How often do we blame leaders who don’t live up to their supposed wisdom and experience? Why did the all-knowing Alan Greenspan miss the housing bubble that launched the Great Recession? Why did Marissa Mayer, the whiz kid from Google, fail to turn around Yahoo? How did the ever-intelligent Barack Obama so clumsily launch his national healthcare plan?
In the Knowledge Age, leaders are the embodiment of meritocracy—power and authority for those with the best talent, skills, and ideas. We praise them in times of success, but when they get something wrong, we’re disappointed. Or worse, we rage about the incompetence of “the supposed elites.”
Of course leaders must take accountability for ultimate performance of their organizations–but in actual practice success is not just a result of their own wisdom; it’s also about—and increasingly more about–leaders’ ability to manage the smarts of others. Great leaders today deftly mobilize specialists and experts around them, and also across networks beyond.
Wrangling The Know-It-Alls
Alas, however, specialists and experts are never infallible; and knowing how to assemble and take best advantage of them is its own leadership art. So what’s the best way to wrangle the “know-it-alls”?
We might begin by first understanding how and why experts can sometimes fail the enterprises they are contributing to. This isn’t just explaining the limits of individual human judgment—there’s plenty of research already on that, and, yes, even specialized pros make mistakes sometimes. The real issue is how experts can waylay or block a leader’s organization from making good decisions collectively.
Mistaken Experts
I owe this insight to some intriguing new research recently published by business professors Juan Almandoz and Andras Tilcsik. Their paper (Academy of Management Journal 2016, vol. 59, no. 4) cleverly investigates how the practice and behaviors of experts themselves can be the ticking time-bomb within organizations—especially in particular situations.
Almandoz (IESE Business School) and Tilcsik (University of Toronto) examined the impact of “domain experts” on corporate boards. They posed an elegantly simple question: when directors have significant professional experience in the industry of the company they are helping to govern, how does that affect its overall performance?
The researchers examined failures and other negative organizational outcomes for a large sample of local banks in the United States, 1996- 2012; and then probed for patterns to explain what happened, focusing particularly on the composition of the boards of the banks.
Counter-intuitively, they found the higher the proportion of domain experts on the banks’ boards—people with deep knowledge and experience in the industry– the greater the likelihood of organizational failure. (Their findings confirmed analogous research about the limitations of board-based experts in other industries, e.g. solar energy).
Why was domain expertise on the board not just an occasional asset but also sometimes a liability for overall performance?
Explaining Performance Decline
Three themes explained the higher-than-expected rate of performance decline (or even disaster). The researchers’ conclusions will be quickly recognized by anyone who works with experts today.
First, specialists sometimes offer advice that is sullied by “cognitive retrenchment” –framing strategic challenges following current orthodoxy, and underappreciating emerging changes in their company’s operating environment; second, experts can be guilty of overconfidence—trusting too much their own ability to see and analyze problems; and, third, experts limit “task conflict”—a fancy way of saying specialists can be prima donnas who shut down challenges to their views by others.
In sum, experts can get it very wrong because they get stuck in their self-assured, arrogant ways. Their wisdom and confidence become blinders to urgent reality and their behaviors block more creative thinking by the organization they serve.
Sound familiar?
But One Critical Condition
Almandoz and Tilcsik contextualized the conclusion with one all-important condition. Though board-level domain expertise was indeed helpful in stable and “normal” operating conditions in the banks they studied, it was more conducive to organizational failure in situations of high decision uncertainty. More negative outcomes prevailed when there was unpredictability caused by, say, rapid asset growth by a bank, or if an institution was trying to compete in a fast-changing market.
Poor performance thus actually resulted from what might seem a confounding paradox: the more ambiguous the situation, the more a leader might look for guidance from directors “who really know”—but then get less good advice from their expertise because it is tinged by overconfidence or yesterday’s assumptions. The experts’ mindsets and practices, by blocking more discussion or non-traditional ideas, often throttled their companies’ chances to change direction and thrive—or even survive.
