Wiser

Getting Beyond Groupthink to Make Groups Smarter

Cass R. Sunstein, Reid Hastie

• Publisher: Harvard Business Review Press
• Year: 2014
• Print ISBN: 9781422122990
• eBook ISBN: 9781625270504
• Topic: Business
• Subtopic: Decision Making
• Index: Business

Why are group decisions so hard?

Since the beginning of human history, people have made decisions in groups—first in families and villages, and now as part of companies, governments, school boards, religious organizations, or any one of countless other groups. And having more than one person to help decide is good because the group benefits from the collective knowledge of all of its members, and this results in better decisions. Right?

Back to reality. We've all been involved in group decisions—and they're hard. And they often turn out badly. Why? Many blame bad decisions on "groupthink" without a clear idea of what that term really means.

Now, Nudge coauthor Cass Sunstein and leading decision-making scholar Reid Hastie shed light on the specifics of why and how group decisions go wrong—and offer tactics and lessons to help leaders avoid the pitfalls and reach better outcomes. In the first part of the book, they explain in clear and fascinating detail the distinct problems groups run into:

• They often amplify, rather than correct, individual errors in judgment
• They fall victim to cascade effects, as members follow what others say or do
• They become polarized, adopting more extreme positions than the ones they began with
• They emphasize what everybody knows instead of focusing on critical information that only a few people know

In the second part of the book, the authors turn to straightforward methods and advice for making groups smarter. These approaches include silencing the leader so that the views of other group members can surface, rethinking rewards and incentives to encourage people to reveal their own knowledge, thoughtfully assigning roles that are aligned with people's unique strengths, and more.

With examples from a broad range of organizations—from Google to the CIA—and written in an engaging and witty style, Wiser will not only enlighten you; it will help your team and your organization make better decisions—decisions that lead to greater success.

PART 1

How Groups Fail

CHAPTER 1

From High Hopes to Fiascos

When managers and other leaders are deciding how to proceed, they usually talk the problem through. But why, exactly, is it helpful to talk the problem through? Why and when is deliberation important or even desirable?

A big part of the answer must be that if people talk to one another, they will end up with wiser judgments and better outcomes. But does deliberation actually have this effect? This is a crucial question, and an empirical one, which cannot be answered by intuition or anecdotes. By imposing pressure on one another, group members may reach a consensus on falsehood rather than truth. A group of like-minded people, prone to error and with similar inclinations, is particularly vulnerable to this problem. If a bunch of people think that a complex government program is going to work immediately or that an untested, new product will be a big hit, we might have a bad case of happy talk.

To explain why groups go wrong when they deliberate, we investigate two types of influences on group members. The first type involves informational signals, which lead people to fail to disclose what they know out of respect for the information publicly announced by others. In the federal government, for example, people might silence themselves because they think that an official who does not share their views and who has his own information must be right. If the secretary of defense has a strong conviction about whether military intervention is a good idea, the people who work for the secretary might shut up, not because they agree, but because they think that the secretary probably knows what he is doing.

In the private and public sectors, leaders often seem to have a halo, which makes them appear unusually sharp and smart. Their jokes are funnier, their wisdom is wiser, their perspective wider, their questions more probing. In government, Sunstein noticed exactly this phenomenon, with civil servants occasionally treating his own tentative and insufficiently informed judgments as if they were far cleverer than they actually were. The halo can be fun to experience, especially if you have an ego, but it is also a real problem. It encourages happy talk and makes the group more likely to err. Anxious employees provide an important corrective, because they are willing to wonder whether the leaders are right. And if the leaders themselves are anxious—if they have a smile and personal warmth but also a troubled little voice in their heads asking, What am I missing here?—they will make their groups better.

The second type of influences involves social pressures, which lead people to silence themselves to avoid various penalties. In many cases, what matters is the mere disapproval of others, but if those others are important, the disapproval could lead to serious personal risks. Within firms, people often stay quiet and decline to disclose what they know, not because what they know is unimportant, but because they do not want to seem foolish or disagreeable. They are especially unlikely to speak up if the leaders or most others in the group seem to have a clear conviction. Is it really worthwhile to make the boss sad or mad?

From the boss’s point of view, the answer should be yes, because the boss might learn something. But some bosses don’t see things that way, and many employees know that it might well be better just to shut up. Here again, the right kind of anxiety can go a long way, because anxious employees will not worry much about social pressures and because anxious bosses welcome a wide range of views.

