Posted on

Team Decision Making

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


Managers often need to reach decisions as a part of a team; either as:

  • a member of a management team
  • a facilitator of their own team

In both cases, it will serve you well to understand some of the do’s and don’ts of team decision-making*.

Group Think

In the 1970s, the social psychologist Irving Janis examined how groups make decisions. He found that the group’s dynamic often inhibits exploration of alternatives. People find disagreement uncomfortable, so the group seeks consensus before it is properly ready. As the group approaches consensus, dissenting voices are rejected (and, indeed, often self-censored). Janis said:

‘Concurrence-seeking becomes so dominant in a cohesive group that it
tends to over-ride realistic appraisal of alternative courses of action.’

When we fall prey to Group Think, decisions tend to be based on ‘what we all know’ – members feel inhibited from challenging the consensus and relevant information, ideas, challenges are not fully introduced.

The group tends to a higher collective confidence in a decision than individuals have in the same decision made individually. Groups tend to endorse higher risk decisions than the individuals would – perhaps due to the degree of confidence resulting in group members agreeing to decisions that they would not make as individuals. This is called ‘Risky Shift’.

Other features of Poor Group Decision-Making

People with more extreme positions are more likely than others to have clear arguments supporting their positions and are also most likely to voice them. This enhances risky shift.

The order in which people speak can also affect the course of a discussion. Earlier comments are more influential in framing the discussion and moulding opinions.

Once people have expressed an opinion in a group, it can be hard, psychologically, for them to change their mind.

Charismatic, authoritative and trusted individuals can also skew the debate around their perspectives – which will not always be objective or ‘right’.

Finally, it takes time for a group to discuss a topic and time is often at a premium. There will be pressure to curtail discussion and move to a decision.

Towards Better Group Decisions

  1. Start with a diverse team.
  2. Don’t let leaders, experts or charismatic individuals state their opinions or preference up front
  3. Start with a round robin of facts, data and evidence. Follow up with another round robin of comments, questions and interpretations of that evidence. This forms a solid base for discussions.
  4. If you must take a vote, put it off until after discussion and then ideally, do a secret ballot to establish the balance.
  5. Appoint a devil’s advocate to find flaws in data and arguments.
  6. Before a decision is finalised, ask everyone to take the position of a critical evaluator and look for errors, flaws and risks.
  7. Divide the team into subgroups to discuss the issues, and have them debate the decision.
  8. Invite outsiders into the team to create greater diversity of thinking and overcome prejudices and confirmation bias.
  9. Give all team members equal access to raw data, so they can reanalyse it for themselves.
  10. Facilitate the discussion to ensure every voice is heard and respected – even the least senior and least forceful members of the group. If they deserve their place in the group, consider their perspectives to be of equal value.

Further Reading

  1. The Decision-making Pocketbook
  2. The Wisdom of Crowds

* Grammatical Note

To apostrophise do’s or not?

  • In favour of not apostrophising is that it is neither a contraction nor a possessive term, suggesting that there is no good grammatical reason for introducing an apostrophe
  • In favour of the apostrophe is the core function of punctuation to improve readability. The apostrophe stops it being dos and don’ts.

We sometimes forget that grammatical and punctuation ‘rules’ evolved to codify standard usages, but that language is fluid and grammar must serve the primary purpose of aiding communication.

By the way, you’ll see that I did not apostrophise 1970s.

If you think I should either have written dos, or found an alternative (thus subordinating words and meaning to style and correctness)… Sorry.

Share this:
Posted on

Decision Making

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics This is part of an extended course in management.


In understanding decision-making, there are three key things to focus on:

  1. Using a structured process
  2. The role of intuition, gut instinct and hunches
  3. The effects of bias and automatic thinking

Let’s look at each of these in turn.

Structured Decision Making Process

… like the example below.

Structured Decision Process

One of the most important choices in your decision process will be whether to go for an adversarial process of setting the options against one another – perhaps even having advocates for each, competing with one another to win the decision – or to go for a process of inquiry, learning as much as you can before assessing the options.

Intuition

Although Malcolm Gladwell received a lot of attention for his book Blink, his work leans heavily on the research by Gary Klein and his books, The Power of Intuition and the more technical Sources of Power are first rate.  Klein shows how, in domains that are very complex and in which you have extensive experience, your intuition can quickly get you to the right understanding, well ahead of your ability to explain why or how you reached the conclusion you did.  But, if you don’t have sufficient experience, then your hunches are likely to be wrong, due to the existence of…

Bias and Automatic Thinking

Two psychologists, Daniel Kahnemann and Amos Tversky, were responsible for overthrowing the crude assumption that economics is based on rational decisions.  In fact, they showed that many decisions are a result of automatic thinking and biases.  The automatic thinking is a short cut that works well in the domains in which humans evolved, but leads frequently to wrong answers in a modern world context.  An example is the ‘horns and halo effect’ and another is our bias towards noticing examples that confirm what we believe to be true, whilst being blind to counter examples.  Daniel Kahnemann wrote the wonderful ‘Thinking, Fast and Slow’ to summarise a life’s research and it is, without a doubt, one of the most important and stimulating reads of the last few years.

