Making Decisions – Vol. IV: Fundamentals of Group Decision-Making

     In business contexts, many decisions are made by a group instead of an individual.  The same is true for other types of organization as well, such as nonprofits, educational institutions, and legislative bodies.  Group decision-making has its advantages and its disadvantages.  There are several other considerations also relevant to group decision-making, such as selecting members, defining decision rules, and choosing or developing a process to follow.
     Successful group decision-making relies on a disciplined approach that proactively addresses common pitfalls.  If an organization establishes a standard that defines how it will form groups and conduct its decision-making activities, it can reap the rewards of faster, higher-quality decisions, clearer expectations, less conflict, and greater cooperation.

Why make decisions as a group?
     Group decision-making can be a powerful tool for any organization, if executed properly.  Exploiting its advantages provides benefits that extend beyond the current decision or project to routine interactions and future projects.  These advantages include:

• Each group member is a source of data and information that can be used to improve decision quality.  If a decision-making group consists of department managers, for example, each acts as a funnel to direct the full intelligence-gathering power of his/her respective department to the group.  Quality decisions require quality inputs.
• Each member – and his/her support network – also analyzes the information collected by the group, resulting in more-thoroughly vetted, validated, and cleansed information.  Faulty information is less likely to influence the decision.
• Varied experience of members leads to a broader range of ideas and more creative development of potential solutions.
• Open discussion of member perspectives can reveal and temper biases that could otherwise unjustifiably influence the decision.
• Multiple viewpoints provide for more-accurate risk assessments and identification of key challenges relevant to the alternatives under consideration.
• Broader involvement of members throughout the organization fosters greater understanding of and commitment to chosen strategies.
• Dispersion of responsibility encourages groups to establish higher performance expectations for the organization that energize employees and fuel improvement.
• A decision-making group may consist of members that would not otherwise work directly with one another.  The opportunity for these “strangers” to interact can yield a more cohesive team.
• The process and decision logic is more transparent when arguments are made in an open forum.  This format provides a mentoring opportunity to improve others’ decision-making capabilities through simple observation of group interactions.  To provide an equivalent training experience, an individual decision-maker would have to explain his/her entire thought process in detail.  An individual’s presentation of his/her thought process is notoriously ineffective; it is often an incomplete discussion of tradeoffs and biases are rarely confessed.

     There are also several characteristics of group decision-making that are generally considered to be disadvantages.  It is more useful, however, to frame them as caveats, because the detrimental effects can be avoided if members are aware of the risks and actively engage in countermeasures.  These caveats and countermeasures include:

• Discussion and debate can be time-consuming.  A group should be convened only to make decisions of sufficient complexity and consequence to warrant the expenditure of resources required to properly execute a group decision-making process.
• Groups are susceptible to self-induced distractions; discussions may veer off-topic.  Each team member must be willing to identify a discussion thread as tangential to the decision and guide the group to more-relevant topics.
• The onset of groupthink could nullify the benefits expected from a group process.  One or two members could be assigned the responsibility of “playing devil’s advocate” to encourage robust debate and thorough analysis of alternatives before a decision is made.
• A dominant personality or a person in a position of authority may unduly influence the decision, creating an illusion of agreement among group members.  Including a moderator or facilitator can ensure that all members’ inputs are considered.  (See Meetings:  Now Available in Productive Format! for additional guidance.)
• Dispersion of accountability for a decision or its consequences may reduce members’ interest, commitment, or effort.  Only those to whom the decision is significant should influence it.
  
• There is potential for conflicting agendas among group members to divert attention from the organization’s best interests.  If any member attempts to unfairly sway a decision solely for self-serving purposes that are inconsistent with organizational objectives, that member should be removed from the group.  This includes providing misleading information to the group, or withholding information, in order to favor one’s own position.

     Note that the dispersion of responsibility and accountability are opposite sides of the same coin.  Whether dispersion becomes an advantage or disadvantage depends, in large part, on the makeup of the group and the character of its members.  Similarly, the potential for groupthink or a domineering personality to result in a suboptimal decision is strongly influenced by the selection of group members.  Because it is a pervasive theme and a critical consideration in group decision-making, member selection is the topic to which we now turn.
 
