Groupthink and how to avoid it

Groupthink and how to avoid it

13:20 10 September in Business
10 Comments

What is groupthink?

When groups make decisions, they may well take more risks than the individuals themselves would – this is “groupthink”. The term “groupthink” was coined by psychologist Irving Janis in the 70s.

Janis defined groupthink as a phenomenon where people seek unanimous agreement in spite of contrary facts pointing to another conclusion. Groupthink tends to occur when a group strive to reach consensus despite organisational flaws, combined with a high degree of homogeneity of member’s social background and ideology. Extreme pressure or stress can exacerbate the situation.

What are the symptoms of groupthink?

In summary there are eight symptoms of groupthink to look out for:

  • Illusions of invulnerability – creating excessive optimism and encouraging risk taking.
  • Ignoring warnings that might challenge the group’s assumptions.
  • Unquestioned belief in the morality of the group, causing members to ignore the consequences of their actions.
  • Stereotyping those who are opposed to the group as weak, evil, biased, spiteful, impotent, or stupid.
  • Direct pressure to conform placed on any member who questions the group, couched in terms of “disloyalty”.
  • Self censorship of ideas that deviate from the apparent group consensus.
  • Illusions of unanimity among group members, silence is viewed as agreement.
  • Mindguards – self-appointed members who shield the group from dissenting information

What are the consequences of groupthink?

  • Incomplete survey of objectives
  • Incomplete assessment of alternatives
  • Failure to examine risks of the preferred choice
  • Failure to re-evaluate previously rejected alternatives
  • Poor information research
  • Selection bias in collecting information
  • Failure to work out contingency plans

Examples of groupthink disasters

Recent examples of business groupthink disasters (and potential Black Swans!) would be Enron, Northern Rock, Lehman Bros, RBS and HBOS where a well publicised story circulated about the HBOS Risk Manager who was “censored” for raising concerns regarding the company’s strategy.

However, much of Janis’ research was based on a series of US foreign policy disasters in the 1970s and in particular, the Bay of Pigs fiasco. In 1961, approximately 1400 Cuban exiles, helped by the US military, were landed on the coast of Cuba at the Bay of Pigs with the intent of overthrowing the reshime. Within three days virtually all were dead or captured. President John F Kennedy approved the invasion based on advice from a “team of experts”. The team made a number of key assumptions that proved to be false e.g.:

  • The invasion will trigger an uprising amongst the Cuban population – it didn’t
  • There will be no requirement to retreat from the Bay of Pigs after landing – there was; and so on…..

Janis concluded that the group of experts did not considerer alternative viewpoints on the invasion sufficiently and fought too hard to achieve consensus. JFK accepted their conclusions because they were “experts”.

 Interestingly, when the Cuban missile crisis developed, JFK managed the situation very differently.

>Another classic example of groupthink risk was the Challenger space shuttle disaster in 1986. Against the recommendations of individual engineers, the “group” agreed to launch and we all know what happened next. Watch this short video which shows explicitly (and shockingly!) how groupthink in the management team contributed to the Challenger disaster http://www.crmlearning.com/groupthink-2nd-edition.

How do we avoid groupthink

There are a number of relatively simple but effective ways of avoiding groupthink from an organisational perspective i.e.

  • Use external experts to challenge the group thinking
  • Set-up multiple groups working on the same issue
  • Appoint a “devil’s advocate” for key meetings to test conclusions
  • Senior management deliberately avoid expressing opinions before key meetings/projects

When JFK was faced with the Cuban missile crisis in 1962, he seemed to have learned well from the Bay of Pigs. During planning meetings, he invited outside experts to share their views, and allowed group members to question them thoroughly. He also encouraged group members to discuss possible solutions with trusted members within their separate departments, and he even divided the group up into various sub-groups, to breakdown the group cohesion. JFK was deliberately absent from the meetings, so as to avoid pressing his own opinion. As we know (because we are all still here!!!), the Cuban missile crisis was resolved peacefully, and the role of these measures has been acknowledged.

How does ABCD help to avoid groupthink?

When ABCD was originally developed in 1992 it was specifically tailored to avoid the problems that are frequently encountered with traditional risk management techniques. Groupthink was one of the problems considered and is addressed by:

  • Interviews – workshops are a terrible way of capturing risks where the group dynamics will allow certain individuals to dominate the discussion while others remain quiet. Interviews ensure that all voices are heard equally and are actually significantly more efficient than workshops for risk identification.
  • Assumptions – by focussing on positive assumptions rather than negative risks, all aspects of the enterprise are considered in a positive and systematic way and openness is naturally encouraged. People are led to think about what needs to happen for success (i.e. the assumptions) rather than being forced to look for risks, which is psychologically unnatural.
  • Assumption ratings – ABCD operates on a “worst case wins” basis i.e. the person who is most concerned controls the ratings even if they have isolated views. This forces people to communicate so that the minimum “Risk Plan” forces “optimists” to talk to “pessimists”. This will either resolve concerns or identify risk that the majority had missed.
  • Top-to bottom integrity – senior management can set overall risk ratings (i.e. Criticality and Controllability) but they are not allowed to change assumption ratings or close risks/assumptions. Risks can only be closed when the assumption originator agrees to down-grade the ratings.

