Timestamps:

00:00:00 The Most Valuable Skill in Hiring
The host introduces judgment as the single most valuable skill he looks for when hiring new team members.

00:00:58 Execution vs. Judgment
Business success shifts from execution to judgment, which involves making critical decisions on pricing, products, data, and team management.

00:02:09 AI’s Role in Execution
AI is excellent at executing repetitive, process-driven tasks, making human executors less necessary in modern business operations.

00:04:21 The Value of Human Experience
Hiring smart individuals brings valuable experience, including lessons learned from past failures, which builds strong judgment for the team.

00:06:57 Defining Judgment
Judgment is making solid decisions with incomplete information, unlike intelligence. It’s about knowing what to do and what to ignore.

00:09:13 How to Identify Good Judgment
Key indicators of good judgment include a track record of results, identifying constraints, focusing on impactful tasks, and acting decisively.

00:13:02 Developing Judgment in Your Team
Develop team judgment through experience, creating feedback loops for learning from wins and losses, and teaching them to say no.

00:15:23 The Importance of Learning from Experience
Team members must have a feedback loop to articulate why something worked or didn’t, and then refine systems accordingly.

00:17:26 The Power of Saying No
Good judgment involves prioritizing the few key tasks that drive results and saying no to less important initiatives.

00:18:30 The Steve Jobs and Apple Story
Steve Jobs simplified Apple’s complex product line to just four core products, demonstrating judgment by focusing on what truly mattered.

00:21:59 Busyness Doesn’t Equal Results
Activity and being busy do not guarantee success. The focus must be on whether the work is producing meaningful business results.

00:26:09 The Leader’s Role in Judgment
A leader’s job is to ensure the team works on what matters, not just completing tasks, and to stop unproductive projects.

00:29:39 A Warning: AI Can Weaken Your Judgment
Over-relying on AI for strategic thinking and communication can weaken a leader’s own judgment by removing necessary mental friction.

Links and Mentions:

Tools and Technologies
“Claude“: “00:03:12”

Concepts and Ideas
“SOPs“: “00:02:09”
“AI as an executor“: “00:03:12”
“Feedback loop“: “00:15:23”
“411 meetings“: “00:16:28”

Examples and Anecdotes
“Steve Jobs and Apple”: “00:20:54”

Key Takeaways
“Judgment vs. Execution”: “00:06:57”
“Identifying constraints”: “00:10:21”

Recommendations
“Hiring for judgment”: “00:13:02”

Transcript:

Josh Hadley 00:00:00  I’m going to share the single most valuable skill that I look for when I hire someone today, and more importantly, how you can develop more of it within the team that you already have. Welcome to the Ecomm Breakthrough Podcast, I’m Josh Hadley. I’ve scaled my own ecommerce brand from 0 to 8 figures, and I’m actively building towards nine figures in sales. This podcast is where I document that journey and share the systems, the strategies, and the lessons learned in real time so that you can learn what actually matters and scale your own business. My name is Josh Hadley. First and foremost, I’m a man of faith. I’m a husband to a beautiful wife and the father of four children. I’ve been selling in the e-commerce space for over a decade now, doing over $20 million in annual revenue in multi-million on channels such as Amazon, TikTok, Shop and Shopify. And I am also the host of the number one business strategy podcast for ecommerce entrepreneurs, Ecomm Breakthrough. Today, I’m going to share why judgment is the number one skill that you should be looking for whenever you hire someone.

Josh Hadley 00:00:58  Look, at the end of the day, you can have all the SOPs, the dashboards, the data and the right team, but still make the wrong call because at a certain level of business, business stops being about execution and it starts being about judgment. Knowing when to raise prices, knowing when to kill a product, when to trust data or not, when to ignore it, and when to coach someone versus when to you need to replace them. That is where the real money is made or lost in business. So today we’re going to dive into like what this skill of judgment is and why I am so adamant about hiring for this and why it’s the number one skill that I am looking for in any of my team members today. The reason why I am so adamant that judgment is one of the most important skills that you should be looking for and developing in your team is because with the advent of AI, I think that execution layer in any business is almost becoming extinct. And if you are employing people that need to just go execute tasks for you, I would say you’ve got it completely backwards.

