What lessons could the humid shores of the Caribbean, the freezing heights of the Himalayas, or the farthest reaches of Earth's atmosphere hold for your company or organization? Although those places couldn't be more different, all were the scenes of disastrous outcomes brought on by a weakness to which all organized human groups are susceptible—the suppression, especially during planning and decision-making, of views that might be perceived as contentious or disruptive to an organization's foundational beliefs.
Consider the costs to organizations, large and small, when dissent does not or cannot surface: Abjuring rigorous debate about its merits, a youthful president John F. Kennedy essentially rubber-stamped a 1961 plan to invade Cuba at the Bay of Pigs, resulting in one of the biggest U.S. foreign policy fiascoes in decades. During a 1996 commercial expedition to the summit of Mt. Everest, several climbers, including two of the world's most experienced professionals, died in part because junior team members didn't speak up when their expert leaders ignored their own core operating principles surrounding safety. In 2003, NASA engineers were reluctant to challenge long-held beliefs that foam strikes incurred during the launch of the space shuttle Columbia posed no risk to its fuselage.
This propensity to maintain silence, a flaw at once personal and organizational, is "widespread and problematic" in both the public and the private sectors, says HBS professor Amy Edmondson, who chairs the Doctoral Programs and teaches in the Technology and Operations Management unit.
"To cite one example, former HBS doctoral student Jim Detert and I interviewed some 200 people of all ranks and functions in a high-tech multinational. We found to a very significant degree that people did not speak up about things they deemed important. Most of those were not 'bad news' things; to our surprise we found that people were reluctant to voice what they perceived to be good ideas, unless they were extraordinarily confident they would be well-received. And this in a firm that lives and dies by its ideas."
Edmondson says this reluctance to speak up stems variously from fears that superiors will not like the idea or that it may appear to criticize the status quo, which most people find reassuringly familiar or dangerous to challenge. Edmondson sums up the mental calculation this way: "The potential costs to me for speaking out seem reasonably certain and somewhat immediate; the potential benefit to me for speaking out seems rather uncertain and definitely long-range."
In the corporate world, Detroit's V-8 car culture was long unable to entertain the notion that a large segment of consumers might prefer automobiles that were safe and fuel-efficient. Coca-Cola ignored evidence that "New Coke" would fizzle and launched it anyway. Companies in the mechanical-watch and analog-photography industries refused to heed the messengers and the message that adaptation and change were necessary if they were to continue to exist.
Challenges to the conventional wisdom can be upsetting to individuals and organizations alike, and for that reason are often suppressed or discouraged. "Don't rock the boat" and "You get along by going along" seem crude and outdated workplace mantras when contrasted with the sophistication of modern business, yet they are still considered sound advice.
Compensating candor
HBS professor Max Bazerman of the Negotiation, Organizations & Markets unit believes that within organizations, candor should be rewarded and incentives designed to encourage that.
Says Bazerman, "Executives sometimes complain to me that their sales force is sacrificing profitability for revenue by lowering prices to make more sales. So I ask them, 'On what basis do you compensate them?' Inevitably they answer, 'On the number of sales made.' Similarly, when executives complain that 'My people just don't bring me dissenting views, what do I do?' my reaction is, 'Can you tell me the last three times someone brought up a dissenting view, what happened with that discussion?' Often executives themselves are responsible for suppressing dissent: They're not fully listening, they're cutting people off, or they have a preconceived notion of where they're going. In fact, many times leaders prefer an orderly shop and aren't actually looking for dissent."
From the Oval Office to the boardrooms of Detroit and everywhere in between, "fundamental but highly controversial issues often are not surfaced," former Vietnam-era Secretary of Defense, Ford Motor Company president, and World Bank president Robert S. McNamara (HBS MBA '39) told the HBS Alumni Bulletin in 2004. The reason, McNamara explained, is that such issues are deemed too threatening to organizational harmony or to individuals' career advancement. As a result, the validity of a principal U.S. rationale for the Vietnam War, the "domino theory," was never debated at the highest levels, McNamara said, nor was Detroit's received wisdom that the American public would be reluctant to buy compact, fuel-efficient, and designed-for-safety cars.