As a result of these two types of influences, groups run into four independent problems:

• Groups do not merely fail to correct the errors of their members; they actually amplify those errors.
• Groups fall victim to cascade effects, as group members follow the statements and actions of those who spoke or acted first, even if those statements and actions lead the group in unfortunate, terrible, or tragic directions.
• Groups become more polarized, ending up in more extreme positions in line with the predeliberation tendencies of their members—such as when a group of people, inclined toward excessive optimism, becomes still more optimistic as a result of internal discussions.
• Groups focus on shared information—what everybody knows already—at the expense of unshared information and thus fail to obtain the benefit of critical and perhaps troubling information that one or a few people have.

Because of these problems, groups often fail to achieve their minimal goals of correcting individual mistakes and aggregating the information actually held by their members. A confident, cohesive, but error-prone group is nothing to celebrate. On the contrary, it might be extremely dangerous both to itself and to others. A promising start-up may fail as a result. A government agency might waste taxpayer money; a new federal program might fail. A large business may continue on a badly mistaken course, even though it should have pulled the plug long ago. A law firm might press a doomed litigation strategy. When groups make poor or self-destructive decisions, one of these four problems is usually the explanation.

Positive Prospects

All over the world, deliberating groups start with high hopes. They’re especially likely to be hopeful if each member thinks well of the others—if people are friendly, respectful, and engaged with one another socially as well as professionally. And while we will spend a lot of time showing why optimism about group decisions is often wrong, it is sometimes right. If deliberating groups do well, we can imagine three principal reasons.

1. Groups are equivalent to their best members. One or more group members might know the right answer, and other members might become convinced that this answer is right and therefore accept it. If group members are listening, the group will perform at the level of its best members. If many or at least some members suffer from ignorance or from a form of bias that leads to error, others should correct them. Deliberation can fix individual errors rather than propagate them in a way that allows the group to converge on the judgment of its wisest or most accurate member.

Imagine, for example, that fifteen people are trying to make some prediction about the likely fate of some product, and that one of the fifteen is both an expert and a superb prognosticator. Maybe the other group members will quickly see that they have an expert in their midst, and they will follow this person’s lead. Consider “eureka” problems, in which the right answer, once announced, is clear to all. A trivial example: Why are manhole covers round? Answer: Because if they were almost any other shape, a loose cover could shift orientation and fall through the hole, potentially causing damage and injuries. (Of course!)

There are less trivial cases, requiring clever solutions to seemingly intractable problems, where the solution, once announced, is immediately clear to all. For such problems, groups should be expected to agree on the answer as announced by the member who actually knows it. Someone may know, for example, that a new tablet or cell phone has a fatal (but subtle) flaw, or that a website just isn’t ready for prime time, or that a military strike is unlikely to have its intended effect.

2. The whole is the sum of the parts: aggregating information. As Aristotle suggested, deliberation could help people to share existing information in a way that leads the group as a whole to know more than any individual member does. Suppose that the group contains no true experts on every aspect of a question, but that helpful information is dispersed among the members so that the group is potentially expert even if its members, considered individually, are not. Well-functioning companies often create cross-functional teams to aggregate information in just this way. If everyone is working together and listening to one another, the organization will be able to aggregate information to get a full picture of, for example, the effects of a proposed rule designed to reduce air pollution from power plants.

Or suppose that the group contains a number of experts, but that each member is puzzled about how to solve a particular problem. Deliberation might elicit the relevant information and allow the group to make a sensible judgment. In this process, the whole is equal to the sum of the parts, and the sum of the parts is exactly what is sought. No member can have all the parts.

When a group is trying to solve a crossword puzzle, something of this kind often occurs, as different group members contribute what they know. Many problems are like crossword puzzles in the sense that small groups do better than individuals, and large groups do better than small ones—simply because each person knows something that others do not, and it is easy to share and combine the dispersed information. As we will see, social media and prediction markets often do well for similar reasons.

3. The whole goes beyond the sum of the parts: synergy. The give-and-take of group discussion might sift information and perspectives in a way that leads the group to discover an innovative solution to a problem—a solution in which the whole is actually more than the sum of its parts. In such cases, deliberation is a powerful form of information aggregation, through which the exchange of views leads to a creative answer or solution. If a group is seeking to improve the design of an automobile, a tennis racquet, a tablet, or a cell phone—or to come up with the right response to a threat to national security—the exchange of ideas can produce creative solutions that go far beyond any simple aggregation of what group members thought before they started to talk. The same is true if people are trying to write a play together or to come up with a sensible policy to deal with the problem of childhood obesity. And in fact, groups can be highly innovative, especially if divergent thinking is nurtured and minority views are welcome.