Josh Hadley 00:02:09  And honestly, if that’s the reason why you’re hiring a lot of people is just because you have so many tasks and they just need to be handed off to someone else, maybe it’s a virtual assistant or something like that. That can be good. Yes. I’m very proud of you for getting things off of your plate. However, with AI, that’s what it’s so good at. AI is a great executor. If you have a process that is always follow x, y, then z. And by the way, don’t ever deviate from that. Always make sure you do x, then y, then z. I would give that to AI all day long. And honestly, that’s how I started my business. The first people that I were was hiring in the business was just to go follow a very repeatable process, because that’s what I needed. I needed people to take things off of my plate. And so, yes, if that’s what you’re used to hiring for is getting things off your plate, creating a whole bunch of SOPs and giving it to other team members, I would say yes, that’s a step in the right direction.

Josh Hadley 00:03:12  However, with AI now, I would highly encourage you to go take all of those SOPs. And in fact, what you could do is even go record your screen as you go, execute a process using Claude, and then have Claude code turn that into an actual like Claude skill for you, and then that way it goes and executes the same task over and over and over again. And it can click buttons. It can go do things for you. It’s not just like data entry. It can actually click around and navigate on websites. Just tell it exactly where you want it to go, what you want it to do, and what the outcome is. And AI is really good at just going to go execute tasks. So the biggest distinction that I’m learning is the team members that I was used to hiring to go just like kind of execute tasks, to be honest with you, that almost needs to be retired. That mindset of hey, if I have something that’s do X, then Y, then Z, I need to stop looking at people first for that, and I need to look at AI first.

Josh Hadley 00:04:21  Now that doesn’t mean that I don’t want to hire anybody. Quite the contrary. I still think one of the number one biggest Rois and the biggest arbitrage moves in business is hiring a very, very, very smart, capable individual. And it will always be that way until the end of time. Because guess what comes with an individual. You get their experiences. You get the all of the decisions that they have made, both the good and the bad. And if this is a really competent person. All of those bad decisions that have happened. Guess what? They could actually become some of the best skills and assets that you actually want to bring onto your team. I’ll give you a short example here. We just recently hired somebody to support our Amazon department on the team. This gentleman had started his own business, has sold in the Amazon FBA ecosystem, and also crossed the $10 million mark with his brand. However, guess what happened? One day he had a product recall and ultimately had so much over a couple million dollars of inventory sitting in a warehouse that ultimately just needed to go into the trash.

Josh Hadley 00:05:45  And so that was a very painful experience, and he had to go through bankruptcy. But guess what? That experience doesn’t tell me, oh, he’s not a very capable leader. Quite the contrary. What I wanted to do is I interviewed him, was asking him, hey, what were some of those experiences? What are the lessons that you learned from that? And guess what? That was the primary reason why I wanted to hire him, because he fell down, he scraped his knee, but he got back up and he knows what went wrong, where it went wrong. And I’m bringing him onto the team to bring on that keyword called judgment, to make sure that we as a business, don’t need to scrape our knee and do the same thing that he ultimately ran into. So that is why I am adamant when I am looking to hire anybody now I’m less worried about like, hey, how fast can you go do something? And do you know the correct process? Follow X, Y and Z and I am much more interested in how do you conceptually think about this? So let’s dive into this a little bit further, let’s talk about what judgment actually is.

Josh Hadley 00:06:57  Let’s talk about the difference between execution and judgment. Because ultimately execution is going to ask this hey, what are the next steps? What do you want me to do? Judgment asks, what should we be doing and what should we be saying? No to judgment is basically the ability to make a solid decision when the information is incomplete. The trade offs are messy and there is no obvious answer. It is not the same thing as intelligence. There are plenty of smart people that have terrible judgment because they overthink, they rationalize, they chase novelty, or they fail to learn from consequences. And ultimately, this is why I’m such a big advocate for hiring humans and having one of the biggest Rois in business coming from hiring an exceptional person into your business. Because at the end of the day, AI is very, very good at following exact steps from going to point A all the way to point Z. It will go through every letter of the alphabet in the correct order. However, judgment is going to be the person that says, yeah, I know where we’re going.

