Why Great Leaders Don't Take Yes for an Answer: The Leadership Challenge

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Why Great Leaders Don't Take Yes for an Answer: Managing for Conflict and Consensus

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This chapter is from the book

This chapter is from the book 

Why Great Leaders Don't Take Yes for an Answer: Managing for Conflict and Consensus

Learn More Buy

"Diversity in counsel, unity in command."

—Cyrus the Great

In February 2003, the Columbia space shuttle disintegrated while re-entering the earth’s atmosphere. In May 1996, Rob Hall and Scott Fischer, two of the world’s most accomplished mountaineers, died on the slopes of Everest along with three of their clients during the deadliest day in the mountain’s history. In April 1985, the Coca-Cola Company changed the formula of its flagship product and enraged its most loyal customers. In April 1961, a brigade of Cuban exiles invaded the Bay of Pigs with the support of the United States government, and Fidel Castro’s military captured or killed nearly the entire rebel force. Catastrophe and failure, whether in business, politics, or other walks of life, always brings forth many troubling questions. Why did NASA managers decide not to undertake corrective action when they discovered that a potentially dangerous foam debris strike had occurred during the launch of the Columbia space shuttle? Why did Hall and Fischer choose to ignore their own safety rules and procedures and push forward toward the summit of Mount Everest despite knowing that they would be forced to conduct a very dangerous nighttime descent? Why did Roberto Goizueta and his management team fail to anticipate the overwhelmingly negative public reaction to New Coke? Why did President John F. Kennedy decide to support a rebel invasion despite the existence of information that suggested an extremely low probability of success?

We ask these questions because we hope to learn from others’ mistakes, and we do not wish to repeat them. Often, however, a few misconceptions about the nature of organizational decision making cloud our judgment and make it difficult to draw the appropriate lessons from these failures. Many of us have an image of how these failures transpire. We envision a chief executive, or a management team, sitting in a room one day making a fateful decision. We rush to find fault with the analysis that they conducted, wonder about their business acumen, and perhaps even question their motives. When others falter, we often search for flaws in others’ intellect or personality. Yet, differences in mental horsepower seldom distinguish success from failure when it comes to strategic decision making in complex organizations.

What do I mean by strategic decision making? Strategic choices occur when the stakes are high, ambiguity and novelty characterize the situation, and the decision represents a substantial commitment of financial, physical, and/or human resources. By definition, these choices occur rather infrequently, and they have a potentially significant impact on an organization’s future performance. They differ from routine or tactical choices that managers make each and every day, in which the problem is well-defined, the alternatives are clear, and the impact on the overall organization is rather minimal.¹

Strategic decision making in a business enterprise or public sector institution is a dynamic process that unfolds over time, moves in fits and starts, and flows across multiple levels of an organization.² Social, political, and emotional forces play an enormous role. Whereas the cognitive task of decision making may prove challenging for many leaders, the socio-emotional component often proves to be a manager’s Achilles’ heel. Moreover, leaders not only must select the appropriate course of action, they need to mobilize and motivate the organization to implement it effectively. As Noel Tichy and Dave Ulrich write, "CEOs tend to overlook the lesson Moses learned several thousand years ago—namely, getting the ten commandments written down and communicated is the easy part; getting them implemented is the challenge."³ Thus, decision-making success is a function of both decision quality and implementation effectiveness. Decision quality means that managers choose the course of action that enables the organization to achieve its objectives more efficiently than all other plausible alternatives. Implementation effectiveness means that the organization successfully carries out the selected course of action, thereby meeting the objectives established during the decision-making process. A central premise of this book is that a leader’s ability to navigate his or her way through the personality clashes, politics, and social pressures of the decision process often determines whether managers will select the appropriate alternative and implementation will proceed smoothly.