Confident and Unified

To what extent do these three mechanisms work in practice? Two points are entirely clear.

First, group members tend to become far more confident of their judgments after they speak with one another.¹ A major effect of group interactions is a greater sense that the postdeliberation conclusion is correct—whether it actually is or not. One reason is that corroboration by others increases people’s confidence in their judgments.² If your colleagues or friends tell you that you are right, you are more likely to think that you are right, even if you are pretty confused (and wrong).

Confidence is certainly a good thing, but as we will see, it is not so good if people end up being both confident and wrong. A great risk of group deliberation is that it will simultaneously produce great confidence and grave error. Leaders are particularly likely to get in trouble for this reason. Group members tend to like to please their leaders, who will therefore not tell the group what it needs to know.

Second, deliberation usually reduces variance. After talking together, group members tend to come into accord with one another. Before deliberation, group members are often far apart; that is one reason that deliberation seems important or necessary. After deliberation, they tend to come into agreement (especially but not only if they are close-knit or have frequent interactions). It follows that members of deliberating groups will converge on a position on which members have a great deal of confidence. We will soon see some examples of this phenomenon in Colorado, where discussion led both liberals and conservatives to end up unified on major political questions, but with a wider chasm of disagreement between the two groups after discussion.

Convergence on a particular position is fine, of course, if that position is also likely to be correct. But if it is not, then group members will end up sharing a view in which they firmly believe, but which turns out to be wrong. Most of us are familiar with situations in which groups are confident, unified, but mistaken. The Bush administration’s belief that Saddam Hussein had weapons of mass destruction is one example. The Obama administration’s unwarranted confidence in the initially disastrous HealthCare.gov website, prelaunch, is another.

Truth versus Majority Rule

Unfortunately, there is no good evidence that deliberating groups will consistently succeed in aggregating the information held by their members. The basic lesson is that people pay a lot of attention to what other group members say and do—and that they do not end up converging on the truth. In fact, they often ignore their own beliefs and say that they believe what other people believe. There is a clear warning here about the potential effects of not only group deliberation but also social media, which can lead people to accept falsehoods.³

Consider this example from recent research. Suppose that people are provided with the following statement: “Oatmeal contains soluble fiber, which reduces your low-density lipoprotein (LDL), the ‘bad’ cholesterol.” (As it happens, this statement is true.) If people are informed of the true-false rating by “a majority of others like you” (on a scale of 1 to 6, from “definitely false” to “definitely true”), they are much influenced by the crowd. Not surprisingly, people tend to go along with the crowd if they tend to think independently that the crowd is right. Also not so surprisingly, people tend to go along with the crowd if they believe that the answer is unclear and debatable.

But strikingly, people also tend to go along with the crowd if the answer is false, even if they have independent reason to believe that it is false. The authors conclude that people’s answers come close to supporting the hypothesis that “people always follow the collective credibility rating, even when they are sure that the statement is true or false.”⁴ Here is a major warning for managers who might find that their employees agree on some course of action, not because they have reason to think that it is right, but because they think that most other people think that it is right.

A classic study demonstrates that majority pressures can be powerful even for factual questions to which some people know the right answers.⁵ The study involved twelve hundred people, forming groups of six, five, and four members. Individuals were asked true-false questions involving art, poetry, public opinion, geography, economics, and politics. They were then asked to assemble into groups that discussed the questions and produced answers. The views of the majority played a dominant role in determining each group’s answers; people tended to go along with what most people thought.

The truth played a role, too, but a lesser one. If a majority of individuals in the group gave the right answer, the group’s decision moved toward the majority in 79 percent of the cases. If a majority of individuals in the group gave the wrong answer, the group’s decision nonetheless moved toward the majority in 56 percent of the cases.

The truth did have an influence—79 percent is higher than 56 percent—but the majority’s judgment was the dominant one. And because the majority was influential even when wrong, the average group decision was right only slightly more often than the average individual decision (66 percent versus 62 percent). What is most important is that groups did not perform nearly as well as they would have if they had properly aggregated the information that group members had.

Other studies find that with respect to questions that have definite answers, deliberating groups tend to do about as well as or slig...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• Introduction: Beyond Groupthink
• Part 1: How Groups Fail
• Part 2: How Groups Succeed
• Notes
• Acknowledgments
• About the Authors