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FreePeople often make irrational decisions when money is involved. They’ll go out of their way to save 25 cents, say by driving around and around looking for a parking meter with time remaining, yet immediately after blow that much and more without a thought ($4.50 for a latte, anyone?).

Dan Ariely explores such irrational behavior in his book Predictably Irrational. Ariely is a business school professor at MIT, and much of the book describes simple yet ingenious experiments he’s conducted that demonstrate over and over again the consistently illogical behavior of people when making choices. This field of research, known as behavioral economics, stems from the ground-breaking research of Daniel Kahneman and Amos Tversky’s that won Kahneman the Nobel Prize in economics (I’ve been citing Kahneman for years in my talks on cognitive attention and effort, but it seems that every week for the past year I’ve read Kahneman’s name referenced in a different news story, book, or magazine article. Behavioral economics seems to be the hot topic these days). Ariely’s experiments demonstrate the fascinating ways in which people repeatably make decisions that appear to be contrary to common sense.

Ariely details, for example, the powerful allure of something being free. People’s choices change dramatically when items change from being effectively free (costing one cent, for example) to being actually free (costing zero cents). For example, he tells how Amazon’s customers bought more books on average once Amazon started shipping for free on purchases greater than $25—the increase in customer spending far exceeded the amount that they were saving on the free shipping, but they gladly spent more on books to get shipping for free. More puzzlingly, Amazon saw this behavior exhibited worldwide except in France. Was this because the French were more logical in their purchasing behavior? No. The country manager in France decided not to make shipping free but to reduce it to one franc, or 20 cents, which wasn’t a small enough shipping amount to change people’s purchasing behavior. Is 20 cents really a significant amount when buying a $20 book? No. Is a shipping cost of 20 cents effectively the same as 0 cents? For most people,yes. But when the manager in France reduced Amazon’s shipping charge from 20 cents to Free, French customers suddenly increased the amount of books they purchased per order by the same amount as the rest of the world.

The reason that I am writing about Predictably Irrational is to contest an explanation that Ariely gives for his first example, and one of the most interesting, of irrational behavior. In the example, Ariely describes an offer that I’ve seen before but never understood, which made me even more interested in his explanation (and my alternative one).

Ariely noted an ad in the Economist magazine that offered three different types of subscriptions:

  1. an electronic subscription for $59;
  2. a print subscription for $125;
  3. a print and electronic subscription for $125.

That’s right, the price for a print-only subscription was the same as the price for a print&electronic subscription. Why would they bother offering the print-only option when it was clear that no one would select it because they could get both the print&electronic versions for the same price? Being the good researcher that he is, Ariely decided to run some experiments to determine if there was a reason why the Economist made this offer (Ariely’s ability to set up simple experiments to provide insight into unusual behavior is fascinating).

Ariely asked two different groups of students to make a selection among a choice of Economist subscriptions, but each group were given a different list of options. One group was given the same three selections that the Economist offered. The percentage of students who selected each option was as follows:

  1. electronic: 16%
  2. print: 0%
  3. print&electronic: 84%

No one chose the print-only option (not surprisingly). This begs the question of why one would offer that option at all (the same question that motivated this experiment).

For the second group, the unchosen print-only option was removed and only the electronic subscription and print&electronic subscription were offered (still priced at $59 and $125, respectively). One might expect results similar to those from the previous group (16% for electronic and 84% for print&electronic) since there wasn’t any interest in the print-only option that was removed. The results for this second group were as follows:

  1. electronic: 68%
  2. print & electronic: 32%

Without print-only as an option, the number of people interested in the print&electronic option dropped from 84% to 32%! In other words, by offering an option that no one wanted, 52% of the people changed their preference from electronic-only to print&electronic at a $66 higher cost. What’s going on here?

Ariely’s explanation was that people need a basis for comparison when evaluating whether a deal is a good one or not, and from this comparison they make their decisions. With a similar item for comparison, they can assess the value of an item and determine whether that item is a good or bad deal. He gives a couple fascinating examples where the choices that people make are biased by the presence of a similar and inferior alternative. If people are choosing between A and B, they will choose A more often if there exists a third alternative similar to but inferior to A, and they will choose B more often if there exists a third alternative similar to but inferior to B. Having that third alternative allows people to say to themselves, “I can’t judge whether A or B is a better choice, but I know that A is better than this similar third alternative, so A must be a good deal.”