Many executives can run the numbers or analyze the economic structure of an industry; a precious few can master the social and political dynamic of decision making. Consider the nature and quality of dialogue within many organizations. Candor, conflict, and debate appear conspicuously absent during their decision-making processes. Managers feel uncomfortable expressing dissent, groups converge quickly on a particular solution, and individuals assume that unanimity exists when, in fact, it does not. As a result, critical assumptions remain untested, and creative alternatives do not surface or receive adequate attention. In all too many cases, the problem begins with the person directing the process, as their words and deeds discourage a vigorous exchange of views. Powerful, popular, and highly successful leaders hear "yes" much too often, or they simply hear nothing when people really mean "no." In those situations, organizations may not only make poor choices, but they may find that unethical choices remain unchallenged. As Business Week declared in its 2002 special issue on corporate governance, "The best insurance against crossing the ethical divide is a roomful of skeptics...By advocating dissent, top executives can create a climate where wrongdoing will not go unchallenged."⁴

Of course, conflict alone does not lead to better decisions. Leaders also need to build consensus in their organizations. Consensus, as we define it here, does not mean unanimity, widespread agreement on all facets of a decision, or complete approval by a majority of organization members. It does not mean that teams, rather than leaders, make decisions. Consensus does mean that people have agreed to cooperate in the implementation of a decision. They have accepted the final choice, even though they may not be completely satisfied with it. Consensus has two critical components: a high level of commitment to the chosen course of action and a strong, shared understanding of the rationale for the decision.⁵ Commitment helps to prevent the implementation process from becoming derailed by organizational units or individuals who object to the selected course of action. Moreover, commitment may promote management perseverance in the face of other kinds of implementation obstacles, while encouraging individuals to think creatively and innovatively about how to overcome those obstacles. Common understanding of the decision rationale allows individuals to coordinate their actions effectively, and it enhances the likelihood that everyone will act in a manner that is "consistent with the spirit of the decision."⁶ Naturally, consensus does not ensure effective implementation, but it enhances the likelihood that managers can work together effectively to overcome obstacles that arise during decision execution.

Commitment without deep understanding can amount to "blind devotion" on the part of a group of managers. Individuals may accept a call to action and dedicate themselves to the implementation of a particular plan, but they take action based on differing interpretations of the decision. Managers may find themselves working at cross- purposes, not because they want to derail the decision, but because they perceive goals and priorities differently than their colleagues. When leaders articulate a decision, they hope that subordinates understand the core intent of the decision, because people undoubtedly will encounter moments of ambiguity as they execute the plan of action. During these uncertain situations, managers need to make choices without taking the time to consult the leader or all other colleagues. Managers also may need to improvise a bit to solve problems or capitalize on opportunities that may arise during the implementation process. A leader cannot micromanage the execution of a decision; he needs people throughout the organization to be capable of making adjustments and trade-offs as obstacles arise; shared understanding promotes that type of coordinated, independent action.

Shared understanding without commitment leads to problems as well. Implementation performance suffers if managers comprehend goals and priorities clearly, but harbor doubts about the wisdom of the choice that has been made. Execution also lags if people do not engage and invest emotionally in the process. Managers need to not only comprehend their required contribution to the implementation effort, they must be willing to "go the extra mile" to solve difficult problems and overcome unexpected hurdles that arise.⁷

Unfortunately, if executives engage in vigorous debate during the decision process, people may walk away dissatisfied with the outcome, disgruntled with their colleagues, and not fully dedicated to the implementation effort. Conflict may diminish consensus, and thereby hinder the execution of a chosen course of action, as Figure 1-1 illustrates. Herein lies a fundamental dilemma for leaders: How does one foster conflict and dissent to enhance decision quality while simultaneously building the consensus required to implement decisions effectively? In short, how does one achieve "diversity in counsel, unity in command?" The purpose of this book is to help leaders tackle this daunting challenge.

Figure 1-1 The effects of conflict and consensus

Decision-Making Myths

When we read about a CEO’s failed strategy in Business Week, or analyze the actions of the manager profiled in a case study at Harvard Business School, we often ask ourselves: How could that individual make such a stupid decision? My students ask themselves this question on numerous occasions each semester as they read about companies that falter or fold. Perhaps we think of others’ failures in these terms because of our hubris, or because we might need to convince ourselves that we can succeed when embarking upon similar endeavors fraught with ambiguity and risk. Jon Krakauer, a member of Rob Hall’s 1996 Everest expedition, wrote, "If you can convince yourself that Rob Hall died because he made a string of stupid errors and that you are too clever to repeat those errors, it makes it easier for you to attempt Everest in the face of some rather compelling evidence that doing so is injudicious."⁸

Let’s examine a few of our misconceptions about decision making in more detail and attempt to distinguish myth from reality. (See Table 1-1 for a summary of these common myths.) Can we, in fact, attribute the failure to a particular individual, namely the CEO, president, or expedition leader? Does the outcome truly suggest a lack of intelligence, industry expertise, or technical knowledge on the part of key participants? Did the failure originate with one particular flawed decision or should we examine a pattern of choices over time?

