Think for a minute ... When you hear the word “consensus,” what comes to mind?
We've helped clients make strategic decisions based on consensus. Most all of the time the clients are familiar with consensus decision-making, but they are not familiar with how to actually apply the method. When we work with clients that want to utilize this method we suggest the following conditions for consensus:
1. Everyone must have the opportunity to present their viewpoint
2. Once someone’s viewpoint has been voiced, they must believe that the viewpoint is understood
3. There must be open discussion on each viewpoint
4. If someone disagrees with a viewpoint, they must do so using logic and fact ... Not, just “I think so”
5. If someone disagrees with a viewpoint, they must present an alternative viewpoint
6. What is decided must be 80% acceptable to all and 100% supported outside the room
7. Once the session is over, no one may say that “I did not support what was decided”
8. All must support to anyone “out of the room”
9. Everyone involved, is responsible for the decision and the output of the decision
Before we facilitate a consensus session we review items 1 - 9 above and then ask two questions: (1) Do you support the suggested conditions for consensus and if not, what are your suggestions? (2) Do you have any other conditions that you would like to add or subtract? Once we align on the conditions we clearly state and write down the decision that needs to be made.
Which of items 1 - 9 do think might be the most challenging from which to abide? Almost all of the clients focus in on item #5 - If someone disagrees with a viewpoint, they must present an alternative viewpoint. Before we get start a consensus decision-making session we make it clear that our one of our primary jobs, as facilitators of their session, is to make sure they abide by the conditions agreed upon by the team. We've had a few people disagree with a peer during a session and in doing so they explained very clearly why they disagreed. Once they finished explaining their position and we made sure everyone understood their perspective, we asked them for an alternative solution. We've had some that were unable to provide an alternative solution - so we all agreed to move on until they could do so. Once item #5 is enforced once, you do not encounter it again.
We also utilize a McKinsey Quarterly article below to discuss "FALSE CONSENSUS."
BEWARE OF THE FALSE CONSENSUS
Charles Roxburgh. Hidden flaws in strategy. THE McKINSEY QUARTERLY 2003. Number 2. https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/hidden-flaws-in-strategy
"People tend to overestimate the extent to which others share their views, beliefs, and experiences—the false-consensus effect. Research shows many causes, including these:
confirmation bias, the tendency to seek out opinions and facts that support our own beliefs and hypotheses
selective recall, the habit of remembering only facts and experiences that reinforce our assumptions
biased evaluation, the quick acceptance of evidence that supports our hypotheses, while contradictory evidence is subjected to rigorous evaluation and almost certain rejection; we often, for example, impute hostile motives to critics or question their competence
groupthink, the pressure to agree with others in team-based cultures
Consider how many times you may have heard a CEO say something like, "the executive team is 100 percent behind the new strategy" (groupthink); "the chairman and the board are fully supportive and they all agree with our strategy" (false consensus); "I’ve heard only good things from dealers and customers about our new product range" (selective recall); "OK, so some analysts are still negative, but those ’teenage scribblers’ don’t understand our business—their latest reports were superficial and full of errors" (biased evaluation). This hypothetical CEO might be right but more likely is heading for trouble. The role of any strategic adviser should be to provide a counterbalance to this tendency toward false consensus. CEOs should welcome the challenge.
False consensus, which ranks among the brain’s most pernicious flaws, can lead strategists to miss important threats to their companies and to persist with doomed strategies. But it can be extremely difficult to uncover—especially if those proposing a strategy are strong role models. We are easily influenced by dominant individuals and seek to emulate them. This can be a force for good if the role models are positive. But negative ones can prove an irresistible source of strategic error.
Many of the worst financial-services strategies can be attributed to over- dominant individuals. The failure of several Lloyd’s syndicates in the 1980s and 1990s was due to powerful underwriters who controlled their own agencies. And over-dominant individuals are associated with several more recent insurance failures. In banking, one European institution struggled to impose effective risk disciplines because its seemingly most successful employees were, in the eyes of junior staff, cavalier in their approach to compliance. Their behavior set the tone and created a culture of noncompliance.
The dangers of false consensus can be minimized in several ways:
1. Create a culture of challenge. As part of the strategic debate, management teams should value open and constructive criticism. Criticizing a fellow director’s strategy should be seen as a helpful, not a hostile, act. CEOs and strategic advisers should understand criticisms of their strategies, seek contrary views on industry trends, and, if in doubt, take steps to assure themselves that opposing views have been well researched. They shouldn’t automatically ascribe to critics bad intentions or a lack of understanding.
2. Ensure that strong checks and balances control the dominant role models. A CEO should be particularly wary of dominant individuals who dismiss challenges to their own strategic proposals; the CEO should insist that these proposals undergo an independent review by respected experts. The board should be equally wary of a domineering CEO.
3. Don’t “lead the witness.” Instead of asking for a validation of your strategy, ask for a detailed refutation. When setting up hypotheses at the start of a strategic analysis, impose contrarian hypotheses or require the team to set up equal and opposite hypotheses for each key analysis. Establish a “challenger team” to identify the flaws in the strategy being proposed by the strategy team."
Making effective decisions utilizing the consensus methodology is hard work. If you are interested to learn more about consensus decision-making, contact Incline Insights, LLC (https://www.inclineinsights.com/contact). Tailored. Focused. Solutions.
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