Al Pittampalli

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Difficult Decisions: The Costs of Consensus

Consensus has clear benefits, but we often underestimate the costs.

Posted Jan 03, 2018

Wikimedia Commons
Source: Wikimedia Commons

“We have a consensus culture,” a Fortune 500 executive recently told me, after I asked them how their company usually makes decisions. It’s an answer I hear often, unsurprisingly. Consensus is in vogue, with organizations around the world proudly boasting their commitment to it in their mission statements, job postings, and letters to shareholders.

Consensus, to clarify, is the style of decision-making in which a group discusses and debates various courses of action, while taking care to address the concerns of each participant. This, until every member can generally agree upon, or at least can live with, a way forward.

And this decision-making style is so greatly venerated by organizations, for one, because it matches democratic ideals that most of us hold dear — egalitarianism, fairness, inclusion. But what’s more, consensus, these companies will tell you, simply leads to better decisions. It’s a nice thought, and easy to see why organizations would want to believe it. But is it true? Some top leaders appear skeptical.

Is Consensus All It’s Cracked Up to Be?

When Larry Page took over as CEO of Google in the Spring of 2011, one of his most immediate priorities was to disrupt the consensus culture that was beginning to take hold. To this end, he sent a company-wide e-mail outlining new collaboration rules including this one, as summarized by Kristen Gil, Google’s VP of Operations: “Every meeting must have one clear decision maker. If there’s no decision maker — or no decision to be made — the meeting shouldn’t happen.”

Amazon CEO Jeff Bezos, shared a similar sentiment in a 2016 letter to shareholders, cautioning his employees against overestimating the value of consensus. He encouraged his team to know when to stop chasing agreement and instead say: “Look, I know we disagree on this but will you gamble with me on it?”

What is with this backlash against consensus?

To be sure, consensus generally does improve decision accuracy. Different participants — because of their unique perspectives, expertise, positions, etc. — tend to hold different pieces information. Consensus, when performed properly, in a way that roots out groupthink, aggregates this information. The result is more informed decisions.

Furthermore, consensus, by carefully addressing individual concerns, leads to greater levels of commitment to those decisions. Which is critical, after all, what good is a decision if no one wants to carry it out?

But while consensus carries clear benefits, we must also ask the question: what are the costs?

The Costs of Consensus

The greatest cost of deciding by consensus is, no doubt, delay. Consensus takes considerable time and effort to solicit and understand divergent points of view, brainstorm ways to alleviate concerns, and resolve disagreements.

Some may disagree, claiming their team can reach consensus with uncanny speed. But, I’m afraid to say, if you can get general agreement in 10 minutes, you’re not doing it right. When the exalted former CEO of General Motors, Alfred P. Sloan, achieved consensus too quickly, he famously declared: “If we are all in agreement on the decision — then I propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.”

So consensus, by its very nature, is slow. And, while consensus enthusiasts don’t like to admit it, when it comes to decision-making, speed can be as important, if not, more important than accuracy.

Bezos attributes much of Amazon’s success to what he calls its “high-velocity decision-making.” Larry Page, in the closing speech at Google’s Zeitgeist event, put it more bluntly: “There are no companies that make good slow decisions.”

Moreover, while consensus, by its very nature, causes delay, when it comes to especially difficult decisions, it can produce unnaturally long delays. These delays occur for a different reason: leaders use consensus as a cover for procrastination.

Especially difficult decisions, ones bound to upset some individual or group, provoke knee-rattling anxiety in even the most level-headed of decision makers. And because human beings abhor anxiety, when in its presence, we feel a strong urge to procrastinate.

Of course, we don’t want to appear like we’re procrastinating. However, when it comes to decision-making styles where the decision-maker, in this case us, is clearly identified, there’s nowhere to hide. Consensus, on the other hand, which diffuses responsibility across the entire group, makes hiding rather easy. After all, in consensus, my decision quickly becomes our decision as soon as we step inside the conference room. And so it should be no surprise that leaders facing immense anxiety would turn to consensus as a way to delay their hard decisions, sometimes by absurd lengths.

I often hear horror stories — how, according to one executive, spending decisions can take up to six meetings at the BBC to be approved, or how the toy company Mattel spent an infuriatingly long time deciding on a simple logo for their new product line — and wonder what made these fiascos possible? The answer is consensus. It allows otherwise capable leaders to convince themselves that they’re actually deciding, when really what they’re doing is stalling. To be clear, most leaders don’t use consensus to escape responsibility intentionally. More likely, they do so instinctively, without even realizing it, which makes consensus all the more dangerous.

Larry Page understood the danger, how quickly consensus culture could turn a once nimble startup like Google, into a slow bureaucratic behemoth mired by procrastination and diffusion of responsibility. This realization is what, I imagine, prompted him to send his now famous memo.

When Should We Use Consensus (and When Shouldn’t We?)

Considering the high costs associated with consensus, chiefly delay, both intentional and unintentional, we would all be wise to be a bit more skeptical of the well-intentioned decision-making strategy.

But does that mean organizations should do away with consensus altogether? Of course not. Instead, we should reserve consensus for when the potential benefits are high, namely for major decisions. For major decisions, ones that carry high potential reward, or considerable risk, consensus is worth the time and effort.

The reality is, however, that major decisions aren’t as common as leaders think. Though each and every decision we face on the daily may feel mission-critical, most simply aren’t. (And if you disagree, remember the old adage: if everything is important, nothing is.)

Additionally, many of these supposedly major decisions, as Bezos points out, are reversible anyway. For these relatively low-stakes decisions, he asks, “So what if you’re wrong?” His implication being: nothing. And so it makes not one lick of sense to slow down for these minor matters. We should speed up.

Organizations need to move away from consensus culture, and should instead default to participative decision-making: consult as many people as necessary, but make sure one and only one person, in the end, is accountable for the decision. Organizations, then, should view consensus as a special tool that they use in cases where the stakes are high, cases that require a high degree of accuracy or commitment.

But must we sacrifice commitment for all other decisions? Not necessarily. Bezos thinks teams ought to have enough trust in one another that they don’t need agreement to gain commitment. He reminds us that high-velocity teams, teams best equipped to capture opportunities and rapidly respond to threats, embrace a different mantra: “disagree and commit.”

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This article originally appeared at alpitt.com.