Table 1-1: Myth Versus Reality in Strategic Decision Making

Myth 1: The Chief Executive Decides

When Harry Truman served as president of the United States, he placed a sign on his desk in the Oval Office. It read The Buck Stops Here. The now-famous saying offers an important reminder for all leaders. The CEO bears ultimate responsibility for the actions of his or her firm, and the president must be accountable for the policies of his administration. However, when we examine the failures of large, complex organizations, we ought to be careful before we assume that poor decisions are the work of a single actor, even if that person serves as the powerful and authoritative chief executive of the institution.

A great deal of research dispels the notion that CEOs or presidents make most critical decisions on their own. Studies show that bargaining, negotiating, and coalition building among managers shape the decisions that an organization makes. The decision-making process often involves managers from multiple levels of the organization, and it does not proceed in a strictly "bottom-up" or "top-down" fashion. Instead, activity occurs simultaneously at multiple levels of the organization. The decision-making process becomes quite diffuse in some instances.⁹ For example, in one study of foreign policy decision making, political scientist Graham Allison concluded that, "Large acts result from innumerable and often conflicting smaller actions by individuals at various levels of organization in the service of a variety of only partially compatible conceptions of national goals, organizational goals, and political objectives."¹⁰ In short, the chief executive may make the ultimate call, but that decision often emerges from a process of intense interaction among individuals and subunits throughout the organization.

Myth 2: Decisions Are Made in the Room

Many scholars and consultants have argued that a firm’s strategic choices emerge from deliberations among members of the "top management team." However, this concept of a senior team may be a bit misleading.¹¹ As management scholar Donald Hambrick wrote, "Many top management ‘teams’ may have little ‘teamness’ to them. If so, this is at odds with the implicit image...of an executive conference table where officers convene to discuss problems and make major judgments."¹²

In most organizations, strategic choices do not occur during the chief executive’s staff meetings with his direct reports. In James Brian Quinn’s research, he reported than an executive once told him, "When I was younger, I always conceived of a room where all these [strategic] concepts were worked out for the whole company. Later, I didn’t find any such room."¹³ In my research, I have found that crucial conversations occur "offline"—during one-on-one interactions and informal meetings of subgroups. People lobby their colleagues or superiors prior to meetings, and they bounce ideas off one another before presenting proposals to the entire management team. Managers garner commitment from key constituents prior to taking a public stance on an issue. Formal staff meetings often become an occasion for ratifying choices that have already been made, rather than a forum for real decision making.¹⁴

Myth 3: Decisions Are Largely Intellectual Exercises

Many people think of decision making as a largely cognitive endeavor. In school and at work, we learn that "smart" people think through issues carefully, gather data, conduct comprehensive analysis, and then choose a course of action. Perhaps they apply a bit of intuition and a few lessons from experience as well. Poor decisions must result from a lack of intelligence, insufficient expertise in a particular domain, or a failure to conduct rigorous analysis. Psychologists offer a slightly more forgiving explanation for faulty choices. They find that all of us—expert or novice, professor or student, leader or follower—suffer from certain cognitive biases. In other words, we make systematic errors in judgment, rooted in the cognitive, information processing limits of the human brain, that impair our decision making.¹⁵ For instance, most human beings are susceptible to the "sunk-cost bias"—the tendency to escalate commitment to a flawed and risky course of action if one has made a substantial prior investment of time, money, and other resources. We fail to recognize that the sunk costs should be irrelevant when deciding whether to move forward, and therefore, we throw "good money after bad" in many instances.¹⁶

Cognition undoubtedly plays a major role in decision making. However, social pressures become a critical factor at times. People have a strong need to belong—a desire for interpersonal attachment. At times, we feel powerful pressures to conform to the expectations or behavior of others. Moreover, individuals compare themselves to others regularly, often in ways that reflect favorably on themselves. These social behaviors shape and influence the decisions that organizations make. Emotions also play a role. Individuals appraise how proposed courses of action might affect them, and these assessments arouse certain feelings. These emotions can energize and motivate individuals, or they can lead to resistance or paralysis. Finally, political behavior permeates many decision-making processes, and it can have positive or negative effects. At times, coalition building, lobbying, bargaining, and influence tactics enhance the quality of decisions that are ultimately made; in other instances, they lead to suboptimal outcomes.¹⁷ Without a doubt, leaders ignore these social, emotional, and political forces at their own peril.