Josh Hadley 00:08:08  We’re going to go to point Z. However, this time we’re going to skip letters H, T, and S because I’ve seen this before. A it’s a waste of time and I think we can get to point Z faster if we do. If we skip those steps, that is what AI does. Such a poor job of AI is not a good judgment layer. AI should never be your thought partner to say, hey, there’s this big like strategic question or direction. Like we’re standing at a crossroads, which way should I go? Because AI is just about following very logical paths. It’s not about creativity or experience or intuition or gut feel. So ultimately, you should be asking yourself the question, how do you know whether someone actually has good judgment or not? So I spent the time thinking through what does it mean for my team members to have good judgment at versus some of the other team members that maybe don’t have great judgment? What’s the differentiator? Well, number one, let me tell you.

Josh Hadley 00:09:13  So number one track record of driving results. So do they actually have a track record of driving results? Somehow they know in their mind they’re able to pull the right levers. And they know that that lever is going to drive results and they produce results. Time and time and time again it does not. And I want to define this very clearly for you. That does not mean they’re just like checking off a to do list saying, hey sir, I got all of these things done. Your email inbox is triaged and I deleted a whole bunch of stuff per your directions. That to me is not a result. That to me is okay. Great. You checked off a to do list. When I say results, it’s driving revenue or saving expenses in the business. Okay, now the second thing. How else can you identify whether someone has good judgment or not? Are they able to identify the constraint? Because guess what? There are unlimited ways to go influence the sales in an organization. There’s unlimited ways to advertise on Amazon.

Josh Hadley 00:10:21  You ask a hundred different Amazon sellers the best way to set up your PPC campaigns. You’ll get 100 different responses, guaranteed. And there’s not one right solution. However, you need to be able to take unlimited opportunities with finite resources and understand the one thing that if that gets solved, we’ll solve all the other problems, and that’s identifying the constraint. It’s if you have a sales leader on Amazon that’s responsible for generating sales. They need to be able to look at all the different kind of factors or levers that they could pull, such as, hey, I could do main image optimization, I could update our the product copy and the keywords, the bullets. I could update the back end listings. I could update the secondary images. I could update the title, I could update the PPC strategy. The list goes on and on and on and on. They need to be able to identify through pattern recognition, which of those levers is actually worth sinking their time into. That is being able to identify the constraint.

Josh Hadley 00:11:28  Now, the third way that you’re going to be able to identify whether someone has good judgment or not, they don’t get lost chasing multiple tasks. Here’s what I find so often. What the people that are like really good at executing, but maybe are lacking in some judgment, they end up spending all of their time Him doing a lot of things. They could even be putting in 60, even 70 hour work weeks. But if results are not changing based off of what they are doing, they are lacking in judgment because you should be able to identify the number one thing that if you get that right, that will actually drive the results and forth. And finally, they are able to take action with incomplete information. That is probably one of the most key things. And this is why AI is so bad at judgment is because if you have incomplete information, AI is going to steer you off in the wrong direction. Whereas someone with judgment who has been around the block a time or two is able to take incomplete information, say, great, I might not have all the PPC data that I need, or I might know not know exactly what’s going to happen next year, next month with the economy or whatever, but they’re able to make the strategic move and the decision to actually move the needle forward.

Josh Hadley 00:13:02  So my encouragement to you listening to this is next time you’re trying to hire someone in that interview process, one of the key things you should be on the lookout for are looking at those four different like criteria to understand whether someone does have actually like, have they been able to produce results? Are they able to identify the constraint? Are they able to like, stay out of the weeds at a high enough level in order to actually know what needs to be focused on? And are they good at saying no? So ultimately focus on that not only as you’re hiring people, but here’s the next key thing that you should be focused on as a leader. How do you actually develop judgment for your team? Well, number one, judgment comes from experience at the end of the day. So sometimes you’re just going to need to give someone enough shots on goal, which means especially if you’re hiring someone fresh out of college, right? They might not have all of the reps in the world. Let’s say you’re hiring them for Amazon Pay per click advertising management.

