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Jo Geraghty

Director

Danger Groupthink Ahead

Date added: 23rd Dec 2016
Category: Leadership

When boardroom complacency and self isolation kicks in leading to a groupthink mentality then governance, culture and strength go out the window

It’s great seeing friends at Christmas; mulling over old times, catching up with the news or just enjoying being with people who share a common history. And there is no need to pretend or explain because in some ways their story is your story and that means you instinctively understand each other, laugh at the same memories and even if you don’t share the same outlook you understand each other’s point of view.

Wouldn’t it be good if you had that same easy relationship in the workplace? Well yes and no! Certainly having a culture of respect and friendship and understanding can bring added value to areas such as the way things are done and customer relationships. But it’s also important to be aware of the danger which can arise when boardrooms move away from being the driving force of the business and start to become more like a cosy get-together of friends.

When that happens, complacency and self isolation can easily kick in leading to a groupthink mentality. Coined by psychologist Irving Janis, groupthink is likely to occur when members of a group are similar in background and experience. Working in isolation the group builds up a belief in their own invulnerability and in the inherent accuracy of their own decisions. Challengers, if there are any, are excluded from the group with the outward impression being given of complete agreement. As a result there is little or no reality testing leading to decisions which are not in the best interests of the organisation in the long term.

Interestingly a variant of groupthink was demonstrated in the recent US presidential election when it was shown that a considerable portion of the electorate received their news from social media. With people tending to belong to groups which reflected their own opinions; ideas and news became increasingly polarised between the two main camps, making it easy for fake news stories to be shared and re-shared until they received a quasi factual status. And because groups were simply not exposed to the other side of stories there was little or no place for challenge or impartial debate.

The same groupthink danger can happen in boardrooms which have become closed talking shops or which have allowed themselves to be composed solely of people from a similar background. It’s a danger which has been highlighted in recent years by the financial reporting Council (FRC) and which has now been picked up by Prime Minister Theresa May. Whether or not work or consumer representatives finish up sitting in boardrooms, the idea behind the government’s initiative is to move boards away from the danger of groupthink by opening them up to debate and challenge.

Of course no one wants a boardroom riven by dissent; infighting leading to paralysis never benefited anyone. But neither do boardrooms whose groupthink has become so entrenched that it stifles any chance of innovation and progress. Boardrooms should be places of challenge in which the best future for the organisation is debated by individuals with a diverse range of backgrounds and experiences.

In corporate governance terms, directors have a duty to promote the success of the company and to exercise independent judgement. Neither are served when groupthink comes to the fore. I accept that we all need unchallenged and unchallenging friendship in order to help us to renew our emotional batteries but that’s not something which should happen in the boardroom.  So let’s step up to our role as directors and make 2017 the year when we move away from groupthink, open up debate and give our businesses the sort of innovative future which they deserve.

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