The person with great judgment but average intelligence will usually beat the person with great intelligence but average judgment - James Clear.
In an age of infinite leverage, judgement is the most important skill. Leverage is a force multiplier for your judgment - Naval.
Get wisdom; develop good judgment. Don’t forget my words or turn away from them. Don’t turn your back on wisdom, for she will protect you. Love her, and she will guard you. Getting wisdom is the wisest thing you can do! And whatever else you do, develop good judgment. If you prize wisdom, she will make you great. Embrace her, and she will honor you. She will place a lovely wreath on your head; she will present you with a beautiful crown.” Prov. 4:5-5 NLT.
Judgment is ability to take many factors into consideration and consistently make sound decisions that have great long term benefits. I have done some study on the idea of good judgement. I believe that there are 4 important foundations for good judgment: values, emotional intelligence, situational awareness (understanding both facts & nuances in a context) and mental models. And unlike IQ which stops developing pretty early in life, these can be changed, learned and unlearned. This means that even if for example, you have great situational awareness, values and mental models but consistently let your emotions cloud your decision making, you'd have bad judgment.
Values are fundamental beliefs that guide attitudes and action. Very generally, it refers to thinking about issues concerning what is right or wrong, good or bad, or what might or might not be valuable. Your values are not what you say they are, they are revealed by your actions. Values are standards or ideals with which we evaluate actions, people, things, or situations. There are 3 kinds of values:
Personal Values: Our sense of what makes us fulfilled and happy. What we want out of life.
Moral Values: Our sense of what's morally right or wrong.
Aesthetic values: Our sense of what's beautiful or arty.
Emotional Intelligence is about how you are able to recognize and manage your emotions effectively. And recognize, understand and influence the emotions of others. There are four kinds of emotional intelligence:
Self Management: The ability to control impulsive feelings and behaviors, effectively manage your emotions
Self awareness: You are able to recognize your strengths, weaknesses and have self confidence. You understand your own emotions and how they affect you.
Social Awareness: You have empathy. You can understand the emotional needs of others, pick cues, understand group power dynamics and feel comfortable in social settings.
Relationship Management: You can maintain good relationships, communicate clearly, lead others, work effectively in a team and manage conflict.
Situational awareness is about knowing what's going on in the environment. It is about appreciating the current dynamics and state of a system and being able to anticipate future change. There is a lot of emphasis on SA in military, healthcare and aviation settings. SA means that your perception is based on the facts of a matter not on assumptions about the facts of a matter. Know the facts, question all assumptions, till the facts are revealed. SA grows by experience.
This basic definition has been extended by Dominguez et al. (1994)[2], who state that SA needs to include the following four specific elements:
extracting information from the environment;
integrating this information with relevant internal knowledge to create a mental picture of the current situation;
using this picture to direct further perceptual exploration in a continual perceptual cycle; and
anticipating future events.
A mental model is a way of seeing the world. It is an internal representation of reality and can help shape behavior and as a process to anticipate events, make decisions and solve problems.
You can’t really know anything if you just remember isolated facts and try and bang ’em back. If the facts don’t hang together on a latticework of theory, you don’t have them in a usable form. You’ve got to have models in your head. And you’ve got to array your experience both vicarious and direct on this latticework of models - Charlie Munger
You have to learn all the big ideas in the key disciplines in a way that they’re in a mental latticework in your head and you automatically use them for the rest of your life. – Charlie Munger
The image of the world around us, which we carry in our head, is just a model. Nobody imagines all the world, government or country. He has only selected concepts, and relationships between them, and uses those to represent the real system. – Jay Wright Forrester
Munger has adopted an approach to business and life that he refers to as worldly wisdom. Munger believes that by using a range of different models from many different disciplines—psychology, history, mathematics, physics, philosophy, biology, and so on—a person can use the combined output of the synthesis to produce something that has more value than the sum of its parts.” - Tren Griffin
It is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles, ie the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang on to - Elon Musk
In other words, Charlie was advocating that we learn the most useful ideas from a wide range of disciplines and use them together in decision making, problem solving etc. This is the way to avoid the 'Man with the hammer syndrome' where "to a man with a hammer every problem looks like a nail". You have to avoid getting stuck in only one way of seeing things.
My father is a physicist and when I was a teenager, I noticed how he would extrapolate physics concepts to a lot of contexts outside the subject and use them to explain stuff about faith, economics, business, career, human relationships etc. He believed physics was key to worldly wisdom. In a way, he was my Munger. The lattice work from diverse disciplines empowers you and extract interdisciplinary models of thinking. You equip your toolbox with aa lot more than a hammer and have a good assortment of tools to use depending on the context. That's good judgment.