Josh Hadley 00:14:08  Okay, great. Well guess what. You have to budget in the fact that they are going to be learning on your dime, and they are going to be refining their judgment through the opportunity that you are giving them. And so with that being said, this comes full circle back to hiring. Oftentimes we have there are many business owners that are just ecstatic and always share, hey, I got this person at X-ray and it’s really low rate or something like that. And it’s like, great, you might have got someone really cheap. But guess what I’ve learned through my experience. The cheapest people aren’t always the best people. Okay. And because if you’re getting somebody that’s brand new and fresh, they may be starting at like a very basic entry level salary, and that’s fine. But you need to understand that you are helping them gain that experience. So allow them to experiment and fail, which goes to number two. How do you develop this judgment? They it’s not just experience on it’s own of just like, hey, go follow this process over and over and over again.

Josh Hadley 00:15:23  The critical thing and this is what you should be measuring is are they learning from the things that they do, both the wins and the losses. So do you have a feedback loop in place, and is that team member able to articulate why something worked versus why something did not? So rather than just like regurgitating hey, here’s the result. Blah. I don’t need just the result. I want you to articulate why did this work? Why did this not work? And then how are you going to go refine our system because of what you did? How are you going to change or update our SOPs? Someone who is able to do that feedback loop quickly, that is the person I am more than happy to hire that, you know, early college grad that doesn’t have a whole lot of experience. I am more than happy to bring them onto the team if they are very, very good at documenting that feedback loop. And for us, every single Monday, we have what we call our 411 meetings.

Josh Hadley 00:16:28  These are the meetings where our team members are going to say, hey, this is what I got done last week. These are my plans last week. The key thing that I’m looking for, and the best people that I’ve seen execute in these meetings are the people that said, I tried this. It didn’t work according to plan. Here’s what I’m changing in our SOP, and here’s what I’m going to go do differently this week to see if this works better. Those are the people that get better and better and better. And guess what? That better and better. Just getting 1% better every day. That compounds meaningfully over the course of a year. And then last but not least, how do you help develop judgment in somebody learning what to ignore? You need to help your team members be able to identify what they need to say no to. So again, when I come to those weekly meetings on Mondays when my team is presenting, hey, here’s the list of things that I need to do this week.

Josh Hadley 00:17:26  What I’m looking for is not whoever has the longest to do list. I’m almost looking for the person who does not have a long to do list, and actually is able to consolidate it. To hear my three key priorities this week, that if I do these things, everything else will actually like produce results. I am looking for that person that is able to say, you know, I know this needs to happen or it can happen, but I’m actually going to solve this number one constraint because I do believe that if I solve that, we don’t even need to pay attention to that other process anymore. That is the type of person that I know they are learning how to say no to things because, look, we all have limited amounts of time and we have unlimited possibilities of what where we could spend our time every day. And so you as the CEO, if you want to get better at your own judgment, learn to say no, because some of the best judgment skilled people on my team say no to a lot of things.

Josh Hadley 00:18:30  To bring this home, I want to share a story about Apple and Steve Jobs because I feel like, yes, we can talk about judgment. And honestly, here’s here’s my last anecdote before I share this story. Look, this comes from experience. You as the leader of a business. You don’t know what good looks like on your team until you actually go higher for it. And once you hire that person, that is good. Then guess what? Your bar has now risen, and so every time you go out to hire, you should be looking to raise that bar over and over again and again. You just don’t know what good looks like until you actually move forward and take those steps. And so that’s my encouragement to each of you, is like, you will only understand what I’m referring to when it’s when I talk about like why judgment is the number one skill. Because for many of you that will go over your heads. And I’m saying that because I’m preaching to the choir. I’ve been in multiple masterminds, and I’ve had a business mentor, and one of his podcast episodes years ago was about why judgment was so important.

