A Better Approach to Making Decisions

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Visit arm.com discover. Hello and welcome to the sixth edition of the HBR IdeaCast, a BI weekly audio show from Harvard Business School Publishing. My name is Paul Michelman. I'm an Executive editor here and I'll be your host. Our IdeaCast today contains two segments. Our first segment is a rip from the headlines. Look at the decision making mistakes that contributed to Merck and Company's disastrous experience with Vioxx. Okay, well, maybe it's more of a torn gently from the headlines and intelligently considered look at decision making in light of Merck's Vioxx experience. But the net result for you, our listeners, is the same. A better approach to making decisions courtesy of Harvard Business School professor David Garvin and IdeaCast correspondent Angela Herron. In our second segment, we're joined by business writer Judith Ross, a regular contributor to Harvard Management Update, for a look at how to retain your top performers during times of change. Whether you're aware of it or not, Ross says your best people are more likely, not to mention more able to leave for seemingly greener pastures during major company change initiatives. We'll discuss Ross's research into the subject, which reveals a framework for how to increase the odds of keeping your best people just where they are. Now grab a cool drink, kick off your shoes, and open yourself up to some new ideas. First up, Angela Herron interviews Harvard Business School's David Garvin on Merck's Vioxx calamity and how you can help avoid such a fate in your own organization.

Professor Garvin the headlines have been full of stories lately about the predicament that Merck finds itself in with the withdrawal of their drug Vioxx. A lot of people wonder how could a company filled with smart people, filled with great scientists, filled with people whose responsibility is to make great decisions, how could they have found themselves in this predicament, having made such a bad decision about this product and keeping it on the market?

Probably the best way to understand Merck and Vioxx is to think a little bit about decision making. Not as an event, not as something that takes place at a single point in time, but as a process, an extended social process that accumulates over days, weeks, often months, and involves people at multiple levels of the organization. Once you take that view, you recognize that sometimes decision making processes build in momentum of their own. They begin to develop a head of steam Result is you can't always tell at what point in time the decision was actually made.

What do you mean?

Well, you can't pinpoint individuals at any given time saying yes or no, go or no go. The weight of the evidence accumulates. People start to begin little by little to stuff out their doubts, and you find that the process almost has a preordained conclusion.

Now, is this because people are afraid to challenge authority or they are afraid to say they have suspicions?

It often has a great deal to do with fear. One of my colleagues has developed the concept of psychological safety. The sense that certain environments are safe to speak up, that you won't feel as if you're going to be treated badly or marginalized by other members of the group. When you have psychological safety, you have people who are willing to stop decision making processes before they unravel, to raise the hard questions because they know they'll be listened to.

But what you're describing still sounds frightening. I mean, especially if you're in a minority. What if you're or you don't know if you're in a minority?

Well, it is a good point. Minority views need to be actively supported by leaders. Now, there are a number of different approaches. One is simply to make sure the minority person doesn't stand alone, that he or she has two or three supporters. You have very good research that says when minority is number two, three or four, they're much more likely to be listened to. Second, you can actually design the decision making process to actively stimulate dissent. You can appoint devil's advocates, people whose role is to raise questions, to criticize, to take the obstructionist or difficult point of view by design. You can also insist that people look at multiple alternatives. Not go, no go, but real options. Those options tend to spread the discussion and inform people far better.

So you're almost suggesting that people learn to challenge and learn to say that there's no one decision is right from the get go.

Absolutely. We actually have a term for it. It's a bit jargony, but it's worth understanding. It's called pluralistic ignorance. So think for a moment of a meeting. You went to the meeting, somebody made an abstruse technical presentation, you looked around the table and everybody was sagely shaking their heads in agreement. You shook your head too. Then you walked out and the hallway conversation was all about did you understand that didn't make any sense to me. How about you? What's going on in those settings? Turns out that people believe they're the only ones who have doubts. They're the only ones who have concerns with what they're hearing. Everybody else is presenting a good face. They present it as well. If you train people to recognize this phenomena, they're much more likely to speak up.

You know, as I listen to your talk, Professor Garvin, it strikes me that basically Merck's problem wasn't just one decision involving one drug. It really was a greater problem and in their culture and the way they approach decision making overall. So what advice would you give for managers who want to create a better process of decision making in their own companies?

