Authors Cass Sunstein and Reid Hastie have put together an excellent and readable taxonomy of the “bugs” that can afflict group decision making and cause groups to blunder in their book Wiser.
In the first part of this blog I discussed their dissection of the causes of group decision making failure.
The book carries a number of actionable insights into how to improve group decision making for the better:
Men out-talk women two to one in jury deliberations, the same happens in companies. Leaders and other high-status member of groups will exert a lot of influence, they can do the group a favour by remaining silent and indicating a willingness to hear all of the uniquely held information. That helps overcome one of the main issues identified with groupthink – self silencing which leads to a failure to share critical information.
Rather than prizing consensus, give social reward to new and competing information.
Information aggregation becomes more likely with roles, as each member knows that the others have something to contribute, a division of labour in examining a problem will make hidden profiles less likely.
“If a new CEO came in, what would they do?”
It has become commonly thought that devil’s advocacy or can help get past groupthink influences. The authors are torn on this point. Devil’s advocacy as an idea is trying to formalize the commitment to expressing differing viewpoints (which is a good thing). Those assuming the devil’s advocate role are able to avoid the social pressure to agree. However the authors believe evidence is split on this – there is a difference between authentic dissent and a formal requirement for an assigned devil’s advocacy, who may be arbitrarily assigned and simply “acting out a role”. For this to work the devil’s advocate has to actually mean what they are saying.
An upgrade to devil’s advocacy, which has a greater chance of working is to get an entire team to work on a contrarian viewpoint, with the aim of defeating the primary team’s plan to execute a mission. so called, “red-teaming”.
This is a formal approach to aggregating individual views. It proceeds in a number of rounds. First round votes (or estimates) are taken, in complete anonymity. The second round estimates must all fall within the 25th – 75th percentile of the first round estimates. This process is repeated until the group converges on a single estimate. It’s an averaging process, but one that allows for a single stubborn (or convicted) group member to influence the final outcome a lot more than a simple average.
The qualities that make a good identification process, particularly diverse and divergent thinking, are very different to a selection process which needs to favour convergent thinking. All too often these steps can be compressed together, making it difficult to juggle the requirements for both divergent and convergent thinking.
I found this section particularly interesting and relevant!
A few tips on how best to use experts:
Specifically for investment advice this points toward asking the questions
“What other strategies were considered, but ultimately didn’t quite make it into this advice?”
“Is this advice the work of one, or many, experts?
was this advice produced in an environment of challenge among experts, how were the different expert inputs incorporated and weighted (process)?
I for one will certainly be taking away a few of these insights and trying to apply them more consistently.
What do you think is the most helpful?
I’m sure you can picture the scene. A group sits down to make a critically important decision. Much discussion follows. One person after another lays out their views, lots of points are made. There are some clear areas of agreement. Nods all round. The answer starts to become clear. With a few changes a consensus develops. The decision is made. Everyone feels good, confident. this is definitely the right decision. No doubt. We all agree.
But is it?
Many people will have experienced or heard about situations where things didn’t quite go to plan and it transpired the group blundered. The term groupthink has become relatively well know.
This excellent book written by Cass Sunstein and Reid Hastie starts with a simple observation and a simple question: In many fields we endow groups of people with the authority or responsibility to make key decisions.
Do groups usually correct individual mistakes?
The simple answer is that they do not, and they can even amplify mistakes. This basic insight has great relevant to pension funds, investment committees and all sorts of other groups tasked with making meaningful decisions in complex domains.
In this highly readable book the authors take us through a quick tour of the taxonomy of “bugs” within group decision making, however their approach is balanced – also laying out the ways in which groups might be thought to do better than individuals, and the circumstances in which they can.
Understanding how and why groups blunder is not staggeringly complex, but requires a focused and methodical examination of human nature and biases, with social influences playing a big role throughout. Unpacking some of the sources of group failure in this way starts to yield immediately actionable insights on how to correct for these issues. The authors also helpfully guide readers through a number of real-life experiments that support the points they make.
