Groupthink Theory: When Teams Go Wrong

Cohesive teamwork can be a wonderful thing for any organization. However, it comes with a caveat. Groupthink is a phenomenon that occurs when team members work together too well, letting their desire to conform interfere with their ability to make sound decisions. When that happens, the results can be destructive.

What is Groupthink Theory?

Groupthink happens when decisionmakers insist on cohesiveness at the loss of outside viewpoints or opinions. This can lead to the inability to deliberate crucial problems facing an organization, the loss of unique voices within the team or the pursuit of solutions that may be ineffective for the issues they face.

Several influencing conditions allow for groupthink to arise, such as:

• An overly cohesive group. Group members tend to like and agree with one another. New information that might challenge the comradery is suppressed.
• An isolated group. Close knit interactions mean there is less exposure to differing opinions, including those of experts.
• An intimidating leader. Overbearing leadership makes it difficult for others to dissent.
• No official decision-making procedures in place. Groups without a formal process for evaluating their choices can end up making poor ones.
• Not being thorough when researching and evaluating information. Teams do not take the time to understand the information they are given, find different ways of understanding a problem or consider all possible outcomes of their decisions.
• Members experience high stress and low self-esteem. This combination emphasizes quick decision-making and de-emphasizes internal group disagreement.
• The belief that no decision can be found to an immediate problem other than the one preferred by a leader or influential group members.

All these factors lead to a group believing in their innate power and success, a severe pressure upon group members to comply with uniformity.

When these factors occur, explained Inc., they translate into seven problematic behaviors:

1. The group doesn’t consider the range of alternatives available when solving a problem. Instead, they limit their choices, often to just two options.
2. Group members don’t consider the objectives or the perception the choice will create.
3. The group doesn’t re-examine the course of action to look for any non-obvious risks or flaws.
4. The group doesn’t go back and review options that they initially considered unsuitable.
5. Members do not seek out, and therefore do not receive, expert opinions.
6. If group members do receive expert advice and factual information, they show selective bias.
7. Groups do not develop contingency plans because they do not spend time thinking about the flaws in their choices.

Ultimately, these factors lead to groups making uninformed decisions that can turn bad.

Examples of Groupthink

When groupthink has a chance to play out, the results can be problematic. Entrepreneur explained three instances of when teamwork went wrong.

Swissair

Swissair was the official airline of Switzerland, successfully in operation for more than 70 years. Over time, it gained major financial and political stability, so much so it was called “the Flying Bank.” However, the insular culture of the company as well as leaders’ belief that they were both invulnerable and superior to other companies led to a series of poor business decisions. The company went under in the early 2000s.

The American automotive industry

For many years, American automakers wielded extraordinary power in the American auto buying market. Like Swissair, this led to the feeling of being invulnerable. When consumers increasingly demanded energy-saving cars as well as those made in foreign countries, such as Toyota or Hyundai, industry leaders didn’t listen. They believed the market still called for gas-intensive cars like SUVs and continued to make these products instead of following the market. Eventually, a huge portion of the industry crashed.

Banks and the 2008 economic crisis

While groupthink wasn’t the only reason for the Great Recession, it certainly was a contributing factor. Despite mounting evidence to the contrary, many industry experts believed that housing prices would rise indefinitely. Furthermore, groupthink led banks to repeatedly issue bad loans. The assumption was, if others kept buying financial derivatives, the banks’ behavior could continue without consequences. Anyone who realized this behavior was problematic and spoke out could easily be dismissed because the banks engaged in their practice so collectively. Their actions eventually helped drive the housing market to collapse.

Each of these examples failed because leaders only focused on what they already knew instead of gathering new information. They maintained a blind commitment to best practices, drove out dissenting voices and showed overconfidence in their decisions.

How to Recognize Groupthink

The irony of groupthink is, though many people may be involved in making a decision, the power of many minds isn’t enough to prevent a poor choice from being made. Understanding how to recognize groupthink is the first step toward preventing it. None of the factors below individually mean an organization is in trouble, but collectively, they show a warning sign.

Groupthink may occur when:

• As a collective, your group feels good about itself to the point of feeling invulnerable.
• Your group practices a culture of perfection.
• Your group ignores warnings from outside parties.
• Your group does not take differing opinions seriously or meets them with aggression.
• Your group commonly uses negative or stereotypical views of your opponents.
• Your group communicates a tremendous pressure to conform.
• You find that individuals in your group tend to self-censor.

If you believe that groupthink might become an issue, have no fear. There are ways to circumvent the consequences and build a stronger system of decision-making.

How to Avoid Groupthink

Luckily, it’s possible to circumvent groupthink. Responsibility for doing so lies in leadership’s willingness to create an open and methodical space where ideas can be discussed openly and rationally.

Here are some common ways to avoid the problem:

• Companies should emphasize inclusion over assimilation, as well as points of view that compete with and dissent from popular opinion.
• Decision-makers should identify and examine any unspoken rules in their organizations.
• Group members should try to continuously acknowledge any conscious or unconscious biases they may possess.
• Boards of directors should hire who want others to succeed and are not selfish or hardheaded.
• Groups should practice formal and effective meeting procedures.
• Companies should emphasize the continual rebuilding of cohesion after a dissenting conversation.

It is also important for companies to continually ask themselves if they have asked the right questions. Some “right questions” include:

• “Is it safe to be unpopular in this group?”
• “Do we penalize those who show candor?”
• “Are there items in this group that we don’t discuss?”
• “Have we done due diligence in understanding the problem?”
• “Is the logic we’ve used to arrive at this decision correct?”
• “Have we arrived at a sound judgment?”
• “What problems or errors are apparent in the preliminary action we’ve chosen?”
• “Can we improve our choice in any way?”

Asking these questions will allow for a more open yet structured environment, allowing validity of an idea to take precedent above its popularity.

The Study of Groupthink

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Additional sources: Organizational Behavior and Human Decision Processes, Forbes, Journal of Accountancy