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Risky Thinking
On Risk Management, Business Continuity, and Security
17 August, 2017
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GroupThink

The buzzword may have vanished, but the phenomenon is still very much alive in organizations and every day life. Where can we see GroupThink? And how can we deal with it?

There's a program currently showing on some television networks called My Big Fat Obnoxious Boss. It's a parody of another show, The Apprentice, in which Donald Trump whittles down a list of hopefuls by setting them a series of business-related tasks. After each task, for which the hopefuls are split into two teams, one member of the losing team is fired. Part reality show, part promotion for Donald Trump Enterprises, at times it can make interesting television.

The idea behind My Big Fat Obnoxious Boss is to parody The Apprentice by taking some “ivy league” hopefuls, presenting them with actors playing the part of a billionaire and his associates, and then seeing just how far they can be conned with fake “business insights”, ridiculous tasks, and pure hokum. For example, the fake billionaire keeps not the first dollar he earned displayed at home, but his first million. He has a sword he claims is the real Excalibur. The contestants are asked to sell hot soup on a hot day — and are surprisingly successful at doing it.

The puzzle for the audience is how anyone could believe all this claptrap. Both contestants and actors perform face-to-camera interviews. The contestants try and rationalize the idiocies. The actors explain the illusion and ponder on the contestants' gullibility.

Why do the contestants fall for the illusion?

The answer is Groupthink. The hopeful contestants are in an environment in which everyone around them appears to believe and act as if the main actor is a slightly eccentric billionaire. In this environment, it is difficult for an individual to hold a belief that is not in accordance with the group.

At school we used to play a nasty trick. A group of us would make up a story with a punch line which was not in any way funny, tell it to some unsuspecting person (the mark), then all burst out laughing at the punch-line. Invariably the mark, not to be left out, would start laughing too. We would then start laughing at the mark for falling for the trick. Then they would be asked why the joke was funny. Often, they would arrive at some totally irrational explanation. Schoolboy humor. But also a neat demonstration of the effectiveness of peer pressure in determining how people act and behave.

Studies show that, in a group, people tend to be more extreme in their behavior (either more cautious or less cautious). In addition, the office politics survival instinct of deferring to the boss can very easily cause an offhand remark to be turned into a major policy shift.

What are the effects of Groupthink?

In business new products are introduced that are doomed to failure. Marketing campaigns backfire expensively. And in Risk Analysis obvious risks are overlooked and the probabilities and consequences of events widely misjudged.

How do you protect against this psychological scourge in risk analysis? Two approaches can be used:

One approach is to use the Delphi Method to identify and prioritize risks. Each member of the group's opinion is sought individually then fed back anonymously to other group members. Each group member may then revise his or her opinion in the light of the other group members' anonymous opinions. The process repeats until no further changes are made. By using anonymity, individual opinion forming, and feedback it is hoped that the main advantage of group thinking (seeing things from a wider variety of viewpoints) is obtained without the risk of groupthink. Difficulties with the Delphi Method include: the amount of time and effort it may consume; the degree to which group members still automatically think as a group based upon their similarity of background; the difficulty of maintaining an adequate degree of anonymity of viewpoint in a small group of people who frequently work with each other; and the difficulty of maintaining individual motivation and interest as the process continues.

Another approach is to introduce an outsider, preferably someone from outside the company (e.g. a consultant) into risk analysis discussions. An outsider can ask questions about previous assumptions, conclusions and decisions without embarrassment. Furthermore, an outsider is also uninvolved in office politics and therefore isn't as constrained by the need to defer to senior management. And an outsider is also more likely to be able to introduce ideas which are not constrained by “in-house” thinking.

So is your company suffering from Groupthink? Are you overlooking, overstressing, or diminishing a risk because that's the way the group thinks?

Remember the hapless contestants on My Big Fat Obnoxious Boss. Just because everyone around you seems to believe something, that doesn't make it either sensible or true.

Michael Z. Bell
December, 2004

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