The bounded rational decision making process used by the All Star Sports management will minimize or eliminate certain biases, mostly at the cause of the group framing stage and the final ratification stage. Working together as a group has certain advantages, including benefiting from diverse input and different areas of expertise.
Bartlett craves consensus and participation, and the process reflects this. A main group functions as a sounding board and ratifies decisions, but thee analysis and main debate occurs offline, in a smaller and more engaged group. This committee of sorts then reports back to the main group.
Loss aversion, myopia and other biases based on short term thinking can be reduced in the framing stage of All-Star Sports decision making. At All Star Sports, the leadership team works through implications of a possible decision together. Diverse areas such as Finance, Marketing, HR etc. think through the implications in their respective area using their personal decision making heuristics, and the summary of this is a strong, multi-faceted reflection of how a problem affects the company.
Any short term thinking, due to a wish to reduce delays in benefits or short term loss, will result in a different problem elsewhere in the system. While it is instinct to want to avoid loss or delay in profit, these biases are more likely to affect an individual decision maker, not a diverse group working together with separate specific decision making interests. Having the entire management team to structure what the problem is in their own terms will help to avoid constructing the problem so that it can be solved in this way.
Choice overload is likely minimized, as the group structures and frames problems together, and options are framed in limited number, or best chance options. Choices will be limited by structuring the problem early on, as there will be a focus on those aspects that are the most well understood. While brainstorming may result in a long list, discussion will group and identify the most promising areas for further discussion and analysis. Choices are also refined by subgroups who return with set options, further minimizing potentially overloading decision makers with options.
The decision making process used by All Star Sports will exacerbate or introduce certain biases, particularly as all do not participate to the same degree, and the sometimes lack of conclusion reached by the decision making group.
Overconfidence is an issue with any group decision making process. Once a group reaches a stage in discussion where they are approaching agreement, the reward behaviour of the agreement can make their ideas seem better than they really are. Challenge and expression of mild objection are reduced, and the decision making is prevented from taking advantage of the full knowledge in the room. This is somewhat mitigated by the offline subgroups who further engage in a smaller venue, however it will come back when the findings of the subgroup reenter the main discussion.
By framing problems as a group, Bartlett’s management team risks hiding options or sweeping them off the table before having a chance to truly understand the potential. Being right is not democratic; some options are not considered, and then are left out by the framing of the problem. Sometimes this is because the framing of the problem or the solution are very technical and not well understood, but sometimes it is simply unattractive or overlooked. By framing the problems early and before full analysis, the group naturally focuses on that part of the problem that they best understand. Parts of the problem related to areas where skills or knowledge are poor will be pushed back. This occurs in aggregate when group think reduces such framing and the potential considerations.
The attraction effect will also follow if problems and options are framed early, and a decision will be made based on the options before them, rather than the full set of possible options, thereby reducing the efficacy of their decision making and reducing their competitiveness.
While the decision making process at All Star Sports has worked well so far, the team has identified some areas for improvement. The team has described conflict, lack of closure and a need for commitment as outcomes from the current decision making process which requires some work. All three areas require a sufficient challenge function coming out from within the group.
All three areas that the team identified are group bias areas; while currently informal subgroups go offline to define and explore problems, return and summarize their findings, there is little challenge in this part of the process. The entire decision making group is no longer as involved as those in the subgroup, who now, after spending the time and effort, are presenting their solutions. This can reduce challenge from the rest of the group, that haven’t been involved.
Bartlett’s leadership style emphasizes consensus, but he is not truly getting the consensus he craves; while he strives for an open environment, there are many factors that influence not voicing opposition including mildness of opposition, lack of engagement, political or power group tensions, uncertainty about group response and wanting to work as a team.
There are three actions that the All-Star Sports can take to add more tension to their debates, encourage engagement and hence provide closure to more issues: training the team to accept more tension; a more dynamic offline small group process; and rewarding engagement.
The process is a good one; in just a few years All-Star Sports has dramatically expanded and captured market share and the company continues to grow, however with success comes competition, and it is important to continually improve processes; management decision making is one of the most important. In order to spread that awareness, it would be best to brand an attempt to implement the refinements to the decision making process under a single slogan or phrase.
The executives involved in All Star-Sports decision making are not likely shy or nervous, but group dynamics can intervene with decision making functions in a myriad of ways which result in holding back contributions or limiting negative expression. Training can help overcome this, by explicitly giving the team members permission to introduce challenge and showing them the right way to do so. One of the skills that will greatly facilitate this is avoiding negative language. This can be learned over time, but a specific workshop for team members with role play can get this started. As executive learn to rephrase their thoughts from “that could never work” to “that could only work if…”, new and previously hidden ideas can emerge that assist with making excellent and timely decisions that get ahead of the competition.
More dynamic offline subgroups could revitalize debate and challenge functions by design. Where now informal groups self-identify and carry on the discussion, a shadow group should also be identified to specifically come up with a competing dialogue on the problems, solutions and options. By having two separate ideas coming together there is more of a chance that a stronger analysis and better options will result.
Currently there is no reward structure in place to encourage participation and a capacity for tension and challenge. A monetary reward is often ideal, but in this scenario it would be difficult to measure and value the individual’s contribution, and more likely to lead to a new level of resentments. The most cost effective and easy to implement solution is the simplest and most effective one- for leadership to provide positive feedback by Bartlett himself. For example, Bartlett could recognize individual executive. who respectfully promote challenge to constructions of problems and solutions informally (“I really like that you brought up that challenge”) as well as formally (in the form of a memo, award for MVP of decision making, etc.).
There are of course costs and opportunity costs associated with these improvements. Training to increase the capacity of executives to accept tension and challenge will cost a half or day of time as well as a small budget for a work shop accommodation and a facilitator. Given that the savings of making better decisions can be huge for a rapidly growing company this could be well worthwhile.
Developing a more dynamic subgroup analysis process will require time as the group discussed this idea and comes up with terms for how it would work. Without buy-in from the group it is unlikely to work. There would also be an element of practice and trial and error involved, until the process was working as envisioned. The budget costs of this would be minimal, and again the potential result is a refinement of the existing system that will lead to better decisions, save on expenditures and make more profits.
The reward system would be similarly easy to implement, however it may take Mr. Bartlett some time and professional coaching to get it right. It is unlikely that an individual can correctly self-assess the uptake or the response to the rewards of their positive feedback, and a professional organizational psychologist or similar could assist by initialling monitoring Bartlett’s attempts to reward challenge and provide him with feedback.
The proposed process would be better than the current process as these refinements reduce the hesitation and discomfort associated with bringing up less popular views or options. The result is a more dynamic inclusion of that which is hidden and unclear, strengthening decision making by strengthening the psychology of that process.