So would the use of ABCD have prevented the Challenger shuttle disaster? Who knows, but the rigorous structure that ABCD imposes would certainly have ensured that all assumptions were evaluated appropriately for risk before the launch was sanctioned.

Comment on this piece or ask questions on the De-RISK Blog

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10 Comments
  • guest 10:50h, 14 October Reply

    […] De-RISK Blog « Groupthink and Risk […]

  • guest 10:23h, 14 September Reply

    Keith

    Once again, a stimulating piece.

    It’s interesting to consider how the commonly-used technique for estimating (especially in software development) is the (wide-band) Delphi technique, which also attempts to avoid ‘groupthink’ through having independently-facilitated expert opinions brought to bear upon the challenging of determining the ‘most likely’ outcome of a given situation.

    I wonder how well this approach, which is quite well established, complements that of ABCD? There are of course, differences, such as the expert input typically being garnered via questionnaires, rather than interview, and which would not fit with the need, in risk identification, to be unconstrained in ones thinking. When I have used it, I have sought details of the experts’ assumptions that underpin their estimates, and then can challenge those assumptionsas as a means of resolving disparate opinions.

    However, the Delphi approach of addressing ‘outliers’ (which could be Black Swan scenarios!) does seem akin to the ABCD approach.

    – Terry

  • Keith Baxter
    Keith Baxter 22:22h, 14 September Reply

    Hi Keith – Im pretty new to ABCD but I am really surprised about your comments regarding workshops. I find that the only way of getting people to discuss risk mitigation is to get them together in a workshop. Would like to hear more of your views on this?

  • Keith Baxter
    Keith Baxter 10:43h, 14 September Reply

    Hi Julie – maybe I didnt explain properly in the piece. I believe that workshops are poor for risk identification for all the reasons above. However, I also believe that workshops are the best way of agreeing and monitoring mitigation plans and indeed the ABCD Risk Review Board is effectively a highly structured workshop. I hope that allays your fears!

  • Keith Baxter
    Keith Baxter 06:35h, 14 September Reply

    Watched the BBC drama on the Lehman Bros demise last night. I saw every single one of the groupthink symptoms on display!

  • Keith Baxter
    Keith Baxter 09:22h, 14 September Reply

    Yes saw that too – very good and still available to see on iPlayer I belive. Also interesting to see the way that the US Government played the situation – they made lots of assumptions that proved to be wrong and many people would say that the downturn would have been less if they had provided more support?

  • Keith Baxter
    Keith Baxter 09:40h, 14 September Reply

    Keith – interesting piece and would agree with most of it. One area that I feel strongly about is the use of external intervention. I have had many experiences, both good and bad, with management consultants. When are industry (or process) experts, they can be worth their weight in gold; particularly when they are capable and prepared to stand up to senior management. When they provide “bright young” MBAs they are often a complete waste of time and money. Not always but mostly!

  • guest 11:15h, 14 September Reply

    Did you see the article about Lehmans on the BBC website today (Tuesday 15/Sep)?

    An extract:

    “I was absolutely stunned”, says Mr DeMuro, a senior executive who’d been at Lehman Brothers for nearly 25 years.

    Mr DeMuro was the head of global compliance at Lehman, in other words he was in charge of making sure it obeyed all the market rules. He admits that he had been worried for some time about the firm’s exposure to property-backed investments.

    “Of course I wish I’d been more vocal. But would it have made any difference? I don’t know,” he says.

    “Do you want to put me up against a PhD in mathematics in order to test a particular business model? I can tell you that my instincts were that something didn’t feel right about it. Did I ever think it would be as catastrophic as it turned out to be? No, I did not.”

    Groupthink at work?

  • guest 16:21h, 14 December Reply

    […] This post was mentioned on Twitter by Keith Baxter, Keith Baxter. Keith Baxter said: Groupthink and risk management – blog update http://bit.ly/5vzHIG […]

  • Keith Baxter
    Keith Baxter 09:13h, 14 September Reply

    Thanks Fay – excellent example. Another one that came to my attention yeasterday is David Blanchflower – former MPC committee member for the Bank of England. Blanchflower described Governer Mervyn King as “the old iron fist of the Bank of England, heading a Bank gripped by groupthink”. Blanchflower was the only MPC member to consistently predict the recession long before the s**t hit the fan!

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