Ironically, some eight decades ago, Detroit had a notably powerful advocate for dissent and disagreement in decision-making. At a meeting of one of General Motors' top committees in the 1920s, GM president Alfred P. Sloan Jr. said, "Gentlemen, I take it we are all in complete agreement on the subject here." Heads nodded around the table. "Then," continued Sloan, "I propose we postpone further discussion of this matter until our next meeting, to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about."
Developing disagreement and "high-contention" decision-making at the loftiest levels of the organization were things that HBS professor Bill George of the Organizational Behavior unit insisted on when he took over as CEO of Medtronic, the medical-devices company, in 1991. That's in part because George had experienced firsthand what Robert McNamara warned of—George worked under McNamara for several years while an assistant to the late HBS professor Robert Anthony, whom McNamara had hired to be comptroller of the Defense Department.
"Unfortunately, McNamara himself contributed to the very shortcoming he speaks of—his domineering style led him to shut out other voices," recalls George. It was a lesson that George took to heart and would later draw upon during his own business career.
Start at the top
"If you want good decision-making, contention is essential," George says. "When I joined Medtronic, one of the things undermining its performance was conflict avoidance. To reverse that, we established a system that had a COO in charge of line operations along with a vice chairman of equal power who was responsible for quality, for being alert to any possible problems, and for raising questions about them. You need a team at the top where high contention is demanded and rewarded. If it doesn't start at the top, it will not operate in other places."
During the decision-making process, George explains, this means asking probing questions and insisting that managers present each situation in objective terms, rather than with a positive spin.
"You must acknowledge and thank those who disagree by telling them that they made the discussion, and hence the ultimate decision, much better," George says. "You need to reward and promote the mavericks or else the organization will lose its creative edge. You try to create tension inside because the outside challenge is so great."
HBS professor Michael Tushman of the Organizational Behavior unit also sees an aware, open, and inquiring senior team as critical to sound decision-making.
"The key is for senior teams to be able to hold paradoxical ideas, or to think in the future and the past, simultaneously," Tushman declares. "Otherwise, the past will always trump the future—people prefer not to know about the future because it's so threatening to entrenched interests and to career competencies."
Tushman has been focusing his research on companies that can "be both big and small, be centralized and decentralized, live in the future and the past, and 'exploit and explore,' all at the same time. That's a relatively rare accomplishment," he says. Tushman cites organizations such as Analog Devices, British Telecom, IBM, and Procter & Gamble as achieving these goals to varying degrees.
How do firms achieve that level of performance? Tushman says they need an overarching aspiration (for a watch company, it might be "We're going to tell time," without being wedded to any particular technology). Also required are internal architectures that honor both the past and the present and a senior team or CEO who can embrace these contradictions and make trade-offs to accommodate them. Adds Tushman, "Some groups 'exploit' and some 'explore,' and you don't want to mix them. The locus of these controversial issues is thus at the highest levels."
Honesty at the heart of improvement
Business, which prides itself on its pragmatism, needs to remain aware that the managerial and organizational structures that define it can also breed protective sacred cows or truth-denying ideologies that ultimately threaten it. What's required in an organization is honest, thorough, and ongoing self-criticism, which, after all, is at the heart of continuous improvement.
Many observers note that one of the factors contributing to the preeminence of Toyota, arguably the world's most successful company, is its openness to learning, driven by humility.
History shows that the best and the brightest—the smartest guys in the room—often make mistakes because they won't listen to what they falsely believe is not worth hearing. Shutting out voices that might say otherwise can be risky. Decisions are seldom better for silence, and overcoming that is a key task for the leader of any organization.
Consider the costs to organizations, large and small, when dissent does not or cannot surface: Abjuring rigorous debate about its merits, a youthful president John F. Kennedy essentially rubber-stamped a 1961 plan to invade Cuba at the Bay of Pigs, resulting in one of the biggest U.S. foreign policy fiascoes in decades. During a 1996 commercial expedition to the summit of Mt. Everest, several climbers, including two of the world's most experienced professionals, died in part because junior team members didn't speak up when their expert leaders ignored their own core operating principles surrounding safety. In 2003, NASA engineers were reluctant to challenge long-held beliefs that foam strikes incurred during the launch of the space shuttle Columbia posed no risk to its fuselage.