Josh Hadley 00:19:44  And I remember listening to that and I’m like, yeah, yeah, yeah, make good decisions. But until you have your own team and until you’re able to identify, hey, the difference maker is these people that are able to make decisions and they’re actually able to make the right decisions over and over and over again. And honestly, they’re able to make the difficult decisions when there is incomplete information, when we’re kind of stuck between a rock and a hard place. And maybe it’s the it’s like, what worst decision do you want to make? It’s those people that provide meaningful returns into the business, whereas you might get caught just stuck in the loop of working with a lot of people that are just executing over and over and over again. And so my encouragement to you is like, keep moving forward, keep hiring, keep experimenting with new people. Keep trying to encourage your team members to express more judgement, to be able to say no to more things, to ensure that they’re documenting the things that they are learning on a weekly basis.

Josh Hadley 00:20:54  And as you do that, you are going to see not only them succeed in their career, but your business will change because it is going to change because of the decisions being made on your team, not the tasks being executed. When Steve Jobs returned to Apple in 1997, the company was in serious trouble, and one of the first things that Steve noticed was that Apple was doing a lot. They had a long list of products, projects, computer models, and they had a bunch of different initiatives in the company. Different teams were working very hard and there was plenty of activity. It’s not like people were just sitting on their hands, but the company was still losing. I cannot like double down on that enough. Way too many entrepreneurs that I talk to are so busy doing just a lot of administrative crap, or spending their time on a lot of wasted initiatives that are not going to move the needle forward. And honestly, as your business scales, this is something you need to be on the lookout for.

Josh Hadley 00:21:59  Your team is going to start just working on a bunch of ad hoc projects, and they might be working. They may be staying very busy, maybe working 4050 hour workweeks. Great. But if their results are if their work activity is not driving a result in the business, it’s all for naught. And I think like that’s my biggest caution to any of you listening to this, like, be on the lookout because busyness does not equal results or success, okay? There are always constraints and single levers in a business that will provide Outsized returns always is. Amazon is one of those, right? Instead of working, you know, trying to get your products into multiple, you know, maybe small mom pop boutique retail store shelves. You can get listed on Amazon, one of the world’s biggest marketplaces, and immediately start generating sales. That’s a that’s a decision where you could go the hard way or you could go the smarter way, right? And so there’s just like every problem that you’re trying to solve right now, there’s a harder way where you’re going to be working harder and busier, and then there’s the smarter way that you might actually do less but get a bigger output from it.

Josh Hadley 00:23:23  So let’s continue in this story, because this is exactly what Steve Jobs did. Steve Jobs eventually got frustrated with the complexity of the business, and he walked up to the whiteboard and he drew two simple a two by two grid. Okay. And across the top he wrote. Consumer and then professional. Okay. And then on the side he wrote desktop and portable. And from that he basically said, we’re going to build four great products. He was trying to simplify everything. That was it. He was taking all of these initiatives, projects, things people were working on, consolidate and consolidated it into four things. Number one, a consumer desktop. Number two, a consumer laptop. Number three, a professional desk desktop. And number four, a professional laptop. Everything else had to justify why it should continue to exist. And Apple started killing projects. And that, I want to say, is like something that is just good business hygiene. we as entrepreneurs like their shiny object syndrome. You go to a new conference and you bring back a whole flood of ideas, and then you just dump them on your team and then they’re like, so which one do you actually want me to start doing? And instead, what ultimately happens is they just start doing all of it.

Josh Hadley 00:24:53  And not all of those things are the right things. You, as the CEO have to be the filter. You have to be the number one person that is able to tell your team, hey, this is where I want you putting all of your energy and direction. So Apple started killing projects. What projects in your business do you need to start killing? That is the part of the story that I think like leaders miss the most. Everyone working on those other projects, it at Apple probably had a very long to do list. They had meetings they had to go to, they had deadlines, they had roadmaps, they had presentations that were showing progress, like quote unquote. They were extremely busy. but Steve Jobs understood something that seems obvious until you are actually running a business. The company does not get paid because everyone completed their to do list. Mic drop right? The company actually gets paid when the right things produce results. And do you know what that requires? Judgment. Because if you are a leader, your job is not simply to ask, hey, did everyone do what they said they were going to do this week? That doesn’t matter.

