Groupthink makes bad decisions
There are always consequences to decisions, especially bad ones; the decision by British Airways to re-brand, and by Coca-Cola to change their original product to New Coke are good examples. More recently, 'virtue signalling' by Nike to use a transgender influencer to advertise their sports bras and leggings and for Budweiser to do the same in their advertising, have had serious consequences for both companies.
These examples were all bad decisions that had negative effects on the brand image, sales and share value. But how did these bad decisions come about?
In any business, it is all too easy to become blinkered in outlook and to believe your own view to the exclusion of others. For the commercial manager, it is essential to be open-minded to alternative possibilities, in order not to be caught out by the unexpected or to make wrong decisions.
As businesses become larger, they evolve, so that a corporate culture, mentality and team spirit develop and while this is in general a good thing, it also brings the potential danger of the phenomenon known as 'groupthink'.
Group Think is the term given to a group of people who collectively tend to like and use the same assumptions and thus hold the same collective opinions. Groupthink manifests itself with collective answers to situations without considering alternative solutions or recognising changed conditions.
The Cambridge Dictionary defines groupthink as: "The process in which bad decisions are made by a group because its members do not want to express opinions, suggest new ideas, etc. that others may disagree with."
Groupthink is plainly visible when governments enact and continue with policies that are plainly failing, or when companies adopt foolish strategies that produce massive losses.
While team building is good for promoting and delivering business objectives, close-knit teams have the danger of groupthink. Where groupthink develops there is a tendency to develop assumptions that are both wrong and without foundation. What everyone in the team knows to be true, frequently isn’t, and may be a false and outdated assumption.
For the commercial manager, responsible for input into the corporate plan and for the delivery of income to meet the corporate plan objectives, being aware of groupthink and its dangers is especially important, in order to counter its potential effects.
Since first described by Alex Osborn in the 1950’s Brain Storming has been considered an excellent way to generate ideas. However, more recent research tends to show that people working in groups actually produce fewer ideas that are innovative and actionable, than would have been produced had they worked individually and alone.
As soon as one person states a potential solution, it tends to influence the memory of everyone else in the group, in ways that make them think about the problem in a similar manner, which is the basis of Group Think. To counter this problem, there are a number of actions that the commercial manager can implement.
- Build a critical thinking culture: When people stay silent in group discussion, they do so because they think that their reputations will suffer and that they will be punished, not rewarded, for disclosing information that differs from the majority’s position.
- Initially decline to express an opinion: Commercial managers should decline to state a firm view at the start of any discussion, in order to allow others to share their thoughts more freely. By emphasizing their desire to hear all points of view, including dissenting opinions commercial managers are more likely to learn what they need to know. Numerous studies suggest that a group’s opinions are frequently swayed by information that is common to most or all their members regardless of whether it is right or wrong.
- Concentrate on group, not individual, success: Group members often fail to disclose what they know because they believe they won’t personally benefit from speaking up. People are far more likely to disclose what they know when they feel that they have everything to gain from a correct group decision. But if group members concentrate on their own prospects, rather than that of the group, the group is far more likely to make an incorrect decision.
- Give group members distinct roles: If a commercial manager wants to know what group members are thinking, it helps to give people distinct roles and to tell members, before deliberation begins, that everyone has different and relevant, information to contribute. Encourage team members to test decisions and opinions with alternative ideas and questions. The most important questions for any commercial manager to ask should be:
- What do I need to know, even if I don’t want to hear it?
- How do you know?
- Where and what is the evidence?
For the commercial manager, it is essential that decisions that affect the income and the future of the business, are not adversely affected by groupthink mentality, but are reached by unbiased and clear assessment of all available information. The views of a dissenting voice should not be dismissed out of hand without careful consideration - it is always possible that they might be proved right.