Guide to Decision Making: Getting it More Right than Wrong

Chapter 5

Conspiracies of optimism: group dynamics

“How could we have been so stupid?”

John F. Kennedy

ST BENEDICT ENJOINS ABBOTS TO TAKE COUNSEL. His rules recognise that some decisions are too important to be left to individuals. Yet groups frequently make bad decisions. The World Health Organisation (WHO) works through a committee structure with elaborate checks and balances. Yet it seriously overestimated the probable death toll from SARS (severe acute respiratory syndrome) and swine flu. For instance, it advised countries to plan for a worst-case scenario of 7.5m deaths from swine flu. By mid-2010, the final death toll was below 18,000, compared with the normal global death toll of 500,000 from ordinary influenza. Countries that listened to the WHO ended up diverting huge sums of money from their health budgets to buy stocks of vaccine that were subsequently wasted. Similarly, the executive committee in charge of Tesco’s billion-pound project to launch a chain in the United States named “Fresh and Easy” predicted that the venture would be in profit within two years. After six years of operation, Fresh and Easy had lost over £450m.

It is easy to understand why groups can fail. Bringing people together, giving them objectives and bidding them to work like a team regardless of body chemistry may not bring out the best in them. Moreover, almost all groups carry passengers. In a famous experiment, Max Ringelmann, a German psychologist, found that as more people joined a rope-pulling ...