Teams: A Blessing or A Curse?

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Teams A Blessing or A Curse?
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The Wisdom of Crowds (James Surowiecki)

• Francis Galton and the poor Ox (1906)
• Crowd (median estimate) better at estimating
  weight of slaughtered ox than separate estimates
  by a number of cattle experts
• The elements of a wise crowd
• Diversity of opinion
• Independence
• Decentralization (specialization and local
  knowledge)
• Aggregation mechanism

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A Terrible Group Decision

• Jan. 28 1986 Challenger Disaster
• Hardware O ring failure
• Environmental factors
• Operational demands from multiple users
  (political, commercial, military, international
  and scientific communities)
• After spending billions to go to moon, Congress
  wanted to see financial self-sufficiency culture
  of conflict, stress, shortcuts.
• Group Factors
• Thiokol engineers concerned about O ring failure
  at temps below 53 F
• NASA asked for a definitive recommendation given
  that this temp. would not be reached for several
  days My God, do you want me to launch next
  April? Lawrence Molloy
• Thiokol went off line asked chief engineer
  Take off engineering hat and put on management
  hat decision was given to launch

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Group Decision Making in Shuttle Disaster

1. Thiokol had data on O ring failures but
   downplayed it as goal was to stay on schedule
2. Polarization decision to launch met with support
   from group
3. Thiokol engineers wanted to live up to the norms
   of the group
4. Thiokol decision to think privately created
   groupthink pressures
5. Fear of public response if no launch
6. NASA dominated meetings conflict suppressed
   agreed to cancel but only if Thiokol insisted.

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Desert Exercise

• 15 minutes Rank by yourself
• 30 minutes Decide as a group
• 15 minutes Discussion as a class

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Desert Survival Debrief

• What processes did your team use in coming up
  with the consensus decision?
• When you changed your ranking, what factors
  caused you to change your ranking?
• Did you like or resent the group?

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Zimbardo on Asch Experiment

• On the power of the group
• http//www.bing.com/videos/search?qaschexperimen
  tFORMVIRE5viewdetailmid3AB3CB61044FD4F74B2E3
  AB3CB61044FD4F74B2E

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The Asch Effect
Comparison Lines Card
Standard Line Card
1 2 3
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Asch and Social Conformity

• 37 of 50 subjects (74) conformed to the majority
  at least once
• 14 conformed on more than 6 of 12 trials
• Several reported actually misperceiving the
  answer after being confronted by the opposing
  majority.
• The tendency to conform is so strong that
  reasonably intelligent well-meaning people are
  willing to call white black. This raises
  concerns about our ways of education and about
  the values that guide our conduct
• People conform because
• - they want to be liked by the group
• - they assume that the group is better
  informed/wiser than they are.
• - they see differently

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Asch Effect What are the implications of the
Asch effect for managers?

• Strong social effects on what we see and do.
• How to organize meetings how to create debate.
• The power of presumed majorities.
• The power of whistleblowers and nay sayers.
• How to organize meetings how to create debate.

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Asch Effect What are the implications of the
Asch effect for managers?

• Strong social effects on what we see and do.
• How to organize meeting and debates
• Find ways of getting people to express their
  views and opinions in ways that prevent those
  views being swayed by perceived group opinions.
• Emphasize that you are not interested in yes
  men.
• The importance of people who dont get along with
  others Socrates was turned into an outcast but
  should not have been.
• Crucially Once one person dissents, the
  likelihood of others speaking up goes up
  dramatically.

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Zimbardo Prison Experiments

• http//www.bing.com/videos/search?qStanfordExper
  imentMovieFormVQFRVPviewdetailmid990458EF35
  D97489C51D990458EF35D97489C51D

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Milgram Obedience to authority (1974)

• Ordinary people, simply doing their jobs, and
  without any particular hostility on their part,
  can become agents in a terrible destructive
  process. Moreover, even when the destructive
  effects of their work become patently clear, and
  they are asked to carry out actions incompatible
  with fundamental standards of morality,
  relatively few people have the resources needed
  to resist authority
• http//www.bing.com/videos/search?qMilgramShock
  ExperimentFormVQFRVPviewdetailmidE49E9EE093C
  EC55FE564E49E9EE093CEC55FE564