Ariely suggests that this is why the selection for print&electronic is high when print-only is offered for the same price—the print-only option gives people an alternative from they determine that print&electronics is a better deal, and that drives their choice.

I believe, however, that there’s another possibility for these results: people are more likely to select the print&electronic option in the presence of a print-only option because of the Free phenomenon. Let me explain.

Ariely’s explanation is partly correct: in the absence of knowing the cost of the print-only subscription, people cannot judge whether the combined subscription is a good deal or not. Maybe print-only was $66, and the cost of print&electronic was simply the sum of the costs of the individual subscriptions ($59+$66=$125). Or maybe print-only was $100 and getting the combined subscription would save $34. Or maybe print-only was also $50 and $125 for print&electronic was a rip-off. No one can tell whether both together is a good deal in the absence of a print-only option—in that, Ariely is correct.

The fact that the print-only and print&electronic options are priced the same, however, suggests another explanation for the large difference in behavior between whether or not the print-only option is offered. Ariely made the convincing case later in his book that getting something for free can have a hypnotizing allure on people’s decisions. Providing a print-only option at less than $125 probably would not be enough to drive such a large percentage of people to change their selection from print-only to the more expensive print&electronic option—the print-only option had to be priced at exactly same same price as print&electronics so that the electronics version was free if they chose both. It was the identification of something free that made such a large percentage of people select the print&electronic option. This is similar to the phenomenon observed by Amazon: 20–cent delivery didn’t change behavior but free delivery did. Given the convincing case that Ariely made for this free effect, one would probably have predicted that people would switch their decision from the electronic-only option to the print&electronic option when they discovered that the latter choice would get them the electronic version for free.

So, now you know why so many ads offer free cheap items if you purchase an expensive product A free month of HBO if I get the Lifetime Triple Gold package of cable—sign me up!

Strategic Intuition: an interview with author William Duggan

Strategic_intuition
Much has been written about innovation and the creation of new business and technology ideas. Little has been written about how a person makes that creative leap to come up with something new an valuable, the process that leads to the “Aha” moment.

Columbia Business School professor William Duggan has written about just this topic in his new book Strategic Intuition. I conducted an e-mail interview with Prof. Duggan to talk about the themes of his book, with a focus on the relevance of his ideas to entrepreneurs and startups.  First, though, here’s a brief introduction to his book.

Duggan describes the importance of strategic innovation right at the start:

It’s how innovators get their innovations, how artist get their creative ideas, how visionaries get their visions, how scientists make their discoveries…

Duggan is talking about not just any new idea but ones that are potentially game-changing, ones that seemingly come out of the blue and have a profound impact.

Duggan starts his book off by differentiating strategic intuition from the expert intuition that Malcolm Gladwell detailed in his bestseller Blink. Duggan goes on to describe how strategic intuition is achieved and how it is necessary for developing creative leaps into unexplored territory. He does so by investigating how strategic ideas get created through an examination of such diverse topics a Napoleon’s wartime strategy, Thomas Kuhn’s theory of scientific breakthroughs, and Buddha’s enlightenment. Duggan then discusses how strategic intuition has been applied in some well known and not-so well known business and political situations.

The following is the e-mail conversation that I (BE) had with Prof. Duggan (WD).


BE: Clausewitz, Kuhn, and Buddha are not obviously connected to each other or to business strategy. What was the inspiration to make these connections when preparing your book Strategic Intuition?

WD:  I noticed in reading that all three explain that good ideas come to you in the same way:  as flashes of insight.  Previous elements come together in your mind in new combinations.  They all talked about different subjects:  Clausewitz on military strategy, Kuhn on scientific discovery, Buddha on personal enlightenment.  So the content of the ideas is different in each field.  But the method of the good ideas forming is amazingly similar in all three.   

BE: In war, chess, and other disciplines, strategy and tactics go hand-in-hand. What is the relationship between tactics and strategic intuition, and how do tactics relate to what you call expert intuition?

