Is a lack of cognitive diversity holding partnership performance back?
It was Matthew Syed in his book, Rebel Ideas, who highlighted how catastrophic cognitive homogeneity could be, when he described the cumulative failures of the CIA and FBI in anticipating the Twin Towers attack. It was a result, he believes, of a competitive lack of sharing of vital information, but also a propensity to hire analysts who fit a historical pre-determined mould, and therefore thought the same way.
While rarely demonstrated at this disastrous scale in corporate business, ‘groupthink’ can still be suffocating to business, stifling creative problem solving, and creating barriers to effective change management and high performance. But what do we mean by groupthink, and what are its potential characteristics? In this context, it manifests as the automatic acceptance of historical practices, or a belief that things are done the way they are for good reason. Little is seen in terms of new, challenging, critical thinking about the way in which things are done. Everybody has learnt to accept each other’s thought processes, and these have then aligned and merged into one.
The partnership conundrum
It’s maybe not surprising that this is a common challenge for partnership organisations. By the time they are invited to be partner, having been initially selected as like-minded individuals (typically from a similar background, education or professional training), those making partner are broadly the same as everybody else on the board. From a leadership team capability perspective, this can result in extremely narrow leadership expertise, when what is needed for the business to perform at a higher level is a team with the breadth and diversity of new capabilities.
When Blackmore Four are working with a client team, we often find that the question, ‘Why are you doing this like this?’ results in 10 people around the table saying, ‘It’s because we’ve always done it this way; we all agree it’s the right thing to do’. Despite the fact that they’re very different people, they’ve developed a behavioural norm of all thinking the same and have become accustomed to accepting the groupthink.
A specific danger is often that one person who is quite confident in the team articulates something effectively as fact, and then everybody accedes without really questioning. That may be a CEO or Managing Director, or it could just be a longstanding member of the team, but their influence is such that if they’ve said it, it must be true.
This is driven from a collective position of accepting things at face value, rather than generating a sense of challenge at source, i.e., to be critical of everything that’s presented, in a constructive way. Where leadership teams can really struggle is with having those candid conversations with each other, and confrontational conversations with their direct reports. Not confrontational in a heated or over-emotional way, but in just confronting a problem or identifying that a solution isn’t working. We find that people are not comfortable with challenge because their starting position is one of uniform acceptance of the way things are. It becomes really difficult and feels abnormal to start calling things out as not being right.
So how do we fix it?
It is possible to retrofit the solution, because those individuals at the table are different people with different experiences and perspectives.
We can do two things: firstly, we can help people on an individual level to develop the skills necessary to take a different perspective from that which comes naturally. So, if an individual has the tendency just to generally go along with the received wisdom, because that’s just how things are done, with help they can develop the skill to actively step back, critically evaluate and then continue in a different way.
But there also needs to be some reflection on what types of skills are actually necessary for the business. If the point has been reached where the leadership team are already broadly similar in thought, with similar skills, the chances are that while these might be totally relevant for the primary board objectives, they might not have the skills to tackle any others.
So secondly, to break that groupthink, the leadership team needs to develop a way of working together collectively that utilises the skills of individuals to be more critical and challenging. It’s also important to honestly appraise the skills gap and when it’s appropriate to hire in new people. Even if you’ve only got one or two alternative voices around the table, if they bring distinctly different skills and behaviours, then that will change the dynamic.
In terms of planning ahead, the root of the solution lies in who is hired at the start of the recruitment journey. At what level should they be hired, how will their careers be developed, and how will they develop as individuals? How do you go about finding an appropriate diversity of people, with additional skills and experience, to make sure that you’re not just feeding your leadership team with the same capabilities time and time again?
One of the key topics Blackmore Four challenges a client board on is understanding—and being objective in—their thinking about ownership of the company as a reward mechanism.
In partnership culture, people are often given a seat at the table at the highest level, because they’ve brought in a lot of business and are leaders in their field – their skill set is about delivering revenue. But there is not necessarily a correlation between the ability to deliver revenue and the ability to be a successful strategic leader in business.
