Oddly enough, where it is most needed, Boards and other management groups may be the last frontier for achieving enhanced performance management.
Historically, the perceived advantages of relying on a managing group, instead of one individual, include access to the group’s collective wisdom –"several heads are better than one"–as well as the ability to spread an increasing management workload over a number of people.
A recent Center for Creative Leadership study identified an additional advantage. Effective management these days requires the resources of several people, rather than the lone hero, in order to meet the global challenges of collaboratively connecting across boundaries of all kinds—geography, language, culture and expertise.
Avoiding "Extreme" Group Decision-Making
Yet there is a well-documented propensity for groups to drift toward "extreme" decisions, that is, a committee often makes a decision that none of the individual members of the committee, acting alone, would make. These group decisions can be extreme by being either extremely risky or extremely conservative, and you see lone Directors routinely disavowing their cohorts’ actions after the fact. There seem to be a number of reasons for this tendency:
Diffusion of Responsibility. An individual’s part in a group’s decision evidently weighs less heavily on him/her than an individual decision would, the implication being that not as thorough an evaluation of the issues is made when the decision is attributed to the group.
Ignoring the Lone Voice. Often groups do not properly take into account the most relevant expertise in the room. Most small groups tend to make decisions based on the information all members share about a topic, overlooking important facts that one or several people bring. Although management committees are usually looking for creative, out-of-the-box strategies, a solitary opinion is often taken lightly or ignored in the flow of debate within the group.
Social Pressure. The more bonded the group, the more committed they are likely to be to reaching a decision, particularly one that pleases most of the members, even if a decision should be delayed or a less pleasing one would in fact be best.
Competition. When committee members agree on the parameters of an issue, individuals may try to one-up each other by suggesting more and more extreme solutions, then promoting their solution as the best.
Stress. Groups under pressure act very much like individuals under stress, only more so. They often procrastinate, calling for further information, or become committed to bad decisions primarily to protect themselves and each other against criticism. This effect may account for the popular notion that committees tend to "split the baby," resulting in a less controversial solution that does not in fact work very well.
Seeing What Others Say
The impact of psychological factors on group decision making may go even further, to actually alter each person’s perceptions. A study using advanced brain-scanning technology shows that, in effect, group members often in fact see what the group tells them they see. In an exercise involving mentally rotating images of three-dimensional objects to determine if the objects were the same or different, subjects were assured of an incorrect conclusion by confederates and then agreed with those wrong answers 41% of the time. The brain activity of those who went along with the group was markedly different from those who took independent positions. When subjects concurred with wrong answers, activity increased in the area of the brain devoted to spatial awareness, meaning that their actual perceptions were being influenced. Those who made independent judgments showed activity in the region of the brain associated with conflict management, signifying an emotional toll for going against the group’s perception.
Based on the results of this study, one of the potential major advantages of a group decision—"several heads are better than one"—can disappear if the group successfully, even if unintentionally, co-opts individual insights. The most problematic aspect of these results is that not only does the group lose the "lone voices," but also the lone voices lose their very awareness of their differing perspectives. The change in their perception makes them incapable of raising their idiosyncratic flags.
A Case In Point
The turmoil at Morgan Stanley a few years ago and the decisions made by its board of directors illustrate the impact of some of these tendencies. Composed of strong-minded, business-savvy individuals, the board nonetheless, through months and months of defecting key personnel, intense business and media criticism, embarrassing legal imbroglios, disappointing financial results and stalled stock performance, closed ranks around Philip J. Purcell, the Chairman and CEO to whom most were closely allied, repeatedly refusing to consider the reassessments urged on the board by varying stakeholders, including its star performers. The clear impression was that management at Morgan Stanley did not promote or value dissenting viewpoints that (as it turns out) could have provided a useful counterpoint to the "group think" that held sway.
Building the Optimal Management Group
As a practical matter, then, group members need to be able to listen carefully to lone voices yet not give in to the peer pressure of what others on the committee think. It is a complex balancing act.
There are certainly some strategies that leadership can employ to help groups avoid some of the “group think” forces that produce less than optimal decision-making. Leadership can make sure everyone is heard, that those speaking from particular strengths and expertise are identified and that their ideas are clearly articulated. Leadership can invest responsibility in individuals for evaluating, spearheading and implementing new initiatives, and they can allow sufficient time for each person to bring the full benefit of their analysis to the issues.
Leadership need not be "feel good" cheerleaders, though. While it is pleasant and in many ways beneficial to maintain a collegial atmosphere among the management group, it is not necessarily a matter of “the more friendly, the better.” Both a healthy dose of confidence in one’s own contribution and a respectful “show me” skepticism towards others’ viewpoints can be useful.
But there is only so much leadership can do once the group is composed. These studies highlight the importance to an organization in the first place of placing in these high-powered groups the types of individuals least likely to be swayed by the psychological forces in play.
One attribute that can make a strong contribution to these groups is emotional intelligence. That may come as a surprise to lawyers steeped in the virtues of analytical thought, but the data on this front is incontrovertible: rational decision-making is significantly impaired if the area of the brain relating to emotions is damaged or excised. And the ability to identify, use, understand and manage emotions—both one’s own and others’—produces better decisions.
Another attribute of a "good team player" in this context is the ability to effectively make an individual opinion known to the group without creating a counterproductive backlash. Conflict in this situation may be inevitable and is often essential, acting as the crucible that purges the chaff from the wheat. After the dust settles, however, members should be able to find a collegial balance until the next set of issues arises.
Who are the optimal candidates for these high-powered positions? Those who:
• exhibit the character strengths of honesty and bravery,
• are high in emotional intelligence,
• are aware of their unique expertise and perspectives,
• are willing to speak out and promote their viewpoints,
• are committed to applying the same rigor to making good group decisions as they would apply to
making individual ones, and
• possess the collaborative conflict skills necessary to wrangle effectively over a highly charged issue without seriously undermining his/her relationship with other committee members.
How do you find management candidates with these specific characteristics? Most corporations evaluate their operational personnel through a combination of reviews and assessments to determine those who are likely to possess the qualities they want. But those same corporations rarely ask existing Board members or Board of Director candidates to undergo similar testing.
In law firms, nominations to a management group are often made on the basis of seniority, revenue-generation or availability of time, none of which takes into account any of these desirable traits. While attorneys often contend they "know" their partners, rarely have any assessments been conducted to verify those "hunches."
The good news is that, if an organization wants to improve its decision-making at the top, there are reliable methods to do so. Existing management group styles and the roles that individual members play can be assessed and developed and those most likely to be able to contribute to better decision making can be identified.