When Disagreement is Good

by The Staff of the Corporate Executive Board

The Corporate Executive Board (CEB) has found that progressive corporate strategists at some of the world's largest organizations have learned to go beyond just leveraging collective wisdom in the usual ways, to focus in on areas of naturally occurring disagreement within their companies. This diversity of opinion can be mined to reveal a multitude of different independent observations and tacit knowledge that will help, not hinder, your decision making. At the very least, it is a great way to estimate the level of existing uncertainty.

In one example from a CEB client, the strategy team carefully collected the assumptions underlying independent business unit plans. They then used the spread of opinion or disagreement as a proxy for the uncertainty related to major parameters used in their portfolio decision making. This allowed them to discuss disagreements and establish a reasonable range for each major parameter to be used further on in the portfolio decision-making process.

In another example, business unit leaders were asked to put their corporate hats on and independently choose a strategic direction for each of the other approximately 12 business units from a simple but comprehensive menu of strategic alternatives. Again, diversity of choices highlighted areas of uncertainty worthy of further investigation and discussion.

Collectively, your organization probably knows more than you think it does. The caveat is that much of this "invisible" knowledge is fragile and may be destroyed by any premature consensus seeking action (e.g., holding a meeting) that would inhibit executives from revealing their individual opinions and influence them to conform to the norm from that point on. Therefore, engineer a safe way for individual executives to make their views known and first document the diversity of those opinions before initiating any consensus-seeking discussions or making final portfolio decisions.

Before it's here, it's on the Bloomberg Terminal.