How can one explain the nearly uniformly positive – and greatly mistaken – assessments by “experts” about dot coms, the value of Telstra II instalment receipts and a variety of other financial matters during the past several years?

Begin with an innocuous observation: at some point in one’s life everyone is a member of a group oriented towards a particular goal. Perhaps on the assumption that two or more heads are better than one, people generally consider that the decisions of groups will be superior to those of individuals. Accordingly, businesses, non-profit organisations and governments from local to national levels rely heavily upon groups, teams and committees to make decisions. Yet people acting in groups do not always make good decisions. Quite the contrary, they often make mediocre and occasionally disastrous choices. Juries, for example, not infrequently render verdicts that contradict the evidence presented; political parties and civic groups regularly adopt fashionable or radical or nonsensical stances before they consider these positions’ ramifications; and boards of directors, military strategists and myriad other groups constantly concoct plans that in retrospect are clearly ill conceived.

A paradox also presents itself: powerful groups, i.e., those having access to the best brains, information and other resources, are disproportionately likely to make choices – including the decision to do nothing – that lead to disaster. Examples include the attack on Pearl Harbour (from both American and Japanese points of view), the formulation and implementation of the Marshall Plan, the outbreak of the Korean War, the Bay of Pigs débâcle and Cuban missile crisis, the Vietnam War, wars on poverty and drugs, Watergate, the Challenger space shuttle explosion and the attacks on the World Trade Centre and Pentagon. (These governmental examples do not imply that the public sector possesses a monopoly on calamity: a lengthy list of private sector catastrophes could be assembled with ease. In 2002, AOL-Time Warner alone generated losses that competed in magnitude with America’s budget deficit).

Irving Janis (1918-1990), a psychologist at Yale University, was puzzled by the surprising tendency of groups of intelligent, hard-working and well-resourced people to make unsound and ruinous decisions. A cause, he discovered, was a condition he termed “groupthink.” His widely cited book, Victims of Groupthink (1972), presented a series of detailed studies of foreign policy decisions. A feature of many of these decisions – and, more generally, of decision-making within groups – is the emergence of intense pressures upon group members towards conformity. These pressures seriously restrict the range of options considered, bias the collection and analysis of information and promote overconfidence, self-righteous stereotypes and the denigration of outsiders. In so doing these pressures distort decision-making. In this research, which he continued until the end of his life, Janis also identified personality, organisational and political processes that can exacerbate and attenuate groupthink. Victims of Groupthink is widely regarded as a social psychological “classic” and often features prominently in introductory psychology classes (from the cognate field of behavioural economics, see also Letter 9 and Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes-And How to Correct Them: Lessons from the New Science of Behavioral Economics, Fireside, 2000, ISBN: 0684859386).

The crux of groupthink is that members of a group tend to seek conformity with respect to certain attitudes and behaviour that are relevant to the group’s activity. Whether one is a member of McKinsey, IBM or myriad other organisations, a certain “way of thinking and doing things ’round here” tends to exist. In extreme situations, one becomes willing to sacrifice greatly in order to maintain one’s membership, identification with and cohesion of the group. The implicit requirement that members sublimate their views and behaviour to those of the “average member” causes the group (often with the awareness of its individual members) to make poor decisions (see also Paul Hart, Groupthink in Government: A Study of Small Groups and Policy Failure, Johns Hopkins University Press, 1994, ISBN: 0801848903).

Symptoms of Groupthink

Janis organised the symptoms of groupthink into three categories. Type I is characterised by an overestimation of the group’s power, intelligence and morality. “An illusion of invulnerability [is] shared by most members, which creates excessive optimism and encourages taking extreme risks.” Further, there is “an unquestioned belief in the group’s inherent morality, inclining the members to ignore the ethical or moral consequences of their decisions.” Groups that have succumbed to groupthink may, in effect, plan and execute fiascos. Yet all the while their members are happy and confident; and they proceed with the conviction that everything is working well and will conclude successfully.

