Groupthink and the Non-Exec Director
The social psychologist, Irving Janis talked about the concept of Groupthink in 1972 and described it as when a group makes faulty decisions because group pressures lead to a deterioration of ‘mental efficiency, reality testing, and moral judgment’.
A group is especially vulnerable to Groupthink when its members are similar in background, when the group is insulated from outside opinions and when there are no clear rules for decision making.
The lack of preparation at Pearl Harbour in WWII is sited as an example of Groupthink: Japanese messages had been intercepted but it was put forward by senior offices as ‘fact’ that Japan would not attack the United States.
Where does this sit with the role of Non-Exec and particularly with the Non-Exec outside the FTSE 350?
Look back at the last part of that initial description and substitute ‘the Board is especially vulnerable to Groupthink when its members are similar and not diverse, are insulated through being in the business 24/7 and have grown the business from when it was a start-up or scale-up’. Can you see the potential for isolated ideas and opinions to be taken as fact?
An effective delivery of the SME Non-Exec role is through Observation, Governance and Intervention and it is this last mechanism that can be the sharpest tool.
The Non-Exec can be the independent voice that is outside the internal politics or power dynamic, the voice that has a distance from the passion and drive of making the business work, the intervention that can question what is accepted ‘fact’.
Time for another word substitution: ‘ the Non-exec should be the independent voice…’.
The message is being picked up. An increasing number of SMEs are appointing non-execs and seeing the benefit of having someone on the team who will call out less effective ideas, opinions and 'facts'.