Small Business

Where Group-Think Is Good

Groups often provide the best answers to business problems—provided you know how to structure the team

If you're a contestant on the game show Who Wants to Be a Millionaire? and you don't know the answer to a question, apart from guessing randomly, you have three choices: You can pick an option in which two of the incorrect answers are eliminated for you, so that you have a 50% chance of being right; you can poll the audience; or you can phone a friend. (Now let's be honest, if you're selected to be on the show, your "friend" is going to be the smartest person you know.)

In his book The Wisdom of Crowds, James Surowiecki looked at how often each of these last two options produced a correct answer on the show. The smart friend option did pretty well—producing a correct answer roughly 65% of the time. The real surprise? Audience members produced a correct answer 91% of the time.

This wasn't a scientific study, so we can say that in general groups will come up with better answers than smart individuals will on their own. We don't know how smart these "friends" actually were—nor can we be sure that contestants didn't ask the audience easier questions than they asked their friends. Still, Surowiecki believes that this is just one example of how groups can be better at solving problems than individuals.

Combined Intelligences

Wait, you say, isn't the opposite usually true? Isn't group-think famously responsible for all kinds of errors? You can look at the U.S. decision to invade Cuba at the Bay of Pigs as a prime example of group-think. As President Kennedy and his closest advisers huddled to consider the CIA-proposed invasion, the one person who opposed the strike, Arthur Schlesinger, sat silent—not wanting to undermine the President's desire for a unanimous decision.

The invasion was a disaster. Schlesinger later lamented, "In the months after the Bay of Pigs, I bitterly reproached myself for having kept so silent during those crucial discussions in the cabinet room." He continued, "I can only explain my failure to do more than raise a few timid questions by reporting that one's impulse to blow the whistle on this nonsense was simply undone by the circumstances of the discussion."

So if groups are capable of making better decisions than individuals can make on their own, what are the keys to building smart teams that don't fall into the group-think trap? I agree with Surowiecki's suggestion that effective group decision-making requires four things: 1) a group that's diverse; 2) a group whose members are willing and able to act independently; 3) a group that's decentralized; and 4) a method for effectively aggregating the individual intelligences of group members.

Peer Pressure

Group diversity and decentralization help to assure that an issue is examined from a diverse set of perspectives. When setting corporate strategy, for example, it's best to involve people in the process from several levels of the company, and from all of the major functional areas. People at the top of any organization tend to get information that has already been filtered and organized to fit a set of assumptions. The strategy process should be seen as an opportunity for senior managers to get access to unfiltered data, which may help them identify the assumptions the company holds—assumptions which may be becoming obsolete.

Acting independently was a problem for President Kennedy's staff. Schlesinger says he was silent in those meetings partially because Kennedy's brother Bobby was pressuring him to support the invasion. Instead of standing up for what he believed, Schlesinger felt pressured to be a team player—and thus hurt the group's chances for coming up with the right answer.

Finally, for groups to be effective, they need to have a method of aggregating the opinions and insights of individual members in a way that doesn't undermine diversity and independence. When I work with companies to help them set strategy, I always send 30 to 50 people a "strategy sketch" document, and ask them to return it to me with their reflections on what they consider the most important issues facing the business.

Mind Bank

I purposely do this before I have an in-depth discussion with senior management. In this way, I'm able to aggregate the input from people at all levels of the company—and that often helps me to identify important themes in the organization that aren't initially visible to senior managers.

Bottom line: If you're looking for a way to make better decisions in your company, you will find that the more minds you get working on the problem, the better the solution.

Keith McFarland is author of the #1 Wall Street Journal bestseller The Breakthrough Company: How Everyday Companies Become Extraordinary Performers. He is founder of McFarland Strategy Partners.

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