Conflict in Due Diligence + Decision Making
Conflict can be a valuable tool in making good decisions.
Being Human: we make emotional decisions - we’re wired to. It’s OK, but it leads us to some bad habits.
We’re trying to predict the future, which is difficult.
We gather information, then make the best decision we can based on what we think will happen.
Or we wing it.
Either one is an emotional decision, which we justify with data.
We often make the decision first, then justify with data.
This is also very human.
The problem is, it leads us to avoid conflicting information that might change our decision.
It’s called Confirmation Bias, and it can be deadly.
Instead of making thorough reference calls, we look for confirmation of what we’ve already decided.
Our perspective re-casts facts to match our pre-determined narrative.
Processes are often ignored in favor of reaching the desired outcome.
Teams see that a leader has predetermined the course of action, so they focus on facts that support the decision.
Iron sharpens iron: The best decisions, however, are often born out of conflict.
Information is presented,
Different potential futures articulated, and
An individual or group makes a decision.
Productive conflict is good for group decision making.
Patrick Lencioni writes about this in his leadership fables.
So does Jim Collins (see Good to Great, Turning the Flywheel).
The trick is that everyone needs to get onboard once the decision is made.
Putting it into practice: When we conduct due diligence at 7Two, we look for contrary evidence, often things that aren’t being said.
A reference might initially sound positive until you realize it’s shallow.
A reference-provider might be side-stepping negative information to avoid conflict.
Drawing this out takes some careful finessing.
Agreement is rare, but consensus is organizationally important.
When we make decisions as a team, it isn’t always easy.
Discussions sometimes last longer than we want.
There’s value in the conflict - productive conflict leads to better decisions.
Ultimately, you want to end up with a decision everyone can implement, despite their initial disagreement. This takes practice, but is a mark of a healthy organization.