GROUPTHINK: Leads to poor decision-making.

Kent Rhodes
Kent Rhodes

I’ve been talking about how people make sense of the world and sometimes, as a result, align themselves with other people holding similar views. While this is simply a natural aspect of human relationships, in family businesses, this dynamic can either serve the family and its enterprise in some lasting and meaningful ways or can create rifts between family groups when views are driven by groupthink. This is important in family businesses because groupthink can occur within families as each family member defers to what they think another family member wants.

Bob was the founder of his family’s successful nursery and gardening business. His two sons had grown up in the business and now managed all operations involved in the enterprise. Bob didn’t talk much about retiring and loved coming to work everyday, but he had been increasingly thinking about retiring and the plan he had made with Sally, his wife, included that he would have stepped away from the day to day business to travel, spend more time with the grandchildren and friends. But that plan was five years past due.

Based on a couple of off-handed remarks the boys had made about around the lines of “we couldn’t do this without you, Dad”, Bob had developed the idea that his sons would not be happy if he wasn’t in the office. The boys, on the other hand, were concerned about helping their dad feel valued and needed. Even though they had the entire organization well under their control and they actually wanted him to enjoy a well deserved retirement.

Hence, no one actually examined the assumptions each were making about the other or bothered to be honest about their thinking because they were deferring to what they each thought to be the other’s wishes. Bob and his sons have been participants in groupthink.

Groupthink occurs when individuals make decisions by going along with what they think others want to do without sharing differences of opinion, vetting other options, or exploring alternative outcomes. It creates a group mindset that is based on a limited view of important issues combined with a low commitment to bring in as much available information as possible. This leads to poor decision-making and can breed an environment ripe for misunderstanding and conflict.

In a family business, the fact that differences are not talked about opens the door to misunderstanding of individual goals and wishes and can escalate conflict between people by leaving individual assumptions about those differences in those individual goals and wishes unchallenged and left to become “well-known-facts”.

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