Well, first let me reinforce your observation because it's absolutely right. Companies have decision making cultures. They have unstated rules of the game about the way they operate. And all too often those rules of the game involves problems or pathologies, unwillingness to speak up, squelching of dissent, delegating upward, any difficult call, perfectionism. So you spend all your time gathering data until by the time you have complete information, the time for effective decision making is passed. What can you do around that? First, encourage constructive conflict. Keyword there is constructive. You don't want dissent just for dissent's sake. You want dissent. In order to get multiple alternatives presented, minority views aired a very practical suggestion as a leader. Don't open the meeting with your point of view or your opinion. It almost always squelches disagree. Second practical suggestion, design the decision making process so it periodically surfaces differing points of view. Here's an take your team. 6, 8, 10 people, divide it in half. Ask one group to come up with one option. Once they presented their case, ask the other subgroup to come up with an opposing or different option. Then have the two groups come together, share alternatives, see if they can integrate and synthesize. And third, strive for transparency. The best decision making processes are those where people understand the rules of the game and all information is up front, shared with all.

My only question for you would be it sounds like you're encouraging people to encourage troublemakers in the companies.

Absolutely. Andy Grove at Intel for many years the CEO, used to call those folks helpful Cassandras.

What does that mean?

Those were folks who would constantly find trouble spots, constantly be crying wolf, constantly saying, this might work, but I see problems. He actively sought them out and put them on his decision making teams. He said they always, always led to better results.

That's great advice. Thank you, David Garvin.

My pleasure.

If you'd like to learn more about David Garvin's ideas on decision making, you can order a copy of his and Michael Roberto's Harvard Business Review article, what yout Don't Know About Making Decisions, available at harvardbusinessonline.org. Next up, retaining your top performers during times of change. Judith Ross, thanks for joining us today.

My pleasure, Paul.

Judith, your recent Harvard Management Update article, retaining Top Performers during Change might have scared a few of our readers. After all, what you're telling us is that during a major change initiative, in addition to all the other things you have to worry about all the moving pieces, all the variables, managers also better be concerned that their very top performers are going to be walking out the door. Why is that?

Well, it's the uncertainty. These people have certain reasons that they're working for you. There's a niche they've carved out for themselves. There's a lot of benefits that they've been counting on and working towards getting by working for you. And when there's a change in the air, all of that is suddenly at risk. So because they've invested so much of their time, energy and enthusiasm into the old way of doing things, they may feel they have more to lose after a change.

Why are top performers more susceptible to these feelings? Or scratch that, why are top performers more susceptible to leaving the organization because of these things than a typical employee?

Well, they have a lot more options than a typical employee. And in fact, if the change is one that, if it's a well publicized one, if it's a big merger, everyone knows about it, people may actually be coming to them to recruit them, the competition, for example.

Gotcha. So what as managers, can we do to head off this problem at the pass?

Well, quite simply, you really have to give them a reason to stay and you have to let them know what's in it for them to stay and that you're going to continue to help them be successful no matter what the change is. And after talking to a bunch of academics and consultants and some managers, I was able to come up with a few steps that you can take to kind of help ease the transition for your top performers.

Great. I think what we'd like to do now is walk through those steps. Before we get into the details, can you rattle off, I believe you came up with six steps. Is there kind of a six step framework? Can you rattle off those six steps for us?

For first of all, you want to give them clear information. You want to, if you can, make them part of the planning for the change. You want to make sure your leadership is presenting a united front or at least appears to be aligned around the change. And you want to approach those who seem to really be resisting the change. Instead of trying to stifle them, you want to approach them and you want to look at what people's personal concerns are. And then the final one is you want to test out some of the details of the change. If you're trying a new software or process, for example, you might pre test that, make sure it's really going to work for your top performers.

Great. So let's walk through each of them in a bit more detail. I believe you said number one was provide clear information.

Yes. As much as you can. You want to. One thing you don't want to happen is the rumor mill to start, start. And they're going to know something is going on pretty soon. No matter how quiet you think you've been about it, no matter how careful, they will get wind of it somehow. And the last thing you want is wrong information getting out there. So you want to talk to them as soon as you can and give them as many facts as you can. And the most important thing is to give them the business case for the change so they can really make up their own mind that it's a good thing for the organization. Don't try to sell it. Give them the facts. And then another benefit of telling your star players up front what's going on is that because they're star players, other people are going to go to them for information too. Just it's a side benefit. But that way you can ensure throughout your whole change effort that everybody is getting factual information instead of rumors.

So in essence, you can recruit your stars to validate the change.

Change.

Validate the value of the business.

Absolutely.

You can get them on your side.

Great. Number two, make your stars a part of the planning.

