Behavioral science has illuminated all sorts of biases that plague our decision making, individually or in groups. Since those can be subtle, they are hard to counter. Indeed, research shows that it is very difficult to eliminate any individual’s bias, according to Olivier Sibony, an associate professor at HEC Paris. He says we need to improve the decision-making practices of the organization by involving diverse pools of people in order to reduce the effects of bias of one or a few individuals.
That approach was exemplified in the decisions by President John F. Kennedy on the Bay of Pigs invasion and the Cuban Missile Crisis in the early 1960s. He and his team of advisers flubbed the first big decision but aced the second by changing their deliberation processes. Amongst other things, the president withdrew from the discussions at times to allow more wide-ranging thinking; he divided key officials into two groups that pursued alternative options and which critiqued each other’s memos; and his two closest confidants, Robert Kennedy and Theodore Sorenson, were assigned to play the role of devil’s advocates. It was this system that is credited with the success.
Consultants Torben Emmerling and Duncan Rooders studied behavioural sciences research and came up with seven steps to improve your group decision making, which they shared in Harvard Business Review.
Keep the group small, especially when you need to make an important decision. Bring a diverse group together. Appoint a devil’s advocate. Collect opinions independently. Provide a safe space to speak up. Don’t rely too much on experts. And share collective responsibility for the outcome. On that latter point they recommend asking every team member to sign a joint responsibility statement at the outset, leading to a more balanced distribution of power and a more open exchange of ideas.
Executive coach Shelley Row highlights the importance of a broad range of information sources rather than just talking to those with whom you agree. She points to four groups of people you must canvass: your closest colleagues, your biggest critics, those with fringe opinions, and those outside everyone’s circle. On her blog she notes this will require more energy – it can be exhausting – but it is critically important to robust decision-making.
Prof. Sibony’s book You’re About to Make a Terrible Mistake argues that you need to analyze less in making big decisions and discuss more. “When the time comes to decide we are so focused on the rational, quantifiable, objective aspects of the project that we simply do not realize the impact of collaboration and process,” he writes.
Looking at investment decisions, he found four questions separate the best decisions from the worst ones: Did you have an explicit discussion about the risks and uncertainties associated with the investment proposal? In the discussion of the proposal, were points of views that contradicted those of the senior leaders expressed? Did you deliberately seek out information that would contradict the investment thesis, instead of only focusing on data that supports it? Finally, were the criteria for approval predefined and transparent for all those taking part in the discussion?
He offers 40 techniques to improve your decision-making processes, including:
- Ensure sufficient cognitive diversity: Diverse backgrounds are important but at a deeper level keep in mind that people who have worked together a long time start developing the same hypotheses and believe the same stories. Seek different viewpoints.
- Make time: As with cognitive diversity he notes this is obvious in principle but often ignored in practice: “Engaging in dialogue takes longer than obtaining superficial agreement,” he says, particularly if people’s backgrounds are different.
- Put dialogue on the agenda: Executives believe that every meeting must lead to decisions and action items. The flip side, he notes, is that any meeting that ends without a decision is considered a failure. “There is a time to discuss and a time to decide. An essential prerequisite for dialogue is to know when we’re doing one and when we’re doing the other,” he writes.
- Limit the use of PowerPoint: It just freezes discussion and puts people to sleep.
- Ban misleading analogies: You need to contain analogies that seduce everyone into believing organizational myths and stories. He points to a venture capital firm that does not allow an investment candidate to be referred to as “the next WhatsApp” or “the Uber of the industry.”
- Discourage hasty conclusions: That same venture capitalist firm does not allow anyone to respond immediately after a pitch. The committee members go their separate ways for a period to consider the discussions, even if that defies our notion of productive meetings.
- Encourage nuanced viewpoints: Another venture capitalist, Kleiner Perkins’s Randy Komisar, asks participants for a “balance sheet” of thoughts – what’s good and what’s bad about a proposal – before giving their judgment.
- Use mandatory alternatives: One powerful, little-used technique is to require anyone who wants to propose a project to bring not one, but two ideas to a meeting, creating additional options.
- Apply the vanishing options test: Ask what you would do if the options on the table became impossible. That forces additional ideas to be considered.
Decision making can become routine. It needs a system, but one that forces everyone out of their comfort seats.
- McKinsey & Co research found executives on average spend almost 40 per cent of their time making decisions, much of it in meetings. The four common failure patterns are not making a decision, making a poor decision, making a slow decision, or making a low-commitment decision.
- Annie Duke, author of How to Decide, says her favourite concept from the book is very simple: If you want somebody’s opinion, don’t tell them your opinion first.
- The Phoenix Encounter Method by three management professors at Insead and globe-trotting counsellor to CEOs Ram Charan shows how to stress test your business over several days on an “encounter battlefield” in which you imagine how someone might attack your vulnerable points. It includes a “completely-opposite-viewpoints debate,” a strategic dialogue that forces you to grapple with opposing perspectives.
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