Business News

Not just management skills – what I learned on an Executive MBA course

By Business & Finance
24 October 2018

 Colm Nee, Executive MBA student at ESMT Berlin, gives an insiders view to undertaking an Executive MBA

Being an effective manager is a balancing act. Two common managerial errors fall at either end of a spectrum – underestimating shared wisdom, and overestimating it. Managers who ignore the advice of their teams and opt consistently to ‘go with their gut’, make decisions tainted by entrenched bias. However, granting equal weight to the opinions of a whole group can equally damage decision making. Recognising and prioritising the opinion of an expert in the group you are managing is an invaluable skill.

These are the key lessons I’ve learned pursuing an executive MBA at the European School of Management and Technology (ESMT) in Berlin. I have always had a strong curiosity about behavioural psychology and as part of the MBA, we had an opportunity to explore how people make decisions both individually and in groups, through an onsite course in “managerial analysis and decision making”.

Should Managers ‘Find the expert’ or ‘Combine the wisdom of the team’?

The most interesting insights we gained into group decision making on the course arose during a survival exercise. You find yourself and a small group of survivors in a hypothetical situation. You must do two things. Firstly, decide whether to try to find help in a nearby town or stay put and wait to be rescued. Secondly, you must sort items from a predefined list (e.g. lighter, map, warm clothing, chocolate, gun) in order of importance to the survival of the group.

Obviously, the items you need depend on your strategy. Prior to the session, we had already completed the exercise separately, by submitting online the ordered list of items. The aim was to a consensus as a small group of 8 people.

What was interesting about the exercise was observing how the group came to making decisions. The conversations were at times very difficult, and everyone found themselves having to make compromises in order to establish group consensus (does this sound familiar?). Afterwards, we found out who the expert in the group was, on the basis of how our pre-module list differed from a reference solution devised by actual survival experts.

In all cases, the performance of the group outperformed the average individual performance. In many cases, the expert still outperformed the group. What was clearly happening was that the expert was making compromises to his/her original and better solution to satisfy the group. In groups where, as our tutor put it, “losers who were wrong for the same reasons” were put with high-performing experts, the group outcome suffered most drastically. In this case the expert had to fight against significant groupthink.

So, can managers learn from this?

If you have a clearly identifiable expert who is miles ahead of anyone else, listen to them. If you’re not sure who the domain expert is, or whether an expert exists for the problem, bring together a group of people with experience in diverse areas. The key is to make people reach decisions about problems before you attempt to decide as a group, to reduce the impact of “groupthink”.

 Acknowledging and counteracting decision biases

What was even more sobering, was a case study where the class had a “do / not do” decision to make on a high risk, high stakes situation. We had all read the case separately beforehand, and then discussed together in class.

It was a great exercise for highlighting decision making bias. Our experienced tutor, Francis de Véricourt, Professor of Management science, was able to point out any logical fallacies and cognitive biases we were using to justify our opinions. Interestingly, the open and energetic discussion itself led to people being even more entrenched in their prior opinions. Francis explained that the discussion was fueling us with more arguments to use against the other side, rather than expanding our information set.

At the end Professor Véricourt referred to the one person in the class of over 50 who changed their opinion as an excellent decision maker. His point was crystal clear, and I cannot imagine that it is possible to learn this lesson in a richer way nor in a safer environment.

I have integrated these principles into my day job leading a team of a team of 10 software engineers and quantitative analysts at a large global financial services company and found them to be endlessly beneficial.