Gathering information and making quick decisions are at the core of management. Entrepreneurial companies welcome new ideas. But as the companies grow, they may be less accepting of initiatives that challenge the status-quo thinking. Status-quo thinking, also called a “company culture,” can be harmful. That’s because it’s really “groupthink,” a barrier to new and better ideas.
Groupthink occurs when the desire for harmony or conformity in the group results in dysfunctional decision-making. Group members try to minimize conflict and reach consensus without critically evaluating alternative viewpoints. Indeed, they can actively suppress dissenting viewpoints and isolate themselves from outside influences.
Avoiding groupthink is especially critical during periods of growth, when parts of the company are evolving at different rates and when lost opportunities or missteps can be devastating.
A cautionary example comes from a source we in business wouldn’t expect: the U.S. national-security apparatus.
I have studied how national intelligence-gathering and military and security decision-making have evolved in the past 15 years. I came to understand that flaws in making rapid decisions are applicable to businesses that are growing and changing.
In his book The Head Game: High Efficiency Analytic Decision-making and the Art of Solving Complex Problems Quickly, ex-CIA official Philip Mudd discusses failures in the agency related to information-gathering and decision-making. He cites as an example the agency’s seeing fundraising as a pretty good indication of a terrorist group’s likelihood of carrying out future attacks. However, by focusing primarily on fundraising, the CIA ignored a more acute problem of fighters being recruited. Fundraising and recruitment were not closely related at all, he writes. Making poor assumptions or asking the wrong questions narrowed the agency’s understanding of a situation and left it unprepared to detect activity that indicated a terrorist attack being planned against a government target abroad – one that was carried out but could have been prevented.
When faced with an ocean of information or apparently conflicting data, he writes, several key questions need to be asked:
- What is the problem?
- What are the “drivers” − the important characteristics that define the problem?
- How will performance be measured?
- What data will be collected in relation to the defined problem?
- What important information is missing?
The last question is most important. It’s the one managers tend to ignore, but it’s crucial because 1) we tend to overestimate what we know and 2) we often weigh information based on “availability bias”, that is we tend to consider information we know and weight it heavily, as opposed to leaving room in the decision process for what we do not know. The notion of asking oneself what is not known about a problem can lead to a completely different decision-making path. This was articulated a decade ago by then-Secretary of Defense Donald Rumsfeld as “unknown unknowns,” which I believe poses the biggest challenge for decision makers in many company situations, including growth.
Mudd’s remedy is to bring in a fresh team of renegade thinkers (or a reputable consultant – hint, hint) who will purposefully challenge prevailing ideas. To get to “unknown unknowns” (assuming that they are knowable in principle, if not in practice), thinking needs to come from outside conventional boundaries. This means listening carefully to the outsiders’ questions and challenges, and probing their thoughts instead of defending one’s own point of view. I would go a step further and say that after bringing in fresh eyes, a company should prove the outsiders’ challenge to be correct, instead of attempting to refute it.
Admitting that your assumptions may not be appropriate – and especially saying, “I don’t know” – are first steps in correcting the decision-making process. I implemented this in the 1990s when I hired new staff. I told them, “I am the boss, but I am wrong at least half of the time – but I don’t know which half! It is your job to tell me when I am right and wrong.” I did that to prevent their descent into groupthink in which everyone becomes conditioned to think the same way and not let creative thinking influence group decision-making.
That approach didn’t always work, but it was a start.