The Power of Dissent: How Disagreement Drives Better Decisions (in the Boardroom and Beyond)
Exploring the critical role of constructive disagreement in corporate decision-making
The key work of an Executive and Board of Directors comes down to judgement and decisions.
Decisions — to take or not to take — becomes the most important aspect of their work.
Drucker was a big proponent of the importance of decision-making as individuals and as groups. He had a great story about the decision-making of a group. About dissent as a critical aspect of decision-making.
Peter F. Drucker in his seminal work Management: Tasks, Responsibilities, Practices how General Motor’s (GM) CEO Alfred P. Sloan (one of the critical CEOs in the early 20th century America) modelled this before one of his top committees saying,
“Gentlemen, I take it we are all in complete agreement on the decision here.’ Everyone around the table nodded assent. ‘Then,’ continued Mr. Sloan, ‘I propose we postpone further discussion of this matter until our next meeting, to give ourselves time to develop disagreement and perhaps gain understanding of what the decision is all about.”
In a normal environment, we look for confirmation around the table. We look for what we all can agree on. Sloan emphasised the importance of dissent or disagreement. Why?
From years of strategy and innovation work, around Australia and the world and working with senior executives in large and small organisations, it is clear to me that there is no one right answer. While supporting a large $100B Euro organisation, I started with the twin questions of “who is our customer” and “what does the customer value?”. There was agreement among the top leadership around the customer, and when it came to value, there was tremendous disagreement. This is precisely what I wanted. This enriched the conversation for everyone and provided critical insights for the organisation.
As Roger Martin would say, the opposite of a good strategic choice is also right. It just depends on the context. So the question is not whether this particular choice is right — whether this particular choice is right for us.
If there is no dissent, then we are not actually exploring the various options and discussing the opposite strategic choice too.
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In design, the culture is strong on critique. The idea is to have robust conversations about that particular issue before we decide. I have been part of conversations where the critique process can be brutal, but useful in the end.
In boardrooms, this is important. Are Directors doing their duty by questioning the logic of the decision? Do they have different opinions and questions about the same decision? Is the Chair facilitating this openness of dissent and disagreement?
In the famous Centro Case, ASIC vs Healey (2011), each director is expected to “take a diligent and intelligent interest in the information available to them, to understand that information, and apply an enquiring mind to the responsibilities placed upon him or her”.
Let’s look at the alternative.
In the end, it all ends up in mediocrity.
Dissent is critical for Decisions. Build that into your decision-making process.
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4moThe designed quote was right to remove the word "Gentlemen" and instead use "all"
Delivery-focused policy and strategy executive | Trusted senior adviser
4moGreat quote, Suhit Anantula MBA, MAICD, and as topical today as at it was when it was first uttered - including beyond the private sector.
Strategic Innovation | Sustainability | International Trade | MBA GAICD FGLF
4moI have seen the conforming model in Boards, mostly given the respect for a Chair’s experience and CEO’s strong character. The benefit of several heads thinking together is to bring different perspectives and approaches to problems and solutions…and not just disagreements. Managing this process without giving rise to opportunities for confrontation is key and reflects the maturity of a Board and organisational culture.
Global Innovation & OpEx Executive
4moThis. If EVERYONE is in agreement around a solution, it’s a bigger issue than simply that particular problem. You also haven’t built a team with at least a few divergent thinkers at the table. Organizations can’t thrive over the long term without divergent thinkers