TEDX TALK TRANSCRIPT

I grew up learning that self-reliance was a golden virtue up there with honesty. At work I really enjoyed being part of a team. But when there was something to be done, my instinct was to do as much I could myself.

And that habit was a handicap when I started to make big decisions, decisions that would impact the success of my team, and the careers of the people in it. When I did solicit opinions, I’m ashamed to say that it was usually after I had made up my mind.

You see, I had come to believe that the skill of making big decisions was acquired intuitively – like learning how to cross the road without a pedestrian crossing. I felt I should just know how to do it.

My first lesson was that it was a mistake to make these big decisions by myself. This lesson is well illustrated by my favourite piece of research on decision-making. It involved business school students and a whodunit murder mystery. It required the participants to choose the most likely culprit from three suspects. 

When the students worked alone, they identified the culprit 44% of the time.

In teams of 4 people where they were familiar with one another, those students were confident they’d chosen correctly. They had done better than those working alone, but not by much – they got the right answer 54% of the time.

The best outcome was when the teams included an outsider, someone the other 3 didn’t know. This outsider didn’t necessarily have the right answer, but their presence was like a catalyst, causing everyone to behave differently. These teams uncovered more of the nuance, so they weren’t as confident as the other groups.  But here’s the surprise – their chances of getting to the right answer rose to 75%.

So, that was my first lesson. Teams make better decisions than individuals, and diverse teams make the best decisions.

But having a great team is a bit like having the ingredients for apple pie – the apples, the butter, the cinnamon, and so on. All necessary but not sufficient. All parts need to work together.

Our discussions were often draining. Some people didn’t prepare so we had to wait while they caught up. Or our discussions would be de-railed by someone who continually brought up the single point that affected only their own sector. Perhaps worst of all was the colleague who had no direct responsibility for the problem – the “disinterested observer” - ‘Let me know how the rest of you get on’. Does that sound familiar?

My second lesson was that how the team works together to make decisions matters.

Researchers – investigating how different factors influenced success – reviewed more than 1,000 financial investment decisions made by teams working in different industries.

As expected, chance played a part – almost 40% of the difference in return arose because of issues that the teams could not control.

40%.

I find that scary and comforting. Think how often we beat ourselves up when the unexpected happens. Sometimes we need to give ourselves a break.

I love gathering information and analysing it, so I was disappointed to learn that the quality of the data and the analysis of it explained only 8% of the variance in results. 

But how the team made the decision accounted for more than 50% of the difference of the return on investment.

The quality of the collaboration within the team, their approach to discussing the analyses and the underlying assumptions, the debate they had on risk factors - these discussions that I found so challenging to chair – these ‘how’ factors mattered SIX times more than the data and its analysis. 

But to have great collaboration, everyone needs to contribute.

And in a team, it can be challenging to get people to air their honest opinion. There’ll likely be at least one person who always agrees with the boss - perhaps they’re new or they want a promotion. Or a more junior person might assume everyone knows more than they do – so if no-one else raises the same point, they stay quiet.

Candour in a team is key and the leader must really want it and encourage it. Then it can become contagious – but you might have to get the ball rolling. Collating contributions anonymously can help protect ideas from hierarchy and politics. So maybe ask someone outside your team to collect responses so the contributors are separated from their suggestions.

In doing this, you get the bullets on the table to spark discussion, without anyone being seen to have fired a shot.

So, those were my two lessons – it’s best if we use our team to help us make big decisions and how we work together really matters. I’d like to share with you now those tips for the three stages of making big decisions.  

1. WHAT IS THE PROBLEM?

G.K. Chesterton once said, “It isn’t that they can’t see the solution. It’s that they can’t see the problem.”

It’s important to understand what the real problem is – important because leaders who can formulate clear problem statements get more done with less effort and move more rapidly than their less-focused counterparts.

But it can feel very frustrating to spend time in the problem – we’re desperate to jump to a solution.  Cognitive scientists say this automatic quick-thinking is natural for our brains and it is the best approach sometimes – for experts responding to a familiar situation – like firefighters and emergency room doctors. But it’s not so good for complex and nuanced decisions where there’s no clear feedback in the short-term. It takes patience and perseverance to stay in the problem, to get past the symptoms to the cause itself.

Take a high-performing but disgruntled team. Their leader decides bigger bonuses are needed to reward the long hours they’ve worked and sees the problem as getting the budget to do so.

But that’s a solution disguised as a problem. It turns out the team is unhappy because they’re understaffed for the tight deadlines they face. Extra money will raise morale in the short-term BUT it won’t address the need to change how deadlines are set, nor how to recruit and retain staff in the long-term.  

So, once you’ve done the first step – understanding the REAL problem – you’ll need to get on with the second.

2. GETTING TO A SOLUTION

Be honest now, when you’ve been invited to a meeting to come up with ideas, when that rallying cry came, how did you feel? Did your heart sink?

• Here I have a confession to make.  I’m the irritating person who, if I care about what’s on the agenda, I am likely to have a lot to say. And although I didn’t talk til I was 4, it has taken decades for me to know when to stop. Individuals in a group can only express one idea at a time if they want others to hear them and a conversation hog – or two – can definitely get in the way.

Indeed, studies have found that when the group is together, the number of ideas per person declines as the group size increases.

And there are other reasons why generating ideas in a group doesn’t work.

• People tend to make less effort when they know others might do it.

• They also worry about how others will judge their ideas.

• And there’s a risk that the performance of the most talented group members slips to match that of their less talented colleagues. This effect is well known in sports – if you practice with someone less competent, your competence level declines.

Research shows that we get the best, most innovative solutions when the team comes together intermittently.

First, solicit ideas individually. You’ll get more ideas and, although the quality of them will diverge widely, you’re more likely to get some very creative suggestions.

Next, bring the team together to discuss and refine what’s been contributed.

You’ll need to decide how many people to have on your team. There’s no golden rule on this; it depends on the task at hand. Some researchers suggest the optimal number is 7. In my experience you need at least 5 and no more than 9 to generate useful debate.

As I mentioned before, anonymising the ideas before presenting them to the group might lead to a better debate. If you can, it’s also helpful to leave time between group discussions to allow for further individual reflection before you shortlist your options.

Then these need evaluation before the leader can choose between them.

Ask everyone to rank the options rather than just choosing their favourite.  Ranking usually means a richer discussion - the reasons your colleague chose differently may mean you rethink your preference.

By this stage your team has really understood the problem, together you’ve generated some options and evaluated them so now is the time to apply your intuition before the leader makes the decision … the team is ready to go – right?  … Not quite.

3. YOU NEED TO DE-RISK YOUR PLAN 

In this third stage before you start implementation, you need to consider two kinds of risk.

Firstly, there’s the risk that there are aspects critical to your success that you don’t identify upfront so can’t manage.

The infamous Cash for Ash fiasco in Northern Ireland is a great example of the law of unintended consequences. The renewable energy initiative started over ten years ago as a well-intentioned effort to reduce carbon emissions. The goal was to encourage taxpayers to switch from oil-fired boilers to boilers burning wood. However, the subsidy itself was more valuable than the cost of the wood used to heat the boilers – so boilers were left on 24/7, pumping out more CO2 than ever. One farmer who heated an empty chicken shed calculated he’d make profit of £1million over 20 years – that’s an average of £50k a year for MORE carbon emissions!

Might this outcome have been avoided if the bureaucracy had paused to imagine the worst?  Learning from mistakes is useful but it’s not fun, coming too late to affect the outcome. Designing solutions requires us to be optimistic so it’s hard to think of risks at the same time.

But one way of identifying issues that would otherwise have been missed in the planning stage is to have a pre-mortem on a different day when we can be more pessimistic.

It works like this. You say to your team “Imagine it’s 2025 and this decision we made in 2023 has been a disaster. What happened?”

The team must come up with reasons why the plan might have failed or been de-railed, taking into account internal as well as external factors.

Identifying these issues upfront means there’s a chance of managing them. After all, we kid ourselves when we’re optimistic about stuff we don’t manage or can’t control.

That’s the first type of risk.

Secondly there’s the risk that once you start on your chosen path, you stay on it too long in the face of new information.

No matter how hard you’ve worked to make a decision, you can’t know it’s going to succeed. Remember in the research, almost 40% of the variance in the investment returns was down to        chance.

And setting goals that turn out to be unrealistic for reasons outside our control is stressful and frustrating for all concerned.

What happens if after say a year, it’s not going to plan? The more effort you’ve made, the harder you’ve worked, the more difficult it is to accept that your plan needs to change. There’s a name for this behaviour – it’s called escalation of commitment, and it leads us to say, “We’ve just been unlucky, let’s give it another year.”

One way to manage this risk is to design a stop signal upfront – before you start implementing your plan. 

A stop signal forecasts the interim results you would expect to see and when. The decision won’t have been executed in full, but you expect to have done enough to have some indications on the likely result. If the outcome isn’t what you forecast, that’ll be a sign that you have to stop and consider doing something different. You won’t let hope become your new strategy.

Some years ago, our brief was to build a business in the Middle East. We defined our prospective customers and based on research, we identified a service that we thought would be useful to them, and we built our team and the strategy accordingly. As a stop signal, we decided that if, within so many months, we hadn’t been engaged to deliver a certain volume of that type of work, we would re-assess our plan.

Well, by the time we tested our stop signal, we had to admit that our prospective customers were not interested buying that service.  Because the economic outlook had changed since we started, they were focussed on rationalising their businesses – an area where we could help although it wasn’t the service we had expected to sell. We needed to change tack and change the team.  

Designing a stop signal upfront allowed that later objective progress assessment to feel less personal to the team on the ground. They didn’t feel so defensive because the stop signal reminded all of us that - despite unstinting effort – things not working out to plan was a possibility we had anticipated from the start.

It’s likely that all of us here have been – or will be – in the room when big decisions are made. I wish I had known more of this when I started leading teams – that we need diverse teams who work well together to make big decisions, that there’s a way of approaching those decisions that makes it more likely we’ll make good ones. I know it sounds like more work than just giving the job to someone to do it by themselves, but for a big decision, isn’t it worth it? Perhaps we can find the answer from the Nobel prizewinner Daniel Kahneman who has spent the greater part of his life looking at how we make decisions:

“The effort invested in getting it right should be commensurate with the importance of the decision.”