A decade after acquiring Gatorade’s parent company and turning that brand into every athlete’s must-have energy drink, Quaker CEO William Smithburg moved in on another drink surging in popularity: Snapple.
Despite a $1.8 billion bid and a lot of unanswered questions, Smithburg received the full support of his board of directors. Three brutal years later, Snapple was
sold for $300,000 and Smithburg stepped down.
“We should have had a couple of people arguing the ‘no’ side of the evaluation,” he said.
Organizations often suffer when devil’s advocacy is in short supply, Chip and Dan Heath illustrate in “Decisive: How to Make Better Choices in Life and Work.”
“We want to avoid the momentary discomfort of being challenged, which is understandable, but surely it’s preferable to the pain of walking blindly into a bad decision,” the authors write.
Some organizations license skepticism by appointing individuals to the task. The best approach is to encourage the entire board to participate in what the authors characterize as “values-based opposition”—avoiding adversarial politics by disagreeing without being disagreeable—and to work as collaborators and analyze options objectively.
Become a better devil’s advocate by following these guidelines, the authors advise:
►Expand the options. Decisions require multiple options, not "yes" or "no" answers. Alarm bells should sound if you’re asked “whether or not” to pursue a single alternative. Ask “What else could we do?” to generate other reasonable courses of action.
►Consider the opposite. Channel the discussion toward objective reasoning by asking, “What would have to be true for this option to be the very best choice?”
Roger Martin, dean of the Rotman School of Management at the University of Toronto, asked this question to defuse a tense negotiation over whether to close a historic copper mine in Upper Michigan. In the end, those who pressed for the mine to remain open conceded the numbers didn’t add up.
►Ask pointed questions. Because proponents naturally offer weighted arguments about an issue, it’s your job to ask pointed but legitimate questions.
The Heath brothers highlight one study that shows a seller wouldn’t willingly disclose a major glitch in a used iPod unless directly asked what problems it had.
►Bookend the future. Don’t base decisions on a single forecast of a fixed outcome. Consider the full range of possibilities, from very bad to very good.
►Honor your core priorities. By identifying and enshrining the tenets that guide your credit union, you make it easier to solve present and future dilemmas.
Always ask, “What kind of organization do we want to build?”
This article appeared in the August issue of Credit Union Directors Newsletter.