Group Decision-Making is Really Hard
Whom should we hire, promote or fire? Who should we put on this proposal writing team and what should we propose? I’ve made or participated in such group decisions hundreds of times and I’ve never felt confident in the process or the outcome. Did we come up with the right alternatives, in sufficient number? Did we weigh the alternative outcomes according to their expected costs, benefits and probabilities, relative to common values and objectives? Was the process too political, dominated by one extroverted or senior individual, or ended arbitrarily?
Hiring Decisions are Just the Worst
At several points in my banking career, I ran the process of hiring new analysts, an entry-level position for graduates of elite colleges. We would accumulate hundreds of resumes, select our favorites, do some on-campus interviews. We’d invite those candidates that made the cut using a subjective process to our offices to interview with several senior and mid-level bankers. None of us received formal training in interview techniques. The process culminates in a conference room, where we would informally discuss and select the candidates to get job offers.
How Many Ways Can We Get it Wrong?
We never kept statistics on how well these candidates ultimately did, but I’m not confident in our accuracy. At every stage, unconscious bias could limit the quality and diversity of candidates. There was little reliable information about the criteria for a successful hire or how to measure each candidate against those criteria. In the final selection meeting, there were usually one or two people with strong opinions and many who deferred or kept quiet. I’ll never forget the one hire who was perfect on paper and perfect in interviews: but quit the firm after three weeks. This person reminded us of previously successful hires (availability heuristic), the sunk cost fallacy made us loath to keep looking for candidates and groupthink made it hard to challenge the consensus.
Decision Analysis to the Rescue!
Our hiring of this person was a clear failure of group decision-making. A bit more structure would have helped reduce complacency, encourage the participation of everyone, surface conflicting views, get everyone invested and improve the quality of our decision. Two of my favorite processes are:
- Nominal Group Technique: people work alone to evaluate alternatives and communicate views through a facilitator, not to each other, to retain anonymity. The group narrows alternatives by several rounds of voting. This may work better for less cohesive groups who can accept a good-enough decision (satisficing).
- Reflective Thinking Technique: more cohesive groups who want to optimize their decision can benefit from this approach based on the philosophy of John Dewey. The group agrees on the problem statement, values and criteria, evaluates each alternative very carefully with respect to risk and reward and selects the best option by consensus.
Decisions are less important than decision-making. (With apologies to Dale McConkey)
I think we could have tried harder in advance to get good candidates by reducing unconscious bias. For example, we could redact the candidate’s names from the resumes in the initial selection. I also believe that organizations should keep good records and analyze the outcomes of prior hiring and other regularly made decisions to improve learning and accountability. I also think it would help to assign one person the role of devil’s advocate to keep us true to our values and objectives without risking working relationships.
Peril and Promise
In many respects decision-making in groups is harder than alone. Politics, power and bias can result in worse decisions than alone (Bay of Pigs invasion, Challenger disaster, New Coke…) However, there is great potential for group decisions to benefit from synergies in terms of idea generation, outcome analysis and critical thinking that expands the bounds of our rationality as individuals. The promise of decision analysis is to unlock this potential of collaborative decision-making.
P.S.
Please sign up here to help us test our upcoming web app that helps people decide how much they can afford to spend on a new home.
Sources:
Formal Procedures for Group Decision Making
Group Decision-making
Organizational Use of Decision Analysis