The CEO of a large oil and gas company addresses his senior leadership team to find that all financial metrics are pointed in the wrong direction. Their “big idea” was not working out.
Everyone agreed that their idea to convert raw peanuts into jet fuel was bold and creative. R&D produced weekly updates that indicated they were close to a breakthrough. And yet, the R&D director secretly voiced his pessimism regarding a positive outcome.
Informal hallway meetings, after the presentations by the CEO, were frequent. And most lacked optimism regarding the project. Finally, in an executive session, the director of sales spoke up. She asked the CEO why the company would continue to spend money on a project that showed little to no potential and, in fact, might completely ruin the company. The CEO explained that he was under the impression that everyone “wanted” this to happen. He had heard no negative feedback.
The floodgates opened, and an honest discussion followed. The project was scrapped; the company got back on track.
In 1974, Jerry Harvey, a well-known management expert, wrote an article entitled, “The Abilene Paradox: The Management of Agreement.” In this anecdotal story, Harvey shows how a group of people can collectively decide a course of action that is counter to the preferences of many (or all) in the group. This is different from groupthink; it is simply the inability to manage agreement.
... Sign In to read full Article