Who should be in the decision-making group?
     Decision quality and efficiency will depend on many factors; chief among them is the membership roster of the decision-making group.  This is true because the groups’ membership has a compound effect due to their influence on all other relevant factors.  Jim Collins’ business leadership metaphor, from his book Good to Great, is equally fitting for decision-making groups at any level of an organization, from front-line operations to executive leadership:
     “Get the right people on the bus, the wrong people off the bus, and the right people in the right seats.”
     Whether or not a person should become a member of a group tasked with making a specific decision depends on two factors:
(1) the person’s expertise in subjects relevant to the decision, and
(2) the impact the decision will have on the person’s area of responsibility within the organization.
One method of evaluating these factors for each potential group member is to use the Hoy-Tarter Model.  This model frames the two factors as questions to which each candidate receives (or submits, in the case of self-assessment) an answer of “yes” or “no” to generate a 2 x 2 matrix as shown in Exhibit 1.  Our formulation uses the following questions:

• “Is the decision relevant and significant to this individual?” on the horizontal.
• “Does this individual possess requisite expertise?” on the vertical.

Each candidate is placed in the quadrant corresponding to his/her answers.  Accuracy of answers should be verified, particularly when attained via candidate self-assessment, to prevent inappropriate influence of a decision and shirking.  Those that answered “yes” to both questions (a yes/yes response) are placed in the upper left quadrant of the matrix and invited to join the group; these are the “core” members.  Those with no/no responses are placed in the lower right quadrant and dismissed from further participation.  The remaining two quadrants – the “contingent” members – require additional consideration to finalize the group roster.

     The lower left quadrant is for yes/no responses.  To determine if these candidates should join the group, ask an additional question:  “Are this person’s interests adequately represented by other members of the group?”  If so, this person can be dismissed; if not, s/he may be invited to join the group as a full member or in limited capacity.
     The upper right quadrant is for no/yes responses.  The additional question for this subset is “Will this person’s expertise duplicate that of other members?” or, more simply, “Is there sufficient expertise in the group?”  If the candidate offers no unique expertise s/he can be dismissed.  However, if the person possesses requisite skills not yet available within the group, s/he should be invited to join.
     An additional consideration for the contingent members is the size of the group.  If the group grows larger than the scale and scope of the decision warrants, some or all of the contingent members may be dismissed to maintain the group’s agility and efficiency.  In fact, the core membership should also be reduced if the group is larger than the decision warrants.  Consider likely redundancies in members’ contributions, members’ total workload, and other relevant factors when finalizing the roster.  Candidates in each quadrant can be ranked during the initial evaluations to speed the final selection process should the group’s membership need to be pared.
 
     The Hoy-Tarter Model helps get the right people on the bus and the wrong people off the bus.  If the group needs help getting people in the right seats, there are tools available to help with this as well.  One such tool is Bain’s RAPID Framework.  RAPID is an acronym for the roles assigned to group members.  Exhibit 2 contains a description of each role in the framework, the quadrants in the Hoy-Tarter Model to which each role typically corresponds, and example functions that commonly serve in each role.

Those assigned the Perform role may change as expectations of the expertise required to implement a decision evolve.  Membership in the Decide subgroup will be determined by the decision rule used.  This is the subject explored next.
 
Who should make the final decision?
     The person(s) responsible for making the final decision is defined by the decision rule under which the group operates.  Several common decision rules are described below.

• Unilateral:  A single person has the authority to impose a decision.  This person may be the designated decision-maker due to superior expertise and insight or by being the highest-ranking officer of the organization present.
• Executive Committee:  After receiving all available information, including support for and objections to alternatives, risk assessments, financial projections, and so on, a subset of members impose a decision.  The executive committee is usually comprised of a small number of members to allow a conclusion to be reached quickly and efficiently.
• Plurality:  The alternative for which the largest number of group members vote is selected.  When members must choose from more than two alternatives, a plurality rule may be necessary to ensure that a decision is reached; a majority of votes may not be received by any alternative.
• Simple Majority:  More than half of the group’s members must vote in concurrence for a single alternative.  Often used without the qualifier, i.e. “majority.”
• Super Majority:  Significantly more than half of the group’s members must vote in concurrence for a single alternative.  Two-thirds and ¾ are common super majority requirements, but the organization can define the requirements as it sees fit.
• Unanimity:  All group members must vote in concurrence for a single alternative; the most-extreme super majority requirement (100%) possible.
• Consensus:  All members commit to supporting a decision and aiding execution of a plan created by the group by means of alternative development and compromise.  Disagreement on aspects of the decision may remain, but an outward appearance of unanimity is created as the group agrees to present a unified front.

