Successful investment team looking to improve decision making and reduce blindspots

The challenge

The B Team is a very successful investment team based in Cambridge however, at the time of working with them, only two team members (the old hands) had experienced a significant and prolonged negative market event such as the tech bubble bursting and subprime housing crisis. Their investment process had been built in fairly benign market conditions with a team that worked exceedingly well together. The CIO worried that they were getting too comfortable with each other’s views resulting in a lack of robust challenge.

Data gathering

After a morning of observing them tackle several decision-making challenges, the Decide team was able to see that the old hands considered themselves as the team guardians and guides and so had a larger share of the team’s voice than the others, despite insisting that everyone was equally heard. Others waited for them to take the lead and deferred very naturally to their experience. There’s nothing wrong with that if you’re training a new team however the B team was a mature team where everyone was expected to step up to increased responsibilities. The CIO worried that their desire to maintain convivial working relationships was preventing them from truly challenging each other’s ideas which would, eventually, impact their investment performance.

Solutions

Together we explored changes that occur in the dopamine pathways in our brain when we collaborate as a team. How feeling part of a close-knit team reduces stress and increases feelings of well-being and how this results in the desire to maintain team harmony. We also explored how disagreement and direct challenge from our team-mates travels along the same neurological pathways as physical pain. A handy explanation for why we tend to avoid giving and receiving challenge. Our experience of working with English teams is that they can be exceedingly polite at the expense of effective challenge and robust decision-making. A trait that we found manifest in Japanese and Singaporean teams, too, but for slightly different cultural reasons.

Having little experience of effectively challenging one another and carrying concealed cultural baggage equating challenge with aggression, meant that this team had to learn how to challenge ideas effectively and so, to trust each other even more. To trust that a challenge was out of loyalty to the process and their collective outcomes rather than personal.

Why not simply designate a devil’s advocate at each meeting? In fact, this is never a good idea because of the toll that it inflicts on an individual. It’s physically taxing to challenge others, even if it’s specifically asked of you. If you are not naturally inclined to pull someone’s argument apart it can create mental dissonance, increase stress levels and feelings of not belonging in your team. It simply doesn’t work in the long run. Instead of dropping in a devil’s advocate, the B Team formalised their decision-making process and introduced some decision-making protocols.

New decision protocols

Instead of only presenting one investment idea at a time, each analysis was asked to present two at the same time early on in the process so as to reduce the potential of sunk cost, loss aversion and ownership bias. The team as a whole would then decide on which idea to explore further. The analyst that proposed it was then tasked with presenting both the merits and demerits of the investment. This allowed a robust debate within the team about the negative information that the analyst himself presented. In this situation both agreement and disagreement are positive. Allowing the entire team to form a balanced view of the investment opportunity rather than see it through the rosy lens of the analyst advocating for it.

Of course, a similar strategy would work with most investments or projects.

Changing the face of ethics in Pharma through ethical decision-making Guidelines

The challenge

Every company is a decision-making factory and these decisions determine, not only the success of the organisation but public perception of it. All pharmaceutical companies have extensive codes of ethics and patient-centred practices, so standing out in this area and making a real change is a challenge. We worked with Company P, a global pharmaceutical wanting to change negative perceptions of the pharma industry in the market by making a tangible difference in the way they worked from the top down and the inside out.

The solution

They knew that they had good people working for them and a solid ethics programme, so decision making is where they focussed. What could they give their teams to help them make the most ethical decisions they could? Firstly, they stopped using the term doing the right thing. As a large multinational, what was the right thing in a particular circumstance to an employee in China might be different to what an employee in Brazil might think is the right thing to do in similar circumstances. What biases did almost 10 000 employees harbour and how could they avoid these in decision making?

Values are core biases that differ vastly across nationalities, generations and individuals and so their ethical decision-making process began by asking all employees to get clear on their own values and where these weren’t aligned with clear corporate values. Leaders were trained to help employees do this and so were their newly trained ethical decision-making coaches. After exploring how ethical dilemmas were tackled in the organisation and what their decision-making persona was, we proceeded to build a decision-making strategy that would help employees identify an ethical dilemma, ensure they are solving the correct problem, identify stakeholders and explore impacts on those stakeholders over time.

Requesting opinions on the decision under consideration from a superior, a colleague with a different viewpoint and a third colleague with no stake in the decision at all was also part of it. Together, these steps allow decision makers to thoroughly explore the problem, test their assumptions and agree on stakeholders and current and future impacts all whilst rooting their discussion in organisational values. The real power of this framework was that it allowed them to identify assumptions that different team members could unknowing bring to the problem domain.

This process was soon adopted by the senior management team for strategic decisions.

Improving decision quality without sacrificing agility in an FMCG

The challenge

X inc is one of the world’s largest manufacturing organisations. They already had a fast and frugal decision-making process that allowed them to keep up with a rapidly changing consumer environment. It was all about being agile and disruptive, overcoming deadlocks and widening the bandwidth of their decision makers to ensure they weren’t bottlenecks in a VUCA environment. Within this strategy decision makers did not have to take the time to explain their decisions to subordinates. This eroded trust between colleagues as decisions could be taken unilaterally with little consultation. They also didn’t need to speak to people they knew would challenge them and so slow them down, even if these people were the experts.

The investigation

On the flip side, many employees didn’t have the confidence to make decisions quickly or unilaterally and so escalated, procrastinated or avoided making a choice. The process was broken but implementing a long, detailed decision-making framework was never going to appeal to them.

What was the problem they needed to solve? Firstly, they all needed to be aligned about the future of the organisation so that decision makers always had the same ultimate goal and could justify their choices in line with it. Rebuilding trust would come through openness and consultation within the decision-making process. A common language to discuss their decision making and approach to risk would also be helpful. Their fast and frugal system was augmented with specific steps to slow them down and introduce essential critical thought and challenge into their thinking.

This resulted in decision makers feeling more confidence in their decision making mostly because their ultimate goal changed from making quick decisions to effective decisions. A more robust framework ensured that they examined their decisions from more angles, better understood the pitfalls in the information they gathered and were better able to articulate their choice rationale through the lens of the framework.