Myth 4: Managers Analyze and Then Decide

At one point or another, most of us have learned structured problem-solving techniques. A typical approach consists of five well-defined phases: 1) identify and define the problem, 2) gather information and data, 3) identify alternative solutions, 4) evaluate each of the options, 5) select a course of action. In short, we learn to analyze a situation in a systematic manner and then make a decision. Unfortunately, most strategic decision processes do not unfold in a linear fashion, passing neatly from one phase to the next.¹⁸ Activities such as alternative evaluation, problem definition, and data collection often occur in parallel, rather than sequentially. Multiple process iterations take place, as managers circle back to redefine problems or gather more information even after a decision has seemingly been made. At times, solutions even arise in search of problems to solve.¹⁹

In my research, I have found that managers often select a preferred course of action, and then employ formal analytical techniques to evaluate various alternatives. What’s going on here? Why does analysis follow choice in certain instances? Some managers arrive a decision intuitively, but they want to "check their gut" using a more systematic method of assessing the situation. Others use the analytics as a tool of persuasion when confronting skeptics or external constituencies, or because they must conform to cultural norms within the organization. Finally, many managers employ analytical frameworks for symbolic reasons. They want to signal that they have employed a thorough and logical decision-making process. By enhancing the perceived legitimacy of the process, they hope to gain support for the choice that they prefer.²⁰

Consider the story of the Ford Mustang—one of the most remarkable and surprising new product launches in auto-industry history. Lee Iacocca’s sales and product design instincts told him that the Mustang would be a smashing success in the mid-1960s, but much to his chagrin, he could not persuade senior executives to produce the car. Iacocca recognized that quantitative data analysis trumped intuition in the intensively numbers-driven culture created by former Ford executive Robert McNamara. Thus, Iacocca set out to marshal quantitative evidence, based on market research, which suggested that the Mustang would attract enough customers to justify the capital investment required to design and manufacture the car. Not surprisingly, Iacocca’s analysis supported his initial position! Having produced data to support his intuition, Iacocca prevailed in his battle to launch the Mustang.²¹

The nonlinear nature of strategic decision making may seem dysfunctional at first glance. It contradicts so much of what we have learned or teach in schools of business and management. However, multiple iterations, feedback loops, and simultaneous activity need not be dysfunctional. A great deal of learning and improvement can occur as a decision process proceeds in fits and starts. Some nonlinear processes may be fraught with dysfunctional political behavior, but without a doubt, effective decision making involves a healthy dose of reflection, revision, and learning over time.

Myth 5: Managers Decide and Then Act

Consider the case of a firm apparently pursuing a diversification strategy. We might believe that executives made a choice at a specific point in time to enter new markets or seek growth opportunities beyond the core business. In reality, however, we may not find a clear starting or ending point for that decision process. Instead, the diversification decision may have evolved over time, as multiple parties investigated new technologies, grappled with declining growth in the core business, and considered how to invest excess cash flow. Executives might have witnessed certain actions taking place at various points in the organization and then engaged in a process of retrospective sense making, interpretation, and synthesis.²² From this interplay between thought and action, a "decision" emerged.²³

In my research, I studied an aerospace and defense firm’s decision to invest more than $200 million in a new shipbuilding facility; the project completely transformed the organization’s manufacturing process. When asked about the timing of the decision, one executive commented to me, "The decision to do this didn’t come in November of 1996, it didn’t come in February of 1997, it didn’t come in May of 1997. You know, there was a concept, and the concept evolved." The implementation process did not follow neatly after a choice had been made. Instead, actions pertaining to the execution of the decision become intermingled with the deliberations regarding whether and how to proceed. The project gained momentum over time, and by the time the board of directors met to formally approve the project, everyone understood that the decision had already been made.