     Variations on the decision rules described could also be implemented.  For example, large groups may consist of voting members (core group members, say) and non-voting members (Input role-players, perhaps).  The roster of voting members will be larger than an executive committee, but may eliminate extraneous votes, allowing a more expeditious conclusion to be reached without sacrificing decision quality.  The voting members are then subject to the chosen decision rule (plurality, unanimity, etc.).  Other decision rules could also be crafted to suit an organization’s unique needs.
 
How should a decision-making standard be structured?
     There is no single “correct” format for documenting decision-making guidelines.  The document should be consistent with the communication style used by the organization for other standards.  It should also be subject to similar review and revision procedures.
     The content of the standard will also vary among organizations, though the inclusion of certain types of information should be considered a basic requirement.  A discussion of these “basics” follows.
The process used to form decision-making groups.  The Hoy-Tarter Model has been presented as one option; other methods could also be used.  A simple “at leader’s behest” could also be specified, though any organization choosing this unstructured method should be aware of its limitations.  Namely, favoritism and reinforced biases may result in a predetermined outcome, while relevant information and affected individuals are indiscriminately excluded.
Tools and techniques to be used.  Recommendations and/or requirements for the use of specific decision-making aids favored by the organization should be identified.  Any that are in disfavor should also be noted to prevent rejection of a group’s analysis.  Circumstances that require or prohibit use of a specific tool should also be identified (more on this in the final point).
The decision rule.  Decision rights must be defined to establish a shared understanding of responsibilities within the group.
A “Hung Jury” clause.  If a group is unable to reach a decision by ordinary means, a process for resolving the impasse should be predefined.  For example, a group operating under a consensus rule that is unable to reach consensus in a reasonable period of time (also requiring definition) may be directed to an arbitrator for resolution.  In another example, a group requiring a majority vote is evenly split.  In this case, a higher-level manager could be designated to provide the tie-breaking vote.  This stipulation should be included for each type of decision rule available to the organization that could result in deadlock.  This clause is not required for unilateral decisions, for example, as a “tie” is impossible.
Any criteria that change the process requirements.  Application of the “basics” discussed could vary from one decision to another within an organization.  Financial implications, the anticipated duration of a project, the range of expertise required, or other factors may influence an organization’s approach to a decision.  For example, a short-term project with a small budget may be executed within a single department.  Thus, unilateral decisions by the department manager, reached with minimal formality, may be acceptable.  However, a long-term project that affects several departments and requires substantial capital expenditure may warrant a thorough financial and environmental analysis that involves upper management.  Predefined thresholds for these requirements will ensure that accepted practices are followed, minimizing the number of decisions that stall.  Restarting a decision process causes duplication of effort and reduces the organization’s efficacy.
     Decision-making guidelines could also reference requirements for meetings, progress updates to management, or anything else the organization deems appropriate and valuable.  Larger organizations are likely to include more detail, while smaller ones may require more time to develop their standards fully.  With periodic review, standards and guidelines evolve and improve to meet the needs of an organization as it matures.
 
     For customized guidance, contact JayWink Solutions for a consultation.  General questions can be left in the comments section below.  As always, you’re invited to let us know how we can assist you and your team.

     For a directory of “Making Decisions” volumes on “The Third Degree,” see “Vol. I:  Introduction and Terminology.”
 
References
[Link] “Seven Methods for Effective Group Decision-Making.”
[Link] “The Hoy-Tarter Model of Decision Making.”
[Link] “Bain’s RAPID Framework.”
[Link] “7 Ready To Implement Group Decision Making Techniques For Your Team.”  Anand Inamdar, UpRaise, June 14, 2019.
[Link] “17 Advantages and Disadvantages of Group Decision Making.”
[Link] “Managing Group Decision Making.”
[Link] “Group Decision-Making : it’s Advantages and Disadvantages.”  Smriti Chand, Your Article Library.
 
Jody W. Phelps, MSc, PMP®, MBA
Principal Consultant
JayWink Solutions, LLC
jody@jaywink.com