This propensity to maintain silence, a flaw at once personal and organizational, is "widespread and problematic" in both the public and the private sectors, says HBS professor Amy Edmondson, who chairs the Doctoral Programs and teaches in the Technology and Operations Management unit.
"To cite one example, former HBS doctoral student Jim Detert and I interviewed some 200 people of all ranks and functions in a high-tech multinational. We found to a very significant degree that people did not speak up about things they deemed important. Most of those were not 'bad news' things; to our surprise we found that people were reluctant to voice what they perceived to be good ideas, unless they were extraordinarily confident they would be well-received. And this in a firm that lives and dies by its ideas."
Edmondson says this reluctance to speak up stems variously from fears that superiors will not like the idea or that it may appear to criticize the status quo, which most people find reassuringly familiar or dangerous to challenge. Edmondson sums up the mental calculation this way: "The potential costs to me for speaking out seem reasonably certain and somewhat immediate; the potential benefit to me for speaking out seems rather uncertain and definitely long-range."
In the corporate world, Detroit's V-8 car culture was long unable to entertain the notion that a large segment of consumers might prefer automobiles that were safe and fuel-efficient. Coca-Cola ignored evidence that "New Coke" would fizzle and launched it anyway. Companies in the mechanical-watch and analog-photography industries refused to heed the messengers and the message that adaptation and change were necessary if they were to continue to exist.
Challenges to the conventional wisdom can be upsetting to individuals and organizations alike, and for that reason are often suppressed or discouraged. "Don't rock the boat" and "You get along by going along" seem crude and outdated workplace mantras when contrasted with the sophistication of modern business, yet they are still considered sound advice.
Compensating candor
HBS professor Max Bazerman of the Negotiation, Organizations & Markets unit believes that within organizations, candor should be rewarded and incentives designed to encourage that.
Says Bazerman, "Executives sometimes complain to me that their sales force is sacrificing profitability for revenue by lowering prices to make more sales. So I ask them, 'On what basis do you compensate them?' Inevitably they answer, 'On the number of sales made.' Similarly, when executives complain that 'My people just don't bring me dissenting views, what do I do?' my reaction is, 'Can you tell me the last three times someone brought up a dissenting view, what happened with that discussion?' Often executives themselves are responsible for suppressing dissent: They're not fully listening, they're cutting people off, or they have a preconceived notion of where they're going. In fact, many times leaders prefer an orderly shop and aren't actually looking for dissent."
From the Oval Office to the boardrooms of Detroit and everywhere in between, "fundamental but highly controversial issues often are not surfaced," former Vietnam-era Secretary of Defense, Ford Motor Company president, and World Bank president Robert S. McNamara (HBS MBA '39) told the HBS Alumni Bulletin in 2004. The reason, McNamara explained, is that such issues are deemed too threatening to organizational harmony or to individuals' career advancement. As a result, the validity of a principal U.S. rationale for the Vietnam War, the "domino theory," was never debated at the highest levels, McNamara said, nor was Detroit's received wisdom that the American public would be reluctant to buy compact, fuel-efficient, and designed-for-safety cars.
Ironically, some eight decades ago, Detroit had a notably powerful advocate for dissent and disagreement in decision-making. At a meeting of one of General Motors' top committees in the 1920s, GM president Alfred P. Sloan Jr. said, "Gentlemen, I take it we are all in complete agreement on the subject here." Heads nodded around the table. "Then," continued Sloan, "I propose we postpone further discussion of this matter until our next meeting, to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about."
Developing disagreement and "high-contention" decision-making at the loftiest levels of the organization were things that HBS professor Bill George of the Organizational Behavior unit insisted on when he took over as CEO of Medtronic, the medical-devices company, in 1991. That's in part because George had experienced firsthand what Robert McNamara warned of—George worked under McNamara for several years while an assistant to the late HBS professor Robert Anthony, whom McNamara had hired to be comptroller of the Defense Department.
