game. Refining one’s judgment is imperative for both individual advancement and the overall success of the firm. Judgment is part science, part art, often influenced by personal inclinations, making it challenging to fully grasp. Despite being a nuanced and iterative process, clients primarily remember the outcomes of an investment banker’s judgment, emphasizing its pivotal role in shaping perceptions and outcomes.

Here are several strategies to enhance the ability to improve one’s judgment:

☐ Leverage past experiences. Past experiences provide valuable insights and help us move beyond relying solely on theoretical reasoning.

☐ Assess the likelihood of outcomes. After reaching a specific conclusion, it’s crucial to question its likelihood by asking, “Is this likely?” If the outcome seems unlikely, it doesn’t necessarily invalidate your judgment. It does, however, warrant thorough scrutiny to ensure accuracy.

☐ Consider alternative options. There is usually more than one way to serve the client — a given set of facts and circumstances can lead to different conclusions. Therefore, it’s essential to evaluate your judgment against various options before committing to one.

☐ Use time and planning. When you anticipate the need to make well-informed decisions ahead of time, you can allocate sufficient time for thoughtful consideration. The outcome? Better judgments.

☐ Develop the ability to recognize valuable judgment opportunities. Seek out opportunities to exercise judgment. Given that judgment improves with practice, it’s crucial to hone the skill — sensitivity — of identifying valuable judgment opportunities; they frequently arise during discussions with clients and colleagues.

☐ Regularly exercise judgment. Similar to any other skill, judgment improves through consistent practice and application. Cultivating good judgment is a continuous process of thought and action.

☐ Prioritize effectively. A critical aspect of judgment entails distinguishing between what is significant (‘signal’) and what is not (‘noise’). Further refinement lies in the ability to prioritize the elements being considered based on their importance.

☐ Ground judgments in facts. The strength of your judgment grows in tandem with the depth of factual understanding. Facts are the servants of rock-solid arguments — and outstanding decisions. Embrace all available facts, especially those that may challenge initial assumptions, to provide optimal solutions for clients.

☐ Seek feedback. Testing your judgment with trusted colleagues — or clients — can reveal opportunities for improvement. Every outstanding professional enjoys the challenge of assessing judgments.

Judgments serve as invaluable elements crucial to the prosperity of an investment bank, shaping the quality of work, client relationships, individual bankers’ effectiveness, firm dynamics, and overall professional fulfillment.