Noted General Motors chairman Alfred P. Sloan would refuse to close an issue at a meeting if everyone was in agreement. He would propose returning the following meeting ‘to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.’
Sound decision making requires debate. Debate brings clarification of complex questions and data. Business leaders need to support open and spirited debate, encouraging discussion of various alternatives which are supported by data. They should feel comfortable challenging colleagues and their founding team members, questioning their assumptions and pointing out gaps in the data or knowledge as well as flaws in ideas that are put forward. The end result is a better decision and a decision that individuals are committed to.
But dissent and heated debate often make individuals feel uncomfortable. It feels so much better to go along with the views or opinions of colleagues that one likes and respects. Individuals are often reluctant ‘to rock the boat’ and hence keep important information from those who need to hear it.
Individuals may have seen their colleagues marginalized or shut out from meetings after voicing dissenting opinions. This suppresses debate. The result is predictable — mission critical information that is required for making intelligent decisions is not factored in. This preference for consensus and harmonious relationships comes at a steep price. This phenomenon is known as groupthink and it is a silent killer of good decision-making.
Teams that fall victim to groupthink develop the illusion that they are unanimous in their thinking (silence is perceived as evidence of consensus). This illusion is associated with a second illusion: that nothing bad can happen to them (possible weaknesses have been suppressed). These illusions blind teams to the warning signs of potential danger and desensitize them to anyone within or outside the team who might raise concerns about team decisions or actions. This leads to collective over-confidence that denies reality.
A recent Economist article linked Toyota’s problems around the massive safety recall and its mishandling of the ongoing crisis to groupthink. It cited the lack of an outside perspective on Toyota’s Board of Directors as a contributing factor. A Businessweek article explained how General Motor’s head-in-the-sand reactions to criticisms led to insularity that contributed to the near-downfall of the organization.
Research that I am conducting with colleagues Jeffrey Gandz, Mary Crossan, Carol Stephenson, Stephen Sapp and Daina Mazutis focuses on what went wrong with leadership that contributed to the 2008-2009 financial crisis and the devastation to people, organizations and national economies that followed it.
Groupthink is one of several factors that CEOs and executives highlight as contributing to the crisis. There were people inside banks who sounded cautionary alarms but whose views were rejected as non-entrepreneurial or too risk averse.
Many directors joined the boards of financial institutions in simpler times, long before the days of collateralized debt obligations, structured investment vehicles, credit swaps, and other complex financial tools. Few directors stood up and said, ‘Stop! I don’t understand these things. I won’t agree to them until I do.’ Why not? Perhaps they saw dissenters and critics being marginalized and shut out. Financial institutions have since found that eliminating contrasting points of view cuts their decision-makers off from their best chance of spotting and correcting problems.
My own executive teaching shows the dysfunctional processes associated with groupthink are all too real and something that many leaders struggle with.
Business leaders can take a number of steps to avoid falling victim to groupthink.
2. Create a safe environment for speaking up. Individuals should be able to challenge prevailing opinions without being concerned about being marginalized or penalized.
3. Set the ‘right’ norms in the team. The focus should be on making the best possible decision for the company rather than creating a win — lose orientation among team members. ‘It’s not who’s right; it’s about what’s right.’ Highlight discrepancies as puzzles. Foster open sharing of information. Those who violate the agreed-upon norms should be called on their behaviour.
4. Spend time getting the right team together. Incorporate capable people with diverse ideas and backgrounds. Go out of the way to seek outside points of views and expertise.
5. Play devil’s advocate to challenge the team’s assumptions and rationalizations.
Gerard Seijts is an associate professor of organizational behaviour at the Richard Ivey School of Business, University of Western Ontario.