"Unfortunately, McNamara himself contributed to the very shortcoming he speaks of—his domineering style led him to shut out other voices," recalls George. It was a lesson that George took to heart and would later draw upon during his own business career.
Start at the top
"If you want good decision-making, contention is essential," George says. "When I joined Medtronic, one of the things undermining its performance was conflict avoidance. To reverse that, we established a system that had a COO in charge of line operations along with a vice chairman of equal power who was responsible for quality, for being alert to any possible problems, and for raising questions about them. You need a team at the top where high contention is demanded and rewarded. If it doesn't start at the top, it will not operate in other places."
During the decision-making process, George explains, this means asking probing questions and insisting that managers present each situation in objective terms, rather than with a positive spin.
"You must acknowledge and thank those who disagree by telling them that they made the discussion, and hence the ultimate decision, much better," George says. "You need to reward and promote the mavericks or else the organization will lose its creative edge. You try to create tension inside because the outside challenge is so great."
HBS professor Michael Tushman of the Organizational Behavior unit also sees an aware, open, and inquiring senior team as critical to sound decision-making.
"The key is for senior teams to be able to hold paradoxical ideas, or to think in the future and the past, simultaneously," Tushman declares. "Otherwise, the past will always trump the future—people prefer not to know about the future because it's so threatening to entrenched interests and to career competencies."
Tushman has been focusing his research on companies that can "be both big and small, be centralized and decentralized, live in the future and the past, and 'exploit and explore,' all at the same time. That's a relatively rare accomplishment," he says. Tushman cites organizations such as Analog Devices, British Telecom, IBM, and Procter & Gamble as achieving these goals to varying degrees.
How do firms achieve that level of performance? Tushman says they need an overarching aspiration (for a watch company, it might be "We're going to tell time," without being wedded to any particular technology). Also required are internal architectures that honor both the past and the present and a senior team or CEO who can embrace these contradictions and make trade-offs to accommodate them. Adds Tushman, "Some groups 'exploit' and some 'explore,' and you don't want to mix them. The locus of these controversial issues is thus at the highest levels."
Honesty at the heart of improvement
Business, which prides itself on its pragmatism, needs to remain aware that the managerial and organizational structures that define it can also breed protective sacred cows or truth-denying ideologies that ultimately threaten it. What's required in an organization is honest, thorough, and ongoing self-criticism, which, after all, is at the heart of continuous improvement.
Many observers note that one of the factors contributing to the preeminence of Toyota, arguably the world's most successful company, is its openness to learning, driven by humility.
History shows that the best and the brightest—the smartest guys in the room—often make mistakes because they won't listen to what they falsely believe is not worth hearing. Shutting out voices that might say otherwise can be risky. Decisions are seldom better for silence, and overcoming that is a key task for the leader of any organization.
1 comment:
StrategyDriven contributors believe that shared experience, organizational pride, and/or conflict avoidance can diminish the criticality of data and conclusion assessment; leading to exaggerated optimism and resulting in an organizational pursuit of unrealistic goals. Inflated expectations may drive investment in projects well outside of the organization’s risk tolerance. In today’s aggressive marketplace and under intense shareholder scrutiny, missteps like these can be disastrous for a company and its executive team.
Employing a Devil’s Advocate throughout the assessment and decision-making processes helps prevent the unintended consequences of groupthink. As a contrarian, the Devil’s Advocate deliberately assumes a position opposed to the consensus viewpoint. He or she actively seeks opportunities to discredit supporting information and challenge seemingly logical conclusions. By attacking the group’s position, the Devil’s Advocate demands a rigorous defense be presented by the evaluating group; ultimately strengthening the final decision.
The Devil’s Advocate is itself a challenging position to fill. Some organization’s have one or more individuals who naturally assume this role. For those not having a resident skeptic, the position of Devil’s Advocate can be assigned on a rotational basis in order to share the wealth. In either case, the contrarian qualities of critical thinking and questioning attitude are worthy of development in all managers and executives.
Additional best practice methodologies associated with managerial decision-making can be found on the StrategyDriven website at www.StrategyDriven.com.
All the Best,
Nathan Ives
Founder
StrategyDriven
Post a Comment