WD:  The quick retrieval of the right tactic in the right situation is the essence of expert intuition.  An emergency room nurse is just walking by, glances at a child, and swings into action to save the child’s life.  The nurse can act so fast because she has seen that ailment before in some form, and her training or experience told her the right tactic to use.  Strategic intuition is different from this in three key ways.  First, it applies to new situations.  Second, it’s slow.  Third, it brings together many tactics in a new combination. 

BE: So simply put, expert intuition enables tactical action, while strategic intuition enables strategic action. In your book, you state that “Expert intuition works for familiar situations…But strategic intuition works for the unfamiliar” (p.7).  Your thesis here is that the application of intuition built from years of experience, such as that described in Gladwell’s book Blink, will not lead to innovations that can be provided by strategic intuition. People often try to apply their expert knowledge to new situations, thinking that insight from their own field of expertise will provide new and useful guidance to these new fields. Entrepreneurs often do this, and certainly venture capitalists rely on their own expert intuition when assessing new technologies and business plans. How can an entrepreneur tell when they are inappropriately applying their expert intuition and when their “flash” of insight is the result of a breakthrough from strategic intuition?

WD:  It’s entirely possible that some of what worked in field A will work in field B.  But you improve your chances if you also draw from field C, D, E, F, G and so on.  So you cannot set out blindly to apply field A to field B.  But it does often happen that you’re just going about your business in field A and it strikes you how to apply it to field B or C or D.  That’s good.  For example, Henry Ford got the idea to turn a stationary assembly line into a moving assembly line from the overhead rail of a slaughterhouse.  But he did not set out, as a planning exercise, to apply slaughterhouse ideas to carmaking.  That would be crazy.  So the moral is:  keep your mind open to using an idea from any field in any other field.  And notice that Ford was no expert on slaughterhouses.  You can borrow many ideas without any direct expertise at all in that field – which is another big difference from expert intuition, where everything depends on lots of direct practice. 

BE: That makes me think of a lesson I learned from a successful serial-entrepreneur in Silicon Valley: that startups often innovate by taking technology that is mature in one field and introducing it to a field in which that technology currently doesn’t exist, doing so at the moment when the market is ready for that unique technology transplant. You highlight this concept when discussing Thomas Kuhn’s The Structure of Scientific Revolutions. You note that “the common idea of how a leap of progress happens is a leap of imagination. Kuhn gives us an alternative to imagination…a selective combination of elements from the past makes something new. The elements themselves are not new” (p.16). It seems that many inventors and entrepreneurs develop innovations in ways similar to what Kuhn describes. The challenge is being able to identify those cross-disciplinary connections and to see the breakthrough that can arise from combining those previously unlinked technologies. What are your thoughts on whether these approaches by startups and entrepreneurs make them more naturally inclined towards strategic intuition than established market-leading companies?

WD:  I don’t think people in startups and new companies have better ideas than people in big companies.  I do think big companies make it harder to change direction, and most good ideas mark some kind of change of direction.  So it’s easier for a good idea to come true in smaller companies.  This is why I personally try to work mostly with big companies.  They have elaborate methods for generating and implementing ideas that run completely counter to how flashes of insight really happen.  When someone in a big company has a great idea, the company is already lumbering along a different path, and some top executive will have to admit that there is a better idea now and we need to spend a lot of money to change direction.  You can see why that seldom happens.  But it’s within the power of companies to make it happen.  That’s where I try to help.

BE: Are you familiar with IDEO’s approach of iterating customer observation and rapid prototyping as a way to gain insight into product use and to develop product innovations? Their approach seems to be a variant of Kuhn’s stages of scientific breakthrough.

WD:  There’s a wonderful book by Andrew Hargadon, How Breakthroughs Happen, that shows how IDEO draws existing elements from very different fields to make a new combination.  That’s exactly strategic intuition, and I think that’s the heart of their success.  Customer observation and rapid prototyping are good, but many companies do that.  I think what Hargadon points out is the most important piece of the puzzle.   

BE: Do patents embody strategic intuition or expert intuition—or do these concepts of intuition not apply to patent development?