Josh Hadley 00:26:09  Yes it matters. People should do what their has to do. But your job is the CEO is to continually ask, are we working on the things that actually matter? Is this task or project producing the outcome that I expected? And if it isn’t, what needs to change? And maybe most importantly, what should we stop doing so that we can put our time and energy into the right thing. I think this is where a lot of high performers eventually hit a ceiling early in your career. You’re rewarded for execution, right? People are like, wow, you’re super fast. Wow. You always meet your deadlines. Someone tells you what needs to get done and you do get it done. You answer the emails, you finish that project, you hit the deadlines and people are cheering you on, right? They actually admire you. I don’t know how you do so much work, right? You’re checking all the boxes and that can make you incredibly valuable and I would say incredibly valuable in the pre AI world.

Josh Hadley 00:27:13  But the higher you move up in an organization, the less valuable that skill becomes by itself, because eventually nobody is supposed to be giving you the perfect to do list. You are supposed to figure out what belongs on the list, and that is judgment. Okay, because a strong leader can walk into a messy Situation with 30 different things happening and be able to say, hey guys! Yes, those are great initiatives. Love that we’re so busy. However, these are the three things that actually matter. This one is not working. These other five things can wait. And let them let those other dumpster fires burn. And this is the constraint that is holding everything back. And then they drive the organization to actually solve that constraint. That is very different from the entrepreneur that is just constantly tracking time and monitoring. Hey, are my Vas staying busy enough and are they actually clocking in, clocking out at the right time every day? That doesn’t matter. You can have a leader who works 60 hours a week, responds to every slack message, attends every meeting, and completes every task.

Josh Hadley 00:28:27  And yet, six months later, nothing meaningful has changed in the business. You could have another leader who deliberately ignores half of those other things, focuses the team on the right constraint, and actually produces a breakthrough result. That second person has better judgment. And that’s exactly who I want on my team. And I think that’s one of the hardest transitions in leadership, is you originally are going to start by like hiring a bunch of execution level staff. That’s going to drive things forward for you, but you have to stop measuring yourself and your team by how much work you completed, and start measuring you and your team by whether the work changed the outcome. Quote unquote, sales and profit because activity feels productive. Checking things off your list feels productive. Being busy often feels productive, but results are the only thing that tells you whether your judgment was actually right. My final warning that I want to give to you. If you’ve listened through this whole podcast episode, my final warning for you is that AI is destroying your judgment layer.

Josh Hadley 00:29:39  If you’re an executive, if you’re a senior leader in a business right now, I would say the biggest watch out for you right now is to stop letting AI reply to all of your emails. Stop taking your financial report at the end of every month, dumping it into AI, and then letting AI dissect what’s going on, copying and pasting those results, and then copying and pasting them in an email to your team saying, hey guys, this is this is what’s wrong. This is the direction we need to go. Because guess what’s missing when you do that? There is something about this thing called our brain that learns not by copying and pasting things, by actually meeting friction. Having to think through a problem and actually solve that problem in one of the best places. Science is actually proven this when you put things from your mind into pen and paper, or even actually writing the email yourself, not letting AI write the email, your brain is going to actually conceptualize what it is that’s going on. And so I’ve seen this over the past year.

Josh Hadley 00:30:54  I’ve heavily relied on to AI. And guess what? I think I’ve made some worser decisions because of AI. And so my biggest change is I rarely am using AI to send strategic feedback to the team. It doesn’t mean I completely, do not use AI, but when it comes to solving the constraints of the business, I can use AI as a thought partner. But when I am articulating a message to the team that says, this is where we’re going, this is what we have to stop doing. This is what we have to start doing when I actually think through it and type it out, as slow as that might be, and you might be listening to this and saying, oh yeah, hey, Josh, I got your old school man. Like you might say, that’s true, but I will promise you that over the course of five years, my judgment layer is going to be ten times stronger than yours, because this whole copying and pasting and just letting Claude be your executive assistant, replying to all of your emails, you’re missing a massive amount of judgment and you’re not completing that feedback loop to say we did this.

Josh Hadley 00:32:11  What did we learn from it? How do I internalize that? And how do I recognize this pattern in the future? That is what your biggest asset is right now as a leader. So I hope you found value in this episode. If you did, please share it with your mastermind group. Share it with another operator who needs to hear the same message. And until next time, good luck out there.