The distinguishing feature of Type II symptoms is closed-mindedness. This includes “collective efforts to rationalise in order to discount warnings or other information that might lead the members to reconsider their assumptions before they recommit themselves to their assumptions.” Members of groups suffering from groupthink believe that their plan has no flaws, and that it cannot or has not gone awry – even if there is evidence to the contrary.

Further, members of such groups respond to opponents of the plan with mixture of suspicion, hostility and derision. To a considerable extent insulated from outside influences, they tend to adopt and rationalise ideas that are inconsistent with reality. Type II symptoms also include “stereotyped views of enemy leaders as too evil to warrant genuine attempts to negotiate, or as too weak and stupid to counter whatever risky attempts are made to defeat their purpose.” Disdain of those who are not members of the group, and an absence of creativity spurred by influences from other groups, are characteristic of groups within which groupthink prevails.

Finally, the Type III symptom is pressure towards uniformity. This comprises

• “self-censorship of deviation from the apparent group consensus, reflecting each member’s inclination to minimise to himself the importance of his doubts and counterarguments; “a shared illusion of unanimity concerning judgement conforming to the majority view (partly resulting from self-censorship of deviation, augmented by the false assumptions that silence means consent); “direct pressure on any member who expresses strong arguments against any of the group’s stereotypes, illusions, or commitments, making clear that this type of dissent is contrary to what is expected of all loyal members;
  
  
• “[and] the emergence of self-appointed members who protect the group from adverse information that might shatter their shared complacency about the effectiveness and morality of their decisions.”

Self-censorship occurs when group members do not share their own ideas with the rest of the group because they fear that their ideas will be rejected. The resultant “illusion of unanimity” within such groups explains why silence is often interpreted as acceptance. Each individual member of the group is reluctant to disagree with the consensus of the group. Through self-censorship, exerting pressure upon dissenters and “mindguarding the group develops an atmosphere of unanimity. Every person may privately harbour doubts and fears, and may disagree with what is occurring; yet publicly everyone expresses full agreement with the group’s policies.

Consequences of Groupthink

Accordingly, the more cohesive the group the greater the resultant risk of groupthink. In a cohesive group, members are likely to experience subtle but strong pressure to accept without reservation the group’s means, norms and ends. Members also become increasingly reluctant to say or do anything that goes against the grain. Under these conditions, the number of internal debates and the extent of contingency planning – which are necessary for good decision-making – decrease. Groupthink is also disproportionately likely to afflict élite groups or groups which work in isolation. The anointed members isolate themselves from – and regard themselves as superior to – the benighted non-members. Elites tend to maintain strict confidentiality among themselves and to associate only with fellow élites (see in particular two books by Thomas Sowell: The Vision of the Anointed: Self-Congratulation As a Basis for Social Policy, Basic Books, 1996, ISBN: 046508995X; and A Conflict of Visions: Ideological Origins of Political Struggles, Basic Books, 2002, ISBN: 0465081428).

When members of a group work under time, financial or other pressures, then the risk of groupthink rises. In response to such pressures, members of groups often alleviate their discomfort by choosing a plan of action with minimal debate or dissent. Through discussion the group members then rationalise their choice by exaggerating the positive consequences, minimising the possibility of negative outcomes or unintended consequences, concentrating on minor details and overlooking larger risks and issues.

Members of groups that are not afflicted with groupthink tend to make decisions by acquiring and disseminating information, discussing and weighing alternatives, debating costs and benefits, asking questions and seeking new information. Conversely, when a group submits to groupthink its members commit themselves prematurely to a faulty plan of action and do not waiver from it. Members of such a group no longer use effective decision-making strategies. Their specification of objectives and survey of alternatives tends to be incomplete; their acquisition and consideration of information is selective; they neither examine the risks of preferred choices nor reappraise initially rejected alternatives; and they fail to devise contingency plans.

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