Further Reading

Share this:
Posted on

Sunk Cost and the Sunk Cost Fallacy

Sunk Cost

‘You’ve bought it now. The money’s gone.’ That snarky comment made by thousands of parents (mine included) to their reckless child encapsulates the meaning of sunk cost. Once you met the cost, it’s gone: sunk. You’ve sunk it into the investment for good or for ill.

This, then, could be the shortest Big Ideas article yet. Sunk Cost is a familiar and easy concept.

Continue reading Sunk Cost and the Sunk Cost Fallacy

Share this:
Posted on

Governance: Steering the Good Ship

Governance

GovernanceIn a world filled with temptations to take shortcuts, governance is our defence. It provides us with the direction and control that maintain the standards that serve the many against the carelessness or abuses of those with power.

It feels to this observer that never in my lifetime has the need for governance been as great as it is now.

Continue reading Governance: Steering the Good Ship

Share this:
Posted on

Key Performance Indicators: KPIs

Key Performance Indicators - KPIs

Key Performance Indicators - KPIsKey Performance Indicators – or KPIs – stem from an insight that is most often attributed to Peter Drucker, in his 1954 book titled, ‘The Practice of Management’:

‘What gets measured gets managed’

That attribution may be contested, but the central assertion seems pretty sound. If your organisation measures performance against a specific metric, then its managers feel an incentive to manage their parts of the business, so that they perform well against that metric. KPIs are nothing more nor less than the key – or most valuable – metrics.

Continue reading Key Performance Indicators: KPIs

Share this:
Posted on

Behavioural Economics: You aren’t as Rational as You Think

Behavioural Economics

Behavioural EconomicsIt turns out that you aren’t as rational as you may have thought. So, traditional economic theories that assume you are, are… well, flawed. We need an approach that accounts for self-interest and lazy mental short-cuts. Enter Behavioural Economics.

We’ve already told the foundation story of Behavioural Economics in our Management Thinkers series. There we looked at the two men who received Nobel Prizes in Economics for their work in the field:

  1. Daniel Kahneman won his in 2002
  2. Richard Thaler won his in 2017

Continue reading Behavioural Economics: You aren’t as Rational as You Think

Share this:
Posted on

Cognitive Bias – Getting it Wrong

Cognitive Bias

Cognitive BiasYour brain is wired to think fast. So, to do this, it needs to take shortcuts, that psychologists call heuristics. But these shortcuts don’t always give the right answer. They give rise to cognitive bias.

Cognitive bias is the result of the shortcuts. If every car door you’ve ever encountered opens outwards, it’s a good bet that the next one you encounter will too. That’s a bias in your assumptions. Usually, it serves you well. One day, it may let you down.

But the cognitive biases that we need to worry about are those that are baked into our mental operating system. We make the mistakes without realising it. They lead to bad decisions – sometimes to catastrophe.

Continue reading Cognitive Bias – Getting it Wrong

Share this:
Posted on

Systems Thinking

Systems Thinking

Systems ThinkingSystems thinking is a big idea that’s remarkably… simple.

It’s a simple idea about complex phenomena. And the principle virtue of systems thinking is that it reminds us that the real world is far from simple.

Indeed, when we try to apply simple solutions to complex problems, the solution tends to fail: often spectacularly. And it’s systems thinking that points us in the right direction. We need to think about the whole messy, complex, inter-connected system, if we are to have any chance of finding a solution that makes our problem better.

If only politicians could grasp this simple fact.

Continue reading Systems Thinking

Share this:
Posted on

Holacracy: Circles within Circles

Holacracy

HolacracyFor hundreds of years, there has been little to challenge traditional hierarchies for their ability to organise at scale. Holacracy is doing just that.

It’s a form of Adhocracy, which we covered in an earlier article. But, whilst we are way past ‘peak adhocracy’, it seems that holacracy is is thriving.

Holacracy is a modern attempt to reform traditional hierarchies. It keeps the aspect of senior level overviews and subordinate focus. But it gives a far greater autonomy to individuals, and a more substantial decision authority to small teams at the focus of operations and change.

Continue reading Holacracy: Circles within Circles

Share this:
Posted on

The Pareto Principle | The 80-20 Rule

The Pareto Principle | The 80-20 Rule

The Pareto Principle | The 80-20 RuleThe Pareto Principle – also known as the ’80-20 Rule’ – is one of those ideas that crops up in many places. It is ubiquitous because it is an expression of a general principle of nature. It is an example of a power law. Extremely long rivers are rare. Small ones are very common. A small number of words appear frequently within a language, whilst there are very many words that we hardly use at all.

But what makes the Pareto Principle a valuable version of this phenomenon is that it is easy to articulate and understand. And it is therefore easy for managers to apply, to get better results. Consequently, since Joseph Juran rediscovered and named the idea in the 1930s, it has become an indispensable snippet of knowledge, for anyone in management.

Continue reading The Pareto Principle | The 80-20 Rule

Share this: