AQoL July 2020 | Would You Throw Away an Agreement on An Important Decision?
Obtaining everyone’s agreement on an important issue as valuable as it is difficult. Valuable because it implies people have bought into the idea. Difficult because opinion and views can be diverse and oposed. But would you throw it away when you have it? Alfred P. Sloan Jr., the legendary Chairman of General Motors did throw it away once.
Sloan adjourned a Board Meeting soon after it had begun saying, “Gentlemen, I take it we are in agreement on the decision here … then I must propose we postpone further discussion of this matter until our next meeting to give ourselves time to develop disagreement and perhaps gain some understanding of what the decision is all about.”
People, howsoever senior and experienced they might be, sometimes agree on matters quickly, too quickly. They arrive at what is called False Consensus. It occurs for many reasons, usually because they have not applied their minds.
Sloan recognised the risks of a decision that had not been thoroughly discussed.
He knew people can be biased and not realise it. So, he sent his directors back, to come up with reasons why the Board should consider alternatives.
GM’s pioneering strategy
Under Sloan’s leadership General Motors introduced segmentation and differentiation for the first time in the automobile industry. They offered ‘A car for every purse and purpose.’ The strategy proved so successful that GM overtook Ford Motor Company in the late 1920s to become the largest automobile manufacturer in United States. It retained the lead through Sloan’s tenure of over thirty years. Later it became the world’s largest corporation.
The work of leadership
Yet, Sloan has been criticised for excessive focus on objectivity. Some cite the insular culture of General Motors as one of the reasons for its struggles and later decline in the 1990s. Nonetheless, this anecdote offers a valuable lesson for us.
Wise leaders create an environment in which constructive discussion and debate flourish. They inculcate a culture of deep deliberation, even dissent. Because careful thought and diversity of opinion are imperative for sound decision making. And that is the work of leadership.