#Midweek 129 - How to Get the Most out of Team’s Collective Wisdom As a Manager
Hello, curious thinkers👋
Here’s a 2-min survey to help me understand your decision-making environments better so that I can offer you tailored courses and products that you can use everyday.
At the start of the weekend, I wrote about the value of tapping into the wisdom of the crowds. Multiple independent perspectives can help build a model that is more accurate than that of any one person’s.
But you can hit a snag with this approach when looking to apply it in your team or business unit. Keeping perspectives independent is notoriously hard, especially in a hierarchical setting like the modern corporate organization.
As a manager mulling over the annual sales forecast or the price for an acquisition target or any other meaningful estimation problem, you face two problems even before you start.
🔺Problem #1. Independent judgments are rarely independent. If you hear someone else’s estimation first, your own judgment will be pulled closer to what you heard. It’s called anchoring. Anchoring is pernicious because knowing about it isn’t enough to safeguard you against the effects of it.
1️⃣Was Taylor Swift more or less than 9 years old when she had her first American Top 40 singles hit?
2️⃣How old was Taylor Swift when she had her first American Top 40 singles hit?
Did you come up with your estimate by adjusting up from the absurdly low 9? Had the number in the first question been 19 instead of 9, it’s likely that your second answer would’ve been a higher number. Yet, you understand that the two answers should not be connected.
Anchoring is priming. You see it on menus. You see it with discounts. It is so common because it is one of those tilts of the human mind that are hard to spot in oneself.
🔺Problem #2. If you form an estimate first and then hear about the estimate of someone from your team, you’re likely to judge any difference in your favor. That is, you’re likely to believe you’re right and your team mate is wrong.
Repeated studies done with parents, national security experts, and cross-profession adults point to this finding. The more the difference in opinion with ours, the more harshly we judge others’ opinions on a topic. Our self-narrative in such situations is remarkably the same: You’re wrong to disagree with me.
There’s a third and a fourth problem, if you may.
🔺Problem #3: Professionals are as susceptible to anchoring as are amateurs, but only professionals have a reputation to defend so they will deny the influence of anchors. Your team members, who are paid for their expertise, may refuse to admit that their estimates have been influenced by hearing about those of others.
🔺Problem #4: You’re the boss. As a boss you may privilege your own judgment. You may think your judgment counts for more owing to your richer experience and intuition, and so you use your authority to amplify your opinion and discount others’ opinion.
The complication though is not with the judgment of any one person, whether or not you’re the boss. It is what an individual thinks of their own judgment in relation to the judgment of others.
‘What should a manager do if she wants to get to better judgments and minimize the costs that arise from people getting enamored with their own opinions?,’ asks this 2018 Harvard Business Review piece on how to use the wisdom of the crowd.
🔓The answer is straightforward. Pre-commit to aggregating opinions.
The specific strategy will depend on the type of question a team faces. However, committing to an aggregation strategy ahead of time can protect teams from the negative social consequences of evaluating each other’s judgments in light of their own previously-formed opinions.
Make a pact to protect yourself and your team members from their own tendency to anchor to random stimulus and to over-index information that corroborates their beliefs.
Teams facing quantifiable questions should aim for strategies that, as much as possible, remove human judgment from the aggregation process. A team estimating how much a market will grow faces a quantifiable question; they should pre-determine an algorithm (such as a simple average or median) for combining the opinions of different team members.
When it comes to an estimation problem, don’t let your team behave like a team. Don’t have them talking to each other as part of the decision-making process. Let each person think and estimate independently. And then you combine the group’s view while rejecting any one person’s estimate, no matter how correct you think it is. It may seem counterintuitive but research shows that it’s more effective.
You have my sympathies if you think all this is too much work. The odds are stacked against you. But remember that very few managers and leaders actually set in place such decision-making behaviors and structures. On top of these corrective steps, there is a preventive step. Build your team and organization to be, in the words of Tim Urban, an Idea Lab, not an Echo Chamber.
See you on Friday! Remember to do this for me.