What is Groupthink and how can it impact your business?

As a small business owner, it’s not unusual to want your employees to pull together, get on with tasks collectively and be supportive of one another’s ideas but at what point can the process of co-operation and collective thought turn to groupthink and become damaging to your business?

What is Groupthink?

The term ‘groupthink’ was introduced by research psychologist Irving Janis in 1972 to describe "extreme consensus seeking tendencies." Janis believed that common sense and problem-solving abilities can suffer when group thinking occurs and there is a fear of challenging group ideas. The groupthink ‘danger zone’ is when the desire to reach an agreement is greater than the desire to think creatively or find the most logical solution.

Why does Groupthink take place?

Janis highlighted three factors that can cause groupthink to happen:

• A strong, persuasive group leader

• Group cohesion at a high level

• Outside pressure to make a good decision

What are the symptoms of Groupthink?

There are a variety of symptoms connected with groupthink. They include:

Peer pressure

It existed at school and it can still exist in the workplace – even at board level! The desire to be one of the gang can take over.

Taking the Moral High Ground

The pressure to conform is even greater when morality is used for a basis of decision making as no one wants to appear unscrupulous.

Censorship

Members of staff may censor their opinions to conform.

Complacency

There have been so many good decisions made by this group that there can’t possibly be a bad one… can there?

Business examples of Groupthink

Swissair

Swissair took a surprising nose dive which many put down to organisational groupthink. The airline was once so financially secure it was referred to as the “Flying Bank”. However, the airline eventually went bankrupt as board members began to believe they were invulnerable and failed to question poor decisions and mismanagement. They made ill-advised acquisitions and failed to respond to up-and-coming budget airline competitors like Ryanair and Easy Jet. They were bailed out by the Swiss Federal Government in 2002 but eventually all operations collapsed.

Marks & Spencer

For more than 100 years Marks & Spencer was held on a pedestal as being one of the world’s foremost retailers. However, in the 1990s the company introduced a globalization strategy that sailed into groupthink territory. Leaders at the retail giant stuck doggedly to their traditional business plan despite increasing innovative competition. There was a lack of non-executive influence at board level and, by 1999, Marks & Spencer shares had fallen by almost 50 per cent.

Volkswagen

Leading car manufacturer Volkswagen was shaken to the core when, in 2015, it was investigated for an emissions scandal that affected 1.2 million VW, Audi, Seat and Skoda diesel cars. The company pleaded guilty to charges in the US and admitted to taking part in a scheme to sidestep pollution rules on around 600,000 vehicles. Many have claimed since that it was groupthink that cost the company its reputation and was responsible for the $4.3 billion Volkswagen has agreed to pay in penalties in the US.

How to prevent Groupthink

• Mix know-it-alls and know-nots for a fresh perspective

• Revisit ideas

• Split into smaller groups

• Create a supportive environment

• Embrace conflict