• What percentage of ordinary, law-abiding, Yale
  students would deliver the maximum 450 volt
  shock?
• lt 10 lt 50 gt 50 gt 60

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• "the essence of obedience consists in the fact
  that a person comes to view themselves as the
  instrument for carrying out another person's
  wishes, and they therefore no longer see
  themselves as responsible for their actions. Once
  this critical shift of viewpoint has occurred in
  the person, all of the essential features of
  obedience follow"

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• People have learned that when experts tell them
  something is all right, it probably is, even if
  it does not seem so. (In fact, it is worth noting
  that in this case the experimenter was indeed
  correct it was all right to continue giving the
  "shocks"  even though most of the subjects did
  not suspect the reason.)
• Robert Schiller writing about Milgrams
  experiments

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Milgrams experiments Implications for Managers
Theory of conformism A subject who has neither
the ability nor expertise to make decisions will
leave decision making to the group and its
hierarchy. The group becomes the persons
behavioral model - Dont mistake conformism for
conformation Agentic state theory The essence
of obedience consists in the fact that a person
comes to view himself as the instrument for
carrying out anothers wishes, and therefore no
longer sees himself as responsible for the
action - Im just doing my job
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Groupthink

• Groupthink When you feel a high pressure to
  conform and agree and are unwilling to
  realistically view alternatives
• What are some of the reasons or factors that
  promote groupthink?
• What can be done to prevent groupthink?

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Symptoms of Groupthink and Decision Making
Figure 10-6

• Decision-making Defects
• Few alternatives
• No reexamination of preferred alternatives
• No reexamination of rejected alternatives
• Rejection of expert opinions
• Selective bias of new information
• No contingency plans

• Symptoms of Groupthink
• Invulnerability
• Inherent morality
• Rationalization
• Stereotyped views of opposition
• Self-censorship
• Illusion of unanimity
• Peer pressure
• Mindguards

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Groupthink Implications for Managers

• Assign to each member the role of critical
  evaluator this role involves playing Devils
  Advocate by actively voicing doubt and
  objections.
• Use subgroups and bring in outside experts for
  exploring the same policy decisions.
• Use different groups with different leaders to
  explore the same question.

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Shoreham Nuclear Power Plant

• GE plant in NY, 60 miles from Manhattan
• Designed to produce 540-820 megawatts
• Initial estimated cost 65 million
• Final cost 6billion
• After 11 years (73-84), never opened!

• Construction flaws
• Labor unions
• Public concerns over safety
• Escalation of commitment, or failed persistence?

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Escalation of Commitment The Flip Side of
Persistence
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Reducing Escalation of Commitment

• Set minimum targets for performance, and force
  decision makers to compare against these targets
• Stimulate opposition using devils advocacy
• Rotate managers through roles
• Reduce ego-involvement
• Provide and study more frequent feedback about
  project completion and costs
• Reduce risk and penalties for failure
• Make explicit the costs of persistence

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Simple but Powerful Advice

• Give views in advance, in private.
• Pick who will speak first at random (US Supreme
  Court Justices start with junior-most member)
• Encourage and reward disagreement.

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Delusional Optimism

• Due to both cognitive biases and organizational
  pressures
• - exaggerate own talents downplay luck
• - self-serving attributions in annual reports
• - scenario planning tends to reward most
  optimistic appraisals.
• - anchoring
• - competitor neglect.
• - pessimism often interpreted as disloyalty

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How to Take The Outside View

• Select a reference class
• choose a class that is broad enough to be
  statistically meaningful but narrow enough to be
  truly comparable to project at hand-- movies in
  same genres, similar actors
• Assess the distribution of outcomes
• Identify the average and extremes in the refer-
  ence-class projects outcomes--the studio
  executives reference-class movies sold 40
  million in tickets on average. But 10 sold less
  than 2 mil- lion and 5 sold more than 120
  million.
• Predict, intuitively
• where you fall in the distribution executive
  predicted 95 million
• Estimate reliability of your prediction
• correlation between forecast and actual outcome
  expressed as a coefficient ranging from 0 to 1.
• Correct the intuitive estimate for unreliability
• less reliable the prediction, more needs to be
  adjusted towards the mean.