We as individuals use judgement heuristics (rules of thumb), and have biases. We can be overconfident and place too much weight on our own experience and opinions. These behavioural traits are well known on an individual level. When we get together to debate and make decisions in a group sense these can result in “garbage in garbage out”.
Individual confidence tends to increase after a group deliberation. Deliberative groups (those that deliberate before arriving at a view) can be overconfident and wrong, this can have serious consequences in government policy, corporate strategy and for institutional investors including pension funds (tasked with making the investment decisions for large pools of invested assets).
Surely groups ought to be:
Is there evidence that these dynamics function in practice?
In practice there are four key reasons why groups fail, and this is really the central insight of the whole book
Groups fail to successfully aggregate info shared by members, then focus on information that is widely shared by the members rather than that known by only one or two members
Groups become polarized: adopt a more extreme position than the average of the members pre-deliberation
Groups fall victim to decision making cascades. Whereby early opinions excessively influence direction of decision
Groups amplify the individual biases of group members
Let’s draw a distinction between different types of group and different types of problem:
Statistical v deliberative groups: statistical groups each independently contribute a point estimate of an unknown variable (eg, the temperature of a room). Deliberative groups discuss the answer to a particular problem. Most of the issues with groups occur with deliberative groups.
“Eureka” problems are ones where the true answer, once voiced is immediately obvious to the rest of the group (“why are manhole covers round?”). Problems with an outcome which is certain and measurable (eg the temperature of a room) are different to those where outcomes are uncertain and not immediately measurable (eg investment decisions).
It is clear that the decisions taken by investment committees and trustees frequently fall into the toughest category where group failures are most likely!
Groups often risk falling into the common knowledge trap – common information that is held by multiple group members is given more weight than it ought to be, and significant information held by only one or two members can be ignored.
Self-silencing is a big threat to effective group decision making.
There can often be social pressure or subtle penalties to speaking out, especially if what the individual has to say is jarring or disruptive. In practice this effect can depend on the self-confidence, and subtly on the status of the individual involved meaning that men, women, minorities and certain occupations will all experience this differently
Like minded groups, post deliberation can often get into a more extreme position than any of them started in pre-deliberation. This is most clearly visibile with respect to politiical affiliation. The authors cite interesting studies that show that groups of left-of-centre or right-of-centre individuals will tend to adopt more extreme positions post-deliberation than their average pre-deliberation, and will tend toward greater consensus in the more extreme position. Why does this happen?
Individual opinions can turn more extreme when corroborated by others, and confidence can also increase once an individual learns their view is shared by others. Social pressures/forces will cause members to adjust, at least slightly, to the dominant position.
Polarization doesn’t always lead away from the right answer of course, if the members of the group are individually leaning toward the right answer then the group polarization is likely to produce a decisive swing to the correct view. However groups badly blunder when they polarize toward an incorrect answer, becoming more confident in the incorrect answer in the process.
The human being is at root a social animal, language may well be the most subtle and engaging social mechanism in the animal kingdom – and we are wired to synchronise with other humans from birth. Hence what others do or say will influence what we do or say. What can easily happen is that subsequent speakers may defer to the opinion of earlier ones, and later speakers, hearing two or more people state the same belief may assume these beliefs were arrived at independently (and therefore have higher reliability). The authors describe an interesting experiment where subjects consistently make obviously false statistical judgements, being influenced by what earlier subjects stated.
If consensus is prized, and known to be prized, then self silencing is more likely.
Groups often amplify natural human biases such as availability (if something can be easily called to mind, it is considered more likely), representativeness (if someone superficially appears to fit a particular mould, we are likely to judge them as being more suitable) , framing and egocentric bias. The planning fallacy, overconfidence bias.
Why? Informational influences and social pressures are again at work.