In non-partnership businesses, typically there is a hierarchy of ownership, board, then executive. What is needed of the board is detached from what is needed from the executive. With a limited company or PLC, people are appointed to the board based on what they can contribute at a board level. This is detached from ownership, even if some owners still sit on the board. While some focus will be about shareholders, by design and by law, the board represent the interests and success of the company.
In partnerships, roles and responsibilities are merged, because of the ‘ownership as reward’ mechanism for employees. A high performer from beneath the executive level is rewarded with partnership, and therefore board membership, because this has not been detached. They typically also default to be on the executive team as well. But even if they’re not, they are still highly influential, regardless of their capabilities.
While a typical career expectation for lawyers and accountants is to make partner, another contributing factor is the desire to directly align the contributions made to rewards. By becoming a partner/shareholder/owner, the person’s success is intrinsically linked with the success of business overall.
However, the different roles of partner, board and executive should serve different purposes. By conflating these, like most partnerships do, the risk is that none are being addressed in a distinctive, effective way. Professional skill may have raised someone to the board, but doesn’t necessarily mean they have the skills to make strategic decisions. There needs to be an assessment process in place in order to ensure all board members are fit and proper directors.
If the business goal is to be a market leader; if it is to thrive and overachieve on performance metrics, then the people that are bringing in business day-to-day AND those who are setting the strategic direction on the board need to have the range of skills and expertise to do so.
But there is little point in assessing skills capability without a good understanding of what the business really needs to measure it against. First, it is necessary to reflect on the medium and long-term goals and then ask what is needed in terms of leadership skills in order to achieve those.
This happens more frequently in larger partnership firms; partly because individuals are held directly accountable for performance based on their own business case, but also because individuals assessed to be ready for partnership are often done so through both a commercial and a leadership lens, coupling the two together to understand how leadership skills enable the proposed business case. Some smaller partnerships have moved towards this operating model, but in the middle and lower tiers, the tendency is still to operate in a kind of ‘partnership is king’ model, with executive tasks just assumed to happen at some point.
Leadership Needs Analysis
This is the purpose of the Blackmore Four Leadership Needs Analysis. Having a trusted consulting partner who is independent and objective enough to provide guidance through that analysis is key. It can be really hard to see the challenges with objective perspective, and it’s very helpful to have somebody point out where groupthink is leading to agreed focus, despite that focus being on something that is not necessarily the best solution.
To facilitate this, we gather input from people who should, by virtue of their position, know what leadership skills are needed to shape and deliver the business strategy and/or identified priorities. We collect this insight through an objective process and then analyse it along with input from others in the organisation and with reference to relevant external benchmark data. We apply our own critical review, offering robust challenge and external perspective, to facilitate a process where a clear decision is reached on what leadership skills are most important for each of our clients. For example, we might point out: “Part of the strategic plan says that you are going to become known as the digital accountants of 2025, however, there is nothing in the identified leadership skills that lends itself to leading digital transformation or the central use of technology in your business. So then how will you deliver on this?”
It’s a very common issue. If someone is going to lead on an objective, there needs to be some sense of their capability to do so, even if they haven’t before. So, when looking at the leadership team, who do we think is closest to this ideal? Can we help them develop some skills that will get them there, or do we need to hire those skills in? And how do we embed this in leadership decision-making going forward?
There are thousands of partnerships in the UK. But how many have the potential to ‘break out of the pack’ and make it to the next tier? Certainly, a wide range of factors will determine whether or not this will happen, but a diversity of thinking, skills and behaviour within the senior team could well be key.
Blackmore Four are an independent consulting company, offering specialist advice, leadership insight and tailored solutions to businesses looking to improve business performance. Our approach is based on a deep understanding of human behaviour at work and an ability to identify and address the specific leadership and organisational development needs of your business.
If you would like to talk to us about the ways that we can support you in assessing and developing the leadership capabilities in your business, contact us here or call 07734 920 222