Taking the bias out of meetings
Managing bias effectively can help lessen the impact it has on your company’s strategy - Dan Lovallo and Olivier Sibony
The biases that undermine strategic decision making often operate in meetings.
Here is a menu of ideas for running them in a way that will mitigate the impact
of those biases. Not every suggestion will be applicable to all types of
decisions or organizations, but paying attention to the principles underlying
these ideas should pay dividends for any executive trying to run meetings that
lead to sounder decisions. Also included are related comments from executives
and experts we spoke with while creating our special package: “Seeing through
biases in strategic decisions.”
Make sure the right people are involved
Ensure diversity of backgrounds, roles, risk aversion profiles, and interests; cultivate critics within the top team:
“You need internal critics—people who have the courage to give you feedback,”
says Anne Mulchay, chairman and former CEO of Xerox. “This requires a certain
comfort with confrontation, so it’s a skill that has to be developed. The
decisions that come out of allowing people to have different views are often
harder to implement than what comes out of consensus decision making, but
they’re also better.” (See “Xerox’s Anne Mulcahy: ‘Timeliness trumps
Invite contributions based on expertise, not rank. Don’t hesitate to invite expert contributors to come and present a point of view without attending the entire meeting.
For the portion of the meeting where a decision is going to be made, keep attendance to a minimum, preferably with a team that has experience making decisions together. This loads the dice in favor of depersonalized debate by eliminating executives’ fear of exposing their subordinates to conflict and also creates, over time, an environment of trust among that small group of decision makers.
Make sure predecision due diligence is based on accurate, sufficient, and
independent facts and on appropriate analytical techniques.
Request alternatives and “out of the box” plans—for instance, by soliciting input from outsiders to the decision-making process.
Consider setting up competing fact-gathering teams charged with investigating opposing hypotheses.
Create the right atmosphere
As the final decision maker, ask others to speak up (starting with the most
junior person); show you can change your mind based on their input; strive to
create a “peerlike” atmosphere.
Encourage admissions of individual experiences and interests that create possible biases.
According to Kleiner Perkins partner Randy Komisar, for example, a contentious debate over manufacturing strategy at the start-up WebTV suddenly became more manageable once it was clear that managers with software experience were frightened about building hardware and managers with hardware experience were afraid of ceding control to contract manufacturers. (See Dan Lovallo and Olivier Sibony, “The case for behavioral strategy.”)
Encourage expressions of doubt and create a climate that recognizes reasonable people may disagree when discussing difficult decisions.
Encourage substantive disagreements on the issue at hand by clearly dissociating it from personal conflict, using humor to defuse tension.
Manage the debate
Before you get going, make sure everyone knows the meeting’s purpose (making a
decision) and the criteria you will be using to make that decision. For
recurring decisions (such as R&D portfolio reviews), make it clear to everyone
that those criteria include “forcing devices” (such as comparing projects
against one another).
Take the pulse of the room: ask participants to write down their initial positions, use voting devices, or ask participants for their “balance sheets” of pros and cons.
“Frankly, I’m surprised that when you have a reasonably well-informed group it isn’t more common to begin by having everyone write their conclusions on a slip of paper,” remarks Nobel laureate Daniel Kahneman. “If you don’t do that, the discussion will create an enormous amount of conformity.” (See “Strategic decisions: When can you trust your gut?”)
“Put together a simple balance sheet where everybody around the table is asked to list points on both sides: ‘Tell me what is good about this opportunity; tell me what is bad about it. Do not tell me your judgment yet. I don’t want to know,’” says Randy Komisar, partner at Kleiner Perkins Caufield & Byers. “The balance sheet process mitigates a lot of the friction that typically arises when people marshal the facts that support their case while ignoring those that don’t. (See “Kleiner Perkins’ Randy Komisar: ‘Balance out biases.’”)
Use the premortem technique to expand the debate.
“The premortem technique is a sneaky way to get people to do contrarian, devil’s advocate thinking,” explains psychologist Gary Klein. “Before a project starts, say, ‘We’re looking in a crystal ball, and this project has failed; it’s a fiasco. Now, everybody, take two minutes and write down all the reasons why you think the project has failed.” (See “Strategic decisions: When can you trust your gut?”)
Counter anchoring: postpone the introduction of numbers if possible; “reframe” alternative courses of action as they emerge by making explicit “what you have to believe” to support each of the alternatives.
“It’s easy for people to lose track of how much they’ve explained away,” notes Klein. “So one possibility is to try to surface this for them—to show them the list of things they’ve explained away.” (See “Strategic decisions: When can you trust your gut?”)
Pay attention to the use of comparisons and analogies: limit the use of inappropriate ones (“inadmissible evidence”) by asking for alternatives and suggesting or requesting additional analogies.
Force the room to consider opposing views. For vital decisions, create an explicit role for one or two people—the “decision challengers.”
Commit yourself to the decision. Debate should stop when the decision is made.
Connect individually with initial dissenters and make sure implementation plans
address their concerns to the extent possible.
Monitor pre–agreed upon criteria and milestones to correct your course or move on to backup plans.
Conduct a postmortem on the decision once its outcome is known.
Periodically step back and review decision processes to improve meeting preparation and mechanics, using an outside observer to diagnose possible sources of bias.
About the Authors
Dan Lovallo is a professor at the University of Sydney, a senior research fellow
at the Institute for Business Innovation at the University of California,
Berkeley, and an adviser to McKinsey; Olivier Sibony is a director in McKinsey’s
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