Having understood the ways in which groups blunder, the authors guide us through ways we can make groups function better – I discuss this in part 2 here.
So this is about strategies and tactics to understand and get past I am right you are wrong type situations and get to better outcomes. Specifically I am going to address this through three vignettes.
But before we start I’d like to ask you to picture a recent example of a disagreement. I’m sure you can all picture a classic moment of disagreement. An entrenched position develops. Voices get raised. People get animated. Interrupt each other, give short, spikey answers.
We’ve all been there, either as protagonist or observer – does it lead to good outcomes?
Here’s a few reasons why it happens – innate human yearning for control from an early age, an inbuilt desire to be right, to “win”, to assert views. A sense of “ego”. Innate desire for relative status – especially in a knowledge world where status can often be measured by being right.
Add to that the difference between Open vs closed mindsets.
Bring in a bit of Overconfidence bias, it’s been shown that senior people, successful people tend to be overconfident, selection process bias to persuasive people with confident views.
A lot of combustible ingredients there! Not a surprise perhaps that these situations occur pretty often – and derail group decision making.
Can we unpack some of these disagreement de-railers and offer thoughts and strategies/tactics for addressing? That’s the aim of this short piece.
Distinction – at least three types of disagreement here …
As an aside, If you haven’t already read it – I recommend a great book on this – Principles by Ray Dalio (founder of Bridgewater, who many of you will have heard of). Really influenced my thinking on this point (and plus is just a fantastic book on life & work). He talks about the concept of being “radically open minded”. A genuine worry that you might not be seeing choices optimally. Suspend your judgement for a second and evaluate something through someone else’s eyes. Agree that you might be wrong.
Some great framing to try and force ourselves to adopt when we find ourselves in this situation “I don’t know much relative to what I need to know”. “help me understand how I may be wrong”. It’s a great framing, but it is hard! And it needs everyone to take that stance, definite role for a facilitator or chair here in promoting that kind of atmosphere. Everyone needs to get a little humble, agree to be as open minded as they possibly can be, and go through that process together of suspending judgement for a second and hold conflicting concepts in the mind for a little while, holding that tension there for a bit without jumping one way or the other (which is a hard thing to do).
A common example of this that we encounter internally is debates of expected returns on asset classes at our investment committee. We tend to have strong views and don’t agree. As you’ll know the number you use does matter for allocation purposes. But clearly it’s something you can debate all day long. You’d be surprised how animated and energetic people can get over the difference between 3% and 4%!
To characterise the argument – Pete might say “I think the expected return on equities ought to be 4% and not a penny less”. But I might say “No, Pete, you are wrong, you’re too overconfident – it should be 3% and not a basis point more”.
There’s a clear clash there and a real risk of “I’m right you are wrong” developing. We have got past this by using some of the strategies described above. What we find if we hold on to both views and pursue the ideas behind them is that Pete is worried that too low a number might lead to excessively high allocations to chase return targets, whereas I fear that too high a number would lead to a false sense of security. Both very valid positions, and by holding the tension there we’ve got to better outcomes, I believe.
Closed mindedness or what psychologists call an “emotional hijack” could be the real enemy here and we need to be on the watch out for those.
So you encounter an entrenched position from someone you suspect probably doesn’t see or understand the full picture. A common example of this we’ve encountered is debates on interest rates and hedging. A proposal is in the process of being rejected because of a logical-sounding but (in your view) flawed argument (“I am against hedging because I think the BoE will raise rates next month”).
In the moment temptation can be very strong to try and “win” through force of logic. But experience suggests trying to meet an entrenched position holder head on in that way doesn’t usually lead to good outcomes, if done too stridently it might even push other neutrals or people biased toward your point of view into the debate in support of them, especially if it looks like they are being patronised.
