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Keep bias out of the board room

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  • | 10:23 p.m. January 2, 2012
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Are you a Gulf Coast executive about to make a big decision in the coming year that will dramatically affect your enterprise for years to come? Are you considering a dramatic increase or redirection to your staff? Are you reorganizing or moving your headquarters? Are you considering purchasing office or warehouse facilities? Will you expand to an additional geographical area beyond your present marketplace? Is a merger or acquisition in your future?

If you now have a soft smile on your face or at least a glimmer in your eye, you're probably enthusiastic about a major corporate strategy in the making. You'll certainly be soliciting input from your senior team. You might even decide to call the group together — depending upon staff size and their assumed depth of thinking — to develop a strategic course of action.

The lurking problem
Everyone among the leadership will enjoy the free-flowing discussion. The exchange of ideas in an open atmosphere of trust should always be encouraged.

Many senior executives today, however, are keenly aware how bias among the “troops” can severely distort reasoning and logic in the enterprise. For example, some people will ignore evidence that contradicts their own preconceived notions. Others sitting around your Gulf Coast conference room table may weigh one piece of information too heavily, while ignoring other important information, in making a decision. Still, others may wish to minimize conflict and converge upon consensus because it appears to be gathering support.

In short, bias distorts thinking. That's why, with critical decision-making, you'll want to conduct a careful review of the “content” of the recommendation. Then, give equal importance to the recommendation “process” itself.

The concept of bias is the hottest topic these days at the top-tier business graduate schools. It's also the subject of several recently popular business books. And, though there now may be far more awareness about the subject, talk alone will not eliminate this very real problem.

So, here's the challenge: Reduce bias in your enterprise because it could absolutely derail your success rate. Start right now to minimize its affect in the most common kind of decision you'll always be called upon to make: reviewing a recommendation from others and determining whether to accept it, reject it, rethink it, or pass it on to the next level. Can you begin to relate to your own personal leadership here?

The big idea
A widely acclaimed report was recently released to the Harvard Business Review by Princeton Professor Daniel Kahneman — a Nobel prize winner in economic sciences — along with the iconic McKinsey & Co. management consultants Dan Lovallo and Oliver Sibony. It is now the acknowledged guide on what to look for in this challenge.

At heavy decision-making time, here is a condensation of some of the questions the decision makers should ask themselves:

• Is there any reason to suspect motivated action, driven by self-interest of the recommending team?
• Have the people making the recommendation become too emotionally involved?
• Were the dissenting opinions properly examined to make certain that dissent is not stifled?
• Have credible alternatives been considered?
• Are the people making the recommendation overly attached to related past decisions?
• Is the recommending team overly cautious or overly optimistic, and what is the worst case scenario?

The final word
This whole concept of bias is of concern to companies both large and small. It's especially critical to smaller and mid-size professional services segments. That's because every dollar involved is so personal.

As a Gulf Coast entrepreneur, realize that the judgment of even highly experienced, totally competent managers can be fallible. And yet, you must make certain that your enterprise encourages a culture of open, unbiased debate in which the process can flourish. Finally, a well-disciplined decision-making process, not individual genius, is the key to best strategy. Keep bias out of the board room.

Lou Lasday creates action-oriented strategic marketing initiatives for Gulf Coast emerging companies. He has been a principal partner of an Ad Age “Top 100” marketing communications firm and regional president of the American Marketing Association. He can be reached at [email protected].


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