If you can involve them in planning the change, it's going to make them feel recognized. It's going to make them feel valued. You're asking for their input and you know that's going to give them some skin in the game, so to speak. Are there any risks to involving them in the change? Well, you can't. You have to manage their expectations. You wouldn't want to over promise that you're going to do something and then you can't do it. So I mean, I think you do have to weigh that carefully.

Right. Number three, I believe you said was present a united front.

Yeah, it's really, really important that all of the top leadership of the company appear unified around the change. Because if there's dissension among the ranks, your top performers are real, really tuned into those sort of silent messages. And if they feel that there's disunity, that's a red flag for them, they're going to start looking elsewhere because they may think, well, if they don't all agree this change isn't going to work, that makes sense.

Number four, approach resistors.

Yeah, you don't want to stifle the people that are resisting. You actually want to listen to them. They may have a good idea, they may point something out you hadn't thought of and they may have an issue that's political or something that you can even easily solve with the change. So even if you don't make them advocates for the change, you can at least make them neutral enough that they want to stay. They don't see it's going to harm them.

Right. Number five in some ways sounds related to number four and that is pay attention to personal concerns.

Well, that's really about being a good manager and that you have to know what makes your top performers team tick. If you've got someone whose research is really important to them, they're going to be worried that the change is going to mean that suddenly they're going to have to be doing something other than sitting in their office, focusing quietly on what they're interested in. If you've got someone who's really competitive, you know, maybe the thing to do with them is make sure they know that they're going to continue to be challenged and even maybe discuss what the next big challenge for them is to going going to be under the new arrangement.

And to me, frankly, I think the last point you made, the last piece of advice that your research uncovered is the most interesting and that is pre testing the details of the change.

Yeah, I think the examples I found when I was talking to people was a lot about changing processes or, you know, using different tools to do the work. But you want to make sure when you're making that kind of change that, that it's going to be beneficial to your top performers. I mean, you don't want to make their everyday work turn into a real grind because they can't get what they need to get done. One example I had of that was a sales organization implemented a new software that they didn't pretest and it was unable to track complex sales, which for the really top performers, the people who are bringing in the biggest accounts, that was a huge problem. So you do want to, if you can actually roll out a prototype, even better, if you can give your top performers some input into that prototype, that will not only get them on board, but make sure they can continue to be effective.

Thanks, Judith. Now, what happens when managers fail to keep their key people in the loop during a change initiative?

Well, they're going to imagine that the worst is happening. As one person, one person I interviewed told me, they're not going to be looking for what's good about the change. They're going to be looking for what's bad. And all kinds of small things are going to take on huge importance that they wouldn't have noticed before if suddenly their boss isn't answering their calls right away, where before it, you know, they would have assumed he was busy or he was out of town or something else was going on. And if there's a change and they're worried about it, they're going to think, oh, he's not calling me back, back because he doesn't, he's avoiding me. He doesn't want to talk to me because he's got really bad news for me. Another organization was going through a change, and they were, as a small, homey company was being taken over by sort of an aggressive, you know, reputedly more aggressive organization. And they came in one day and all the coffee pots were gone. The next day they came in, half the lights were out, and they thought they were getting some kind of hidden message from the new big cheese. When it really turned out it was the building manager trying to save money. But people were getting very angry and writing out they were starting to think about resigning.

Thanks, Judith. So are there any lessons in all of this that we can apply outside of a time of change?

Definitely. I mean, I think you want to stay in touch with your top performers at all times. Keep talking to them. I think you should always, you know, be questioning, are they still engaged? Are they getting what they need from the organization? In fact, human resource guru Dave Ulrich, who I recently heard interviewed, mentioned that he recommends having what he calls stay interviews with your top talent, where you ask them, you know, what do you need to remain fully engaged here? It may be that they need more space or they might want to be on a different work project or something like a voice in the executive meeting. But it's one way to just keep them happy and keep them working for you.

Right. You don't know if you don't ask. Right.

Right.

Okay. Thanks, Judith. Good advice.

You're welcome.

If you'd like to learn more about this subject, you can order a copy of Judith Ross Harvard Management Update article retaining Top Performers during change, available at harvardbusinessonline.org. We hope you've enjoyed this edition of the HBR IdeaCast. If you have any comments or ideas you'd like to share about our IdeaCast, please send them to my attention. That's Paul Michelman at this address, ideacastbsp. Harvard. Edu. And if you'd like to catch up on our previous ideacasts, please visit us at our new home on the net, www.hbrideacast.org. thank you, and we hope you'll join us again soon for our next ideac.