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Are you Dundler Mifflin in disguise?

 In Business decisions, Insights, Management, Teams

Have you ever felt like you worked at Dunder Mifflin*? Ever shook your head at something the management team did at your work?

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Today I’m thinking about group decision making, specifically how they make good and bad decisions. McKinsey research showed that only 28% of managers say their company makes more good decisions than bad decisions.

And when McKinsey analysed decisions made in over 1000 companies, they found the outcome of those decisions was reliant on the quality of the decision making process. 53% of the variation in outcomes was due to the steps taken in the decision process, and only 8% due to the quantity and detail of analysis.

The challenges groups face in making decisions include:

Lack of divergent views – if everyone has learned to think in the same way, rests on the same assumptions, or just follows the leader, then you’re not going to get good decisions. This is sometimes known as Groupthink.

Not checking the facts. We often make huge decisions based on debatable assumptions. And we often do not even bother looking for data which counters our point of view. Say you’re looking to launch a new product. You might search for consumer insights to support the product. But you rarely deliberately search for insights which might call it into question. This is called the confirmation bias – only looking for data that supports you.

Not considering multiple options. In big decisions you should have multiple options and if it’s a financial decision, you should have a clear sense of what else you could do with that money instead. And yet…only 29% of companies in McKinsey’s study looked at multiple options.

So, how do you make a good group decision?

There are some clues in The Wisdom of Crowds, where James Surowiecki looks at the example of Who Wants to Be a Millionaire. If you examine the most common answer when a contestant Asks The Audience, it’s right a staggering 91% of the time. Surowiecki states 4 conditions that make for crowd wisdom.

  • Diversity – people with different backgrounds
  • Independence – people not influencing each other
  • Decentralization – a number of different groups working on the same problem
  • Aggregation – ability to collect and average people’s answers

My research shows that applying some of this thinking to your team will make you more like Google and less like Dunder Mifflin.

In practice, what does this mean?

First, create your team from different backgrounds. This can just mean bringing in people from other divisions, or even outside experts.

Second, be very clear in encouraging people to express their own point of view. Get people to write down their point of view on an issue before discussion sways them. The term constructive conflict is also a favourite of mine here, where you encourage people to disagree. As a leader you need to clearly demonstrate and prove that you are open-minded, willing to listen and be challenged.

Third, in the case of big decisions, create two different teams to work up different options. Start them out in different directions, maybe even for and against a proposal. And then have them present to each other and critique each other’s proposals.

If you spend 50% of your work life in group meetings, and say a third of those meetings aren’t productive and decisive – that means you are wasting one sixth of your working year not being useful! My vision is to help companies wrestle back some of those wasted hours. Click here to read more about my services.

*Dunder Mifflin is the paper products company, home of “The Office” TV show

Posted by Rob Pyne