WD:  The patent system is in chaos because better information – chiefly the internet – lets everyone trace backwards all the elements that you combine for a new patent.  So the people who did each element claim a piece of the new patent pie.  I think inventions are almost always strategic intuition in action, not expert intuition.  By definition it’s a new combination rather than a repeat of the same tactic in the same situation.

BE: In the traditional scientific method, one develops a hypothesis and then proves or disproves that hypothesis through experimentation. Kuhn points out that scientific breakthroughs do not occur though the scientific method; rather, breakthrough ideas occur after the assimilation and analysis of information, then experiments prove the truth of the breakthrough idea, and finally hypotheses are developed to explain the results. How do these concepts relate to innovation in business? One might view the traditional scientific method as akin to the market-research approach to business strategy: define a product offering based on knowledge of current customer demands, prove those demands with market research, then release the new product. Clayton Christiansen might call this incremental innovation. Kuhn’s scientific breakthroughs could be viewed as disruptive or radical innovations, where ideas are not readily apparent from current customer and market trends. Startup companies can be particularly adept at the equivalent of Kuhn’s approach because they typically have the breakthrough idea, take it to market, and then understanding the market and customer needs after assessing the success of the product.

WD:  The traditional scientific method does not start with a hypothesis.  That’s the experimental method, which is step 2 of the scientific method.  Step 1 of the scientific method is the work you do before you come up with a hypothesis and the experiment to test it.  And scientists know how you start that first step:  look in the laboratories of other scientists.  So whenever someone wins the Nobel Prize, ten other people come forward to say they did this and that piece of the work.  As in the patent system, that’s true.  So yes, starting with market research is a version of the experimental method, not the scientific method.  Market research should come after you have your new idea, because otherwise you have no idea which market to research, and you can spend a fortune researching exactly the wrong market. 

BE: Thanks for the clarification. Speaking of right and wrong markets, one strategy for finding new markets is Blue Ocean Strategy (BOS), described by Kim and Mauborgne in their book of the same name. Where do the concepts of strategic intuition intercept with the strategy of developing a business in an uncontested marketplace? The BOS concept seems at odds with the advice from Clausewitz, in that BOS advises not to compete directly in a fight for market share but to move to a battlefield where the enemy doesn’t even exist.

WD:  BOS makes the correct observation, after the fact, that the best business ideas create new markets rather than compete within existing markets.  But BOS does not tell us how to get an idea that creates a new market.  In fact, it leads you down exactly the wrong path, by telling you first to identify a new market with nobody in it.  That’s actually a recipe for losing a lot of money, because by far the overwhelming majority of markets with nobody in it have nobody in it for a very good reason:  there’s no money to be made there.  Let’s take Microsoft:  after the fact, we can see that they were the world’s first company to specialize in operating software, when there was nobody else in the market.  But did the idea for Microsoft come from first identifying that empty market?  Of course not.  Bill Gates and Paul Allen had no idea that operating software would be a big business until after their first success – BASIC for the Altair – which they put together from existing elements that were within the grasp of millions of computer geeks at the time.  Their flash of insight brought those previous elements together.  Then they realized they were first in a new market.  First the flash.  Then the blue ocean.  Not the other way round.

BE: “First the flash…” This is one of the main points of your book: that the flash is an acknowledged part of innovation, yet no one before has explained fully what is required to spark that flash. That’s where strategic intuition comes into play. You state, “What triggers active problem solving is the ability to recognize when a goal is achievable…There must be an experiential ability to judge the solvability of problems prior to working on them” (p.47). This speaks to the need for experienced management teams on startup companies proposing breakthrough technology, and experienced teams are something that venture capitalists look for in companies that they are considering for investment. It also speaks to the need for researchers to immerse themselves in their field of investigation if they want to develop their own breakthrough ideas. Yet it is often thought that someone with no experience in a specific industry might bring fresh eyes to problems and not be restricted in their thinking by common wisdom and past assumptions, i.e., they do not have expert intuition for that field. Is this thinking naïve or wishful thinking?

