Decision making and the devil’s advocate | MBA Learnings

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Kellogg
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First-year student Rohan Rajiv is blogging once a week about important lessons he is learning at Kellogg. Read more of his posts here.

In our pre-term class on Leadership in Organizations, we spent a few hours on personal and organizational decision making. A recommended tactic was to assign a team member to play “devil’s advocate” on all important decisions. This move is designed to eliminate confirmation bias and “yes-and-yes” decisions.

So, what are “yes-and-yes” decisions?

An analysis of teenager decision making, as published in Decisive by Chip and Dan Heath, showed:

  • 30% of teenager decisions were just statements or “yes-and-yes” decisions. E.g. “I am going to go to that party,” or “I am not going to smoke.”
  • Another 35% were “whether-or-not” decisions. E.g. “Should I go to that party or not?”

In other words, teens are very binary. They don’t consider multiple options. Instead, they spend a lot of time mulling over one option.

In an analysis of 168 decisions made by companies across industries, researcher Paul Nutt found that only 29% of the decisions made by companies had options, meaning companies were worse than teenagers in making decisions.

In fact, large acquisition decisions can often be a result of a “yes and yes” decision. The CEO decided a company was worth acquiring and everyone else worked hard to prove him right. A famous example is Quaker’s failed acquisition of Snapple for $1.7 Billion. Ex-Quaker CEO William Smithburg later admitted that the acquisition had no one within the company challenging it. Think about that – the largest acquisition in the company’s history had no one challenging it.

So, if you have team members and friends who frequently play devil’s advocate, encourage them. And, I hope you will consider assigning a person or group of people to play devil’s advocate on all important decisions.

Rohan Rajiv is a first-year student in Kellogg’s Full-Time Two-Year Program. Prior to Kellogg he worked at a-connect serving clients on consulting projects across 14 countries in Europe, Asia, Australia and South America. He blogs a learning every day, including his MBA Learnings series, on www.ALearningaDay.com.

You can also find more infographics like the one in this post on Learnographics, where Rajiv and a colleague use visual graphics to teach lessons and spread ideas.