To help understand the opposing side here, I think it’s really important to say that we all experience mental pain when an event or person comes along to challenge a tightly-held idea. This can be especially so it if reveals a personal weakness on our part. It is especially tough for more closed-minded people to cope with this situation. Being aware of it in ourselves (and using cues as triggers to control behaviour) can help get more open-minded.
But if we’re observing someone else and we are picking up some or all of these cues/traits that emotional hijack or closed-mindedness is coming into play, it calls for some tactics.
Recognise that emotions are powerful in the moment and will almost certainly “hijack” logical thinking (research shows that the flow of blood to areas of the brain is physically hijacked and diverted, so you in the heat of an argument no-one has their full cognitive capabilities on-line).
“We disagree – that’s great!” or “good challenge” … it shows we have an important issue here that we need to spend time getting to the bottom of. Find out what is really true and
Plus it rewards, encourages, fosters dissenting voices (dissent is often a good thing – if done in the right way).
2. Agree on basics ….
Can we agree we are here to make the best decision we can?
Agree ground rules around process/structure – don’t block each other from speaking. 2 mins each uninterrupted to make case. Then each agree to play back your hearing of the other’s argument, to help internalize and demonstrate that you are listening.
What can we now both agree on?
What is the evidence in front of us? Be evidence based and encourage others to do the same,
Where are we trying to get to – is the goal agreed upon or is that a point of dispute?
What are our constraints – are those agreed on both sides.
A tactic we have found works well is to establish what you might call boundary conditions (“if we were fully funded, would you want to be hedged”).
3. Don’t expect to get a solution straight away
But don’t let the debate put the issue on hold for ever and kicked into “long grass”. Keep open dialogue going
Inject a little humour and levity if at all possible – can lighten the mood and diffuse any potential confrontational atmosphere which can keep things moving along. I’ve seen this done really well by certain board chairs at just the right moment (not detracting from the seriousness of the debate, but a well judged comment can lighten tone and relax people).
Consider compromise stances
Even if we can’t ultimately agree, how do we size the position, is there a timing compromise
Needless to say there are a huge variety of personality types, and of course this influences how we behave and react in a business context. I’ve become a big fan of the Deloitte Business Chemistry, and risk type compass is also something we’ve used. There are others (Hogan, Myers Briggs, Five factor, Gallup) They all give different helpful ways of looking at personality and, particularly how it impacts on the interactions we have with others. It helps understand ourselves and others, helps explains a large part of a lot of issues.
Understanding personality characterisations and the traits that arise from how individuals are “wired” helps takes away the individualisation, personalisation of the thing. Gives you a language to depersonalise (“you’re going all guardian on me again – help me here”). It’s a great vehicle for improving one’s own Self awareness.
Let’s take an example here. In the language of the Deloitte business chemistry framework- I’m a driver
hat means I thrive on making progress and getting things done, and can get impatient when I feel like I am getting “bogged down”. I can and do therefore often face objections from guardians who rightly often ask “show me more data or let’s stop for a second and think more deeply about this and what we are trying to do here”. Deep down I share their desire for logic, but I’m also silently screaming “let’s just get this done!”, as I perceive their requests for data or more debate as a “no”. Personality lens gives the option to depersonalise, increase self-awareness and recognise as a classic guardian/driver clash, which is much more helpful in moving forward.
I do see that a bit on trustee boards – often the chair might be a driver type personality, brought in perhaps to move forward and get things done, enact change. Many trustees are likely to take guardian viewpoint (indeed, the word trustee kind of invokes a sense of guardian). Can lead to clash. Also a role for consultant and other advisors in the personality mix. Important to understand.
So, to wrap
I’m right you are wrong situations, arise all the time for a bunch of reasons, but unlikely to lead to good outcomes.
Leave you with one thought: always try and aim for thoughtful disagreement.
Talked about three scenarios and some strategies and tactics to handle/navigate
Two well informed people with a genuine clash of ideas
Dealing with emotional hijack when we have two sides with different levels of expertise
Clashing personality types