WD:  That quote is from Gary Klein, the world’s leading expert on expert intuition.  But as to your question:  I think the confusion comes from the meaning of “experience.”  Napoleon won his first battle against terrific odds without any previous combat experience.  Yet he had studied all the major battles of history, and so had all the experience of previous generals to draw on.  Expert intuition requires direct experience.  Strategic intuition requires knowledge, which you can get from reading or talking to people.  So yes, someone with no experience in an industry can bring fresh eyes to it.  But it’s unlikely that someone with no knowledge of an industry can do the same.  So someone from the slaughterhouse industry could bring a fresh idea to Henry Ford, who was already in the car business.  But someone has to know the car business too, to understand why the moving rail is such a good idea.  So I guess that argues for insider/outsider teams, where one person knows the industry and someone else brings fresh eyes.  The problem there is that their fresh eyes might not be the ones you need.  So imagine that Henry Ford brought in someone from the shipping industry, not the slaughterhouse industry.  There’s no way to predict which fresh eyes you need.  That’s why my favorite formula is someone with deep industry knowledge who consciously opens their mind to drawing from other fields – like Henry Ford himself. 

BE: I agree completely with what you say. I’ve found that some of the most innovative people I know are those who have a wide variety of intellectual interests and look for inspiration from outside of their field of expertise. How should these people, or any entrepreneur attempting to develop new technology, think about Clauswitz’s decisive point when considering their own business strategy?

WD:  The key to the “decisive point” is the contrast with the “objective point.”  Like everyone else, an entrepreneur must set goals.  But never think they’re set in stone.  An example is Puma, which Jochen Zeitz took over when it was a small, failing shoe company.  He made a tough four-year plan to outsource production and streamline operations.  A year into it, the Beastie Boys wore one of his styles at a concert – the Clyde – and the shoes sold out overnight.  It was a decisive point:  he realized he had a fashion sports apparel company, and threw out his objectives.  The decisive point is where you win.  The objective point is just your current guess on where your latest idea will take you. 

BE: Right, and Zeitz’s strategic intuition enabled him to identify that decisive point and take action. In a completely different field from military strategy, photographer Henri Cartier-Bresson talked about the decisive moment defining creative success in photography: “There is a creative fraction of a second when you are taking a picture. Your eye must see a composition or an expression that life itself offers you, and you must know with intuition when to click the camera.” The decisive point and the decisive moment seem to be similar concepts, both requiring experience from which intuition is drawn, the presence of mind to be looking for the breakthrough, the actual epiphany, and finally the execution.

WD:  My guess is that Cartier-Bresson is talking about expert intuition in that subset of professional fields where there is a lot of waiting and then quick action.  Hitting a baseball is similar.  Martial arts have a whole philosophy and discipline for this.  It shades into strategic intuition if the situation is new enough – perhaps if Cartier-Bresson takes on a new subject, a hitter faces a new pitcher, or a samurai confronts a new enemy.  Napoleon spoke in terms similar to Cartier-Bresson’s about the moment when you make your decisive move in a battle – that is, when the decisive point appears. 

BE: Miss that moment, and you risk failure. One builds up strategic intuition, in a way, to be prepared to take advantage of that decisive moment when it occurs. Do you believe that everyone has the ability to have strategic intuition—to innovate and create that flash of insight that combines elements from the past into something new? How can a company identify individuals who are better at this than others? What steps can be taken to successfully promote the development and application of strategic intuition?

WD:  My own view is that strategic intuition is an ordinary function of the human mind.  Can some people do it better than others?  I have no idea.  We have no way to measure.  Ray Kroc was 52 years old, struggling to sell milkshake machines, when the idea for McDonalds struck him in a classic flash of insight – he called it an “Idaho potato” hitting him on the head.  The day before you would think he had no strategic intuition at all.  The day after, you’d think he had a lot.  Did his capacity for strategic intuition change overnight?  I doubt it.  I do have a survey that shows how close people think to the basic ideas of strategic intuition, so companies could use that, but how you answer a survey and what you do in action are two very different things.  So I’m not sure how to identify people with more strategic intuition.  But I think I know how to promote the development and application of strategic intuition:  that’s what my whole book is about.  First, learn what strategic intuition is.  (That’s in the book.)  Second, apply tools that use it.  (Those are in the book too.)  Third, stop using other tools that inhibit strategic intuition.  This third step is the hardest, and that’s why big companies suppress strategic intuition so much. 

