Commitment to the group, fear of dissent and social pressures can deter constructive criticism and make group members blind to risks. weakness and bad ideas. “Groupthink”, as it is called, can be a significant liability when it occurs in the boardroom, leading organizations to make bad decisions on investments, products and strategies.
Boards of directors can work to overcome groupthink by valuing diversity and criticism and by starting with individual thought before engaging in the group. Here are 4 ways to help overcome groupthink in the boardroom.
1. Value criticism. While boards need members that are committed to their company, they should also be vigilant about advancing innovations or ideas that haven’t been thoroughly vetted, Kenneth Evans, brand reputation consultant and managing partner at APEX Public Relations told the Globe and Mail.
Boards need to value criticism, dissent and occasional non-conformity. Evans says groups can integrate “internal systems of critique and layers of sober second thought” into vetting ideas or resolutions. “Leaders at the very least must take this role on and really grill teams on their perspective and the evidence they’re leveraging to prove it,” says Evans.
2. Value and increase diversity. Increasing diversity among board members isn’t just about attaining goodwill, it’s about creating value through diversity of ideas. Russell Reynolds Associates says in a blog post that having a wide range of perspectives in the boardroom is critical to effective corporate governance. One director said that a company wants directors to have experience in dealing with risk from many angles “because you don’t know where your risk is going to come from. Having directors from very diverse backgrounds really helps.”
Many shareholders are starting now to realize the value of it and are pressuring companies to increase board diversity. ExxonMobil recently lost a vote over a shareholder resolution that would enable large shareholders with 3% or more of outstanding shares to nominate their own candidates for the company’s board. According to the Washington Post, a representative of three of New York City’s municipal employee pension funds said ExxonMobil’s board ran the danger of groupthink, as it was the least diverse of the six biggest international oil and gas companies.
3. Designate a devil’s advocate. M.G. Siegler, a general partner at Google Ventures, told TechCrunch that “every company could benefit from some sort of Vice President of Devil’s Advocacy.” He says companies need someone who can look at ideas or concepts and identify reasons they will fail. Siegler says Steve Jobs served a similar role throughout his years at Apple, often criticizing ideas and canceling launches at the last minute if he felt something wasn’t right.
He says a devil’s advocate can help prevent groupthink and bring much-needed contrary perspective. Siegler recommends companies knowingly keep this person “in the dark” about product launches until the last minute then engage them in vetting the idea. A similar concept could work on a board of directors by designating a person whose sole responsibility is to come up with constructive criticism. “This needs to be a single person whose opinion is fully trusted. Someone with the power to kill or postpone a launch,” says Siegler.
4. Diverge, then converge. Art Markman, Professor of Psychology and Marketing at the University of Texas at Austin, told the Harvard Business Review that groups need to know when to diverge and when to converge. Markman says traditional brainstorming methods often fail because when groups start throwing out ideas, they actually come up with fewer actionable ideas than when they worked alone.
“In group settings, as soon as one person states a potential solution to everyone else, that influences the memory of every person in the group in ways that make everyone think about the problem more similarly,” says Markman.
Markman says group members should work alone first to consider problems and ideas, then return to the group to have discussions. “The group discussion will lead everyone to accept one or a small number of variants of these [ideas] to work on. This is healthy convergence,” he says.