A lot is said about the power of Teams and about consensus based decision-making. Working with more or less democratically organized teams seems to be the standard mode of operating in most companies.
How much is said about the danger of teams and the disadvantages of seeking consensus?
First of all, usually people talk about The Team, and: you are either in it, or you are not. So although a team suggests cooperation and inclusion, it also excludes a lot of people, who are not on The Team. The notion of having a team, deciding who’s on it, and making sure the team is successful seems over valued. The team should be a means to an end, such as implementing the company strategy, not an end in itself. In my experience teams are kept together for much too long, even when it has become clear that the team dynamics are not advantageous, and far too much energy is spent on fixing the team, rather than on fixing company issues. All energy is spent on off-sides, team meetings, assessments, external help, rather than on customers, the product and on growth.
This would perhaps all be worth it if teams would make better decisions than individuals, but this is arguably not the case. On the contrary.
How decision-making works
Some background on decision-making, from the must-read book by Nobel Prize winning author Kahneman: Thinking Fast and Slow. He won a Nobel Price in Economics, but Mr Kahneman is a psychologist and his research was on Decision-making. He is not optimistic about the quality of decision-making. In fact for most decisions the outcome is better if you have a monkey throw a dart at a dartboard to select an option. In particular he is fearsome of decisions made by experts or by teams.
In thinking in general, and in decision-making in particular we have two systems we can use.
System 1 operates automatically and quickly, with little or no effort and no sense of voluntary control. When system 1 gets into trouble it feeds system 2 with impressions, intuitions, intentions and feelings. System 1 has biases, has limited understanding of logic and statistics, and is lazy. It sometimes replaces difficult questions or choices by simpler ones, and easily jumps to conclusions.
System 2 allocates attention to the effortful and more complex mental activities that demand it. The operations of system 2 are often associated with the subjective experience of agency, choice and concentration. System 2 is also credited with the continuous monitoring of your own behavior – the control that keeps to polite and alert and it is the source of doubt and judgment.
Why teams lead to bad decisions
Biases are a major reason for bad judgement. And bias is strengthened in teams by Priming effects like Framing (presenting information in a certain way, Halo effects (the one who brings his point across first or most assertive is usually followed). Another form of bias that often causes disturbance in teams and is not easily controlled is “availability bias”: members of a team usually feel they have done more and contributed than their share, and also feel that the others are not adequately grateful of their individual contributions. When individuals are asked what their contribution has been, the total almost always exceeds 100%. Typical System 1 thinking. This system is heuristic (it works with “rules of thumb”). Only when system 2 is engaged with its focus on content and analytics a more realistic picture arises. Unfortunately this seldom happens in discussions. Or, as psychologist Jonathan Haidt said: “The emotional tail wags the rational dog”.
Another problem, where a team could add value, but usually does the opposite is: collecting and analyzing information. Instead of bringing all available information to the table, team members often feel reluctant to do so. Social pressure plays a role here, which leads to people to silence themselves because they fear the disparagement of powerful others. Synergy is usually an illusion. In fact, even when they would speak up, their influence would be limited: information held by all or most group members has a lot more influence than information held by one member. This is called “the common-knowledge effect”.
This is actually quite comforting for decision makers. It is only natural to build the best possible, coherent story with limited information available to you. With little information it is easier to construct a story that makes sense. The reason behind this: our almost unlimited ability to ignore our ignorance.
So we have bias, we have limited excess to information, and we overestimate what we know. As if that was not enough: we are naturally negative and resistant to change.
Negativity and loss aversion are purely human emotions, and they tend to win from positivity and curiosity. It is an evolutionary survival mechanism, and causes us to be driven more by the aversion of losses than to achieve goals. In a team this gets stronger and is reflected in goal-setting. Therefore goals will be set without much ambition: not achieving a goal is a loss, exceeding the goal is a win, but the aversion to the failure of not reaching the goal is much stronger than the desire to exceed it.
Funny example for golfers: after analyzing 2.5 millions puts by professional golf players it was discovered that putts to avoid a bogey were significantly more successful to putt to achieve a birdie.
In a team, this behavior leads to resistance to change. Plans for change or reform almost always produce many winners and some losers while achieving an overall improvement. However, potential losers will be more active and determined that potential winners. The outcome will be biased in their favor and inevitably more expensive and less effective than initially planned.
The conclusion, as we can also read in Cass Sunstein’s book Wiser: Groups usually do not correct individual mistakes, as is the general consensus, but actually amplify those mistakes.
How to fix it
So is there no hope? Of course there is. The alternative is avoiding teams as a goal, but organizing knowledgeable, committed and responsible individuals in changing teams or ecosystems with some simple rules and a clear process for collecting and assessing information.
If people in organizations, as animals in nature acknowledge their interdependency and take responsibility, adaptation to changing environments is enabled. Divergent perspectives will be respected and valued. Conflicting opinions will be seen as options based on data and members’ individual knowledge, to be evaluated and ultimately decisions will be by those who have been authorized to do so. To create such an environment you have to pay attention to several rules:
Rule 1. Assigning authority and taking responsibility.
The accountable leader will have to surround himself with knowledgeable people, and ask who will take responsibility for what. To the individual who is responsible for something authorization needs to be assigned. It might help to agree that these authorizations are by definition temporary. Individuals should not become attached to them, or feel they own them. Always the starting point should be: what is best for the organization at a certain point in time.Compare this to a national soccer team. Even if you are selected to join the team, you don’t know if you will play. And if you play, you cannot be sure of your position on the field. It all depends on fitness for the job, on the adversary, on the available alternatives and on a lot of other circumstances. But everyone’s goal is to bring the cup home.
Rule 2. Differences
Leaders create a safe space to disagree by his own behavior and by making explicit the expectation that conflicts can be surfaced and resolved. Teams need to commit to listening with respect, debating and deciding. This needs some ground rules that need to be enforced. One of them is to tolerate the discomfort of divergent and passionate viewpoints, despite the tension it may raise for the team. Another one is that ultimately agreement between all is not necessary. The responsible person can, or maybe should say: “Thank you all for your input and for the discussion. I will let you know what I have decided.” After that the whole team must commit to executing the decision as best they can.
A key opportunity for interdependence exists if team members support each other’s goals, and seek each other’s expertise and perspectives. Feedback, especially on behavior should be given directly to anyone and by anyone. Complaining to others afterwards, creating kongsi’s or lobbying for support in upcoming meetings is undesirable behavior and should not be tolerated.
Rule 4. Engage others
Teams can become insular and self-referential. It might be necessary for the leader to re-assign responsibilities, swap team members, encourage an inward-looking team to ask stakeholders for input and alignment on both operational and strategic matters. This can be done by inviting other stakeholders or subject matter experts to attend meetings, exchange information or just listen in.
Kahneman believes in rule based decision-making. Select the most important variables and come up with a simple algorithm, and score the variables, based on collected data. An example: the apgar score for newborns. Selection of candidates, chosing stocks to pick? Follow the best algorithm you can come up with and refrain from sticking to your first impression or your intuition.
The best way to deal with coming to new ideas and new solutions is to create a two stage process: first collect as much information as you can, preferably anonymous, or brainstorm for new solutions. In the second stage critically select the best solution from those identified in the first stage.
And finally: if there are people with irrational or destructive behavior and personal motives, no ecosystem, no rules and no process will help you. You will have to confront them and ultimately remove them.