BE: You quote from Napoleon’s memoirs: “I bent my policies to accord with the unforeseen shape of events” (p.76). One common characteristic among many successful startups in Silicon Valley is their flexibility towards their business strategy.  Startups often reach unanticipated roadblocks and their ability to readjust their business plan with decisiveness—to find new applications or customers for their technology and abandon their original business plans–can determine whether they will succeed or fail.  You note that, “He [Napoleon] passed up more battles than he fought, looking for only those he could win” (p.172). This speaks to the need for startups to narrow their focus on what they are trying to achieve. Venture capitalists shudder when they see a business plan with multiple markets being addressed because this indicates a lack of focus for the startups inherent limited resources. Are restricted focus and strategic constraints necessary for the successful application of strategic intuition?

WD:  I think this is actually easier than it looks.  It’s very rare for a business plan to include the most important thing:  what previous elements combined in the entrepreneur’s mind to make up the new idea.  Since that’s not in the business plan, the VC must ask the entrepreneur in person.  If there’s a good answer, the VC will then have as good an idea as the entrepreneur of what markets the idea might or might not fly in, at least to start.  Then as the entrepreneur wants to change strategy, the VC will be up to speed to understand why. 

BE: This being a blog about innovation, I have to ask the obvious question: what is the relationship between strategic intuition and innovation?

WD:  Strategic intuition is how successful innovation happens.  I’ve studied countless cases, and when there was enough information to identify the source of the actual idea for innovation, it was always strategic intuition.  It’s really a simple idea:  for something complex to work, each piece that makes it up has to have worked before, in some way, sometime, somewhere in the world.  Innovators don’t dream – they combine.  How else could it possibly work?

BE: Our discussion has only scratched the surface of the material and insight provided in your book Strategic Intuition. I recommend to those readers of this blog who have found these topics interesting to seek out the more in-depth discussions in your book. Thank you, Bill, for what has been for me a fascinating discussion. Best wishes, and good luck with your book.

Negotiation Strategies

HandshakeI’ve been interested in negotiation strategy for a while. In some ways it embodies many characteristics that are rare in scientific research, with a focus on human interaction and an unambiguous concluding point where success can be measured relatively directly. I can understand why some people thrive on it and why some people are terrible at it. It has more in common with courtroom battles than the scientific method, yet it has significant room for innovation to take play.

There was an interesting article a month ago in the Harvard Business Review on negotiating that caught my eye. The authors outline basic principles from their new book, Negotiation Genius, that provide guidance towards understanding the person/company with whom you are negotiating.

I found this article interesting because it gives more than the basic negotiating advice of understanding your counterpart so that you can drive to a win-win scenario. This basic win-win approach is, of course, an important concept to start with because people often approach negotiations as a poker game where one is trying to win as much of the pot as possible while not reveal any of their cards, with the assumption that the other side is playing the same game and trying to win as much as they can at your expense. The false assumption with this approach is that only way to win is for the other side to lose. The first step towards a successful negotiation is to realize that to be successful, both you and your counterpart must achieve your separate goals—hence, the win-win objective.

One has to understand the objectives of the other side to know what a win-win is, and the authors of this article expand upon this concept by pointing out that often negotiations stall because one side makes incorrect assumptions about the needs and motivations of the other side. The authors provide a few case studies that they have developed to test business students in which the majority of the students make wrong assumptions and therefore drive the negotiations to solutions that cannot succeed:

They are solutions to a problem that has not been diagnosed.

The authors outline how to conduct investigative negotiation, their term for the active pursuit of information about the needs of one’s counterpart in the negotiation. The five steps that they outline are (in their words):

    1. Don’t just discuss what your counterparts want—find out why they want it
    2. Seek to understand and mitigate the other side’s constraints
    3. Interpret demands as opportunities
    4. Create common ground with adversaries
    5. Continue to investigate even after the deal appears to be lost

The authors provide business case examples for each of these steps that make them more intuitive. They finish with tips on how to get information out of distrustful negotiators who don’t readily explain the reasons behind their own negotiating position. All very useful stuff.

Some of this reminds me of the work of Vantage Partners, a consulting firm with origins at the Harvard Law School when the founders were asked by the Carter administration to help with negotiations between Israel and Egypt at Camp David in 1979. Their directors have published several books, including Getting to Yes. Vantage stresses the need for a thoroughly understanding of the motivations on the other side, and emphasizes the possibility that each side has a different set of values that is driving their behavior. Vantage has expanded their expertise to business collaborations, explaining with data why collaborations between different businesses typically fail, and providing guidance on how to conduct a successful collaboration. There is a set of white papers from Vantage Partners on these topics that I highly recommend, including a huge set on managing alliances.

Buy the Investigative Negotiation article here from Amazon:

Decision Making, Groupthink and Scientific Debate

The January issue of the Harvard Business Review is on decision making, and they cover an array of issues on this topic.  One aspect that got me thinking was the area of group decision making. They point out the dangers of decisions by consensus where decisions are easily made without conflict or debate. HBR points out the relevancy of "groupthink," a term coined by a psychologist in 1972 and which Wikipedia describes as follows:

In a groupthink situation, each member of the group attempts to conform his or her opinions to what they believe to be the consensus of the group. In a general sense this seems to be a very rational way to approach the situation. However this results in a situation in which the group ultimately agrees upon an action which each member might individually consider to be unwise.

When I think back on strategic decision-making meetings that I’ve been involved in, the least satisfying ones were those where no competing concepts were debated or given serious discussion. By "debated" I am not referring to a simple identification of alternatives followed by agreement (or silence) by everyone that the alternatives should be dismissed ("Okay, Plan A is consistent with our corporate approach. Well, let’s consider Plan B–no one likes that one, do they?" <play cricket_sounds.wav>). The legal system is (simplistically speaking) designed to place opposing viewpoints against each other and let the best one win–respect for this conflict-resolution approach in business could benefit corporate decision making processes. Unfortunately, concepts and viewpoints that conflict with a company’s norm are often immediately shot down as absurd or obviously not worth consideration (see my post on the No Instinct and Bill Kinnon’s on the Idea-Killing Manager).

When I consider healthy discussions that take place in the scientific world, vigorous debate (or at least consideration) of opposing alternatives is critical for the successful development of ideas and identification of promising new areas of research. The ideas that withstand critical challenges from colleagues end up being the most robust and strongest theories. The best scientific labs that I’ve experienced have regular meetings where no assumptions go unchallenged, and alternatives to the consensus thinking are given serious consideration, with everyone in the lab actively participating in this process. If there is a debate over a point or competing hypotheses are uncovered in the lab meeting, people follow up with research/analysis that allows the different hypotheses to be proved or disproved–or at least enough evidence is gathered to indicate clear support of one hypothesis over the others. This approach often leads to whole new lines of funded research, the equivalent of creating a new product line or market.

Now, think about decision-making business meetings in which you have attended. First, how many of them consisted of a couple people doing all of the talking, with the other people contributing nothing to the discussion–their silence an implicit agreement with whatever the primary speaker concludes? Ever wonder why those silent people were in the meeting in the first place? Some may be there as legitimate observers, simply absorbing information to relay to their group or to incorporate into their own group’s process. Most of the silent ones, however, probably have something to say but learned a long time ago that comments contrary to the company’s normal viewpoint are quickly dismissed or given lipservice. Those people who sit silently keeping their ideas to themselves have become "obsolete".

Second, when was the last time that someone followed up on a competing idea by analyzing it and reporting their results back to those who were in the meeting? Rather than summary dismissals meted out to novel concepts or challenges to status quo thinking, one or more people should be tasked to develop the idea further until the evidence supports or disproves the value of the novelty. Spend a little time and ignore the No Instinct. I’m going to guess that people might complain that this requires time and resources that people don’t have, but that excuse has become a routine defense for all inaction these days. Doing the extra work necessary to come to conclusions is what put IDEO on the map. They don’t make critical design decisions by spending 30 minutes sitting around a conference table looking at options on  PowerPoint slides (remember the last time that you sat in a meeting where everyone looked at 5 different designs on a projector or hand out, then everyone agreed on the preferred design–the final decision based on a single inactive graphical representation), IDEO creates several different prototypes and spends time observing and documenting user interactions. A process that requires time and resources, but allows IDEO to optimize their design-decision process.