At first this narrowing of the conclusion to “conditions of uncertainty” might sound like a pretty limiting condition. But how rare is uncertainty in today’s turbulent world? Who isn’t trying to navigate some uncharted waters of global competition? Deal with unpredictably disruptive technologies? Foresee unimaginable financial and political risk? If uncertainty raises the negative risks of expertise, the dangers of depending too much on “smart people” is surely rising every day.
The Double-Edged Sword
So what’s a leader to do? Who can afford not to call on experts when going into political or business battle? But when you do, how do you also ensure they don’t impose the behavioral bottlenecks and cultural vulnerabilities for your organization, such as those that Almandoz and Tilcsik discovered in their study?
My own research, and familiarity with emerging practice of many leading practitioners in cognitive science and organizational design suggests several ways forward. For convenience, I map some suggestions to each of the three expert-related liabilities identified by Almandoz and Tilcsik.
Manage Against Dysfunctions
1. Offset experts’ “cognitive retrenchment” by “opening up” the organization. Leaders today are increasingly exploring how to source new ideas from across the silos of their company and beyond its boundaries. They’re motivated by the fear of fighting battles with yesterday’s assumptions and models, and the biases of “not invented here”—even if those once produced “best in class.” Whether it’s co-creating products and services with customers, pursuing open innovation competitions, launching cross-company conversations to build strategy “bottom up,” building networks of problem-solving communities or interconnecting “teams of teams”—the best leaders are not just tapping into wider expertise, but also building networks that hedge against excess influence of any small circle of “knowledgeable” (or maybe not-so-knowledgeable) voices.
2. Mitigate experts’ overconfidence with contrarian decision-making structures
In recent years great leaders have institutionalized mechanisms that promote “thinking differently.” In its simplest form, organizations distribute decision-making authority that ensures input and problem-solving with groups beyond the senior executives. Red Hat, for example, recently launched an open decision framework, to guide decision-making in step with its culture of open participation and meritocracy.
More and more companies are building data-driven analytical capability to enhance–or sometimes correct—the judgments of traditional experts. Other organizations now call on scenario planning (pioneered some forty years ago by Royal Dutch Shell) to test alternative futures; some also create “red team vs blue team” problem-solving which pits different approaches (and often competing experts) against one another—to help identify hidden assumptions and more creative strategies. (The methodology was famously used by JFK with the circle of experts and advisors supporting him during the Cuban Missile Crisis).
Still other organizations have employed so-called “pre-mortem” analysis—investing in prospective what-if problem-solving, starting with the imaginative premise that a decision about to be taken has gone on to fail. The exercise is yet another way of surfacing unconsidered assumptions, or implementation traps lurking beneath a pending decision. Pre-mortems can thus help keep the overconfidence of experts in check.
3. Soften “task conflict” imposed by experts by clearly defining process accountabilities
One familiar reason organizational decisions go wrong is confusion about the differing kinds of input and authority related to who has the final say. Some leaders err on the side of engaging—and then ignoring—the input of experts; others too often abandon authority to this or that “advisor” when delegation is not called for. And assumptions about who in an organization has what role and weight for different kinds of decisions are often cloudy—until realities are revealed, too late, as they erupt in after-the-fact finger-pointing.
Good leaders clarify roles, responsibilities and authority for important decisions—before they are made. Multiple tools and frameworks exist to guide such efforts (e.g. the RACI matrix, or Bridgespan’s RAPID). By deploying such frameworks, leaders might specify that experts will simply be asked for input, or they may be charged with more responsibility—but the question of the role they are being asked to play versus that of other stakeholders is specified and agreed upfront. With everyone’s responsibility and authority clear from the beginning, there can be more collaborative problem-solving, and less Monday-morning-after blaming.
Building Learning Cultures
A more general prescription for problem-solving and decision success–especially when experts are involved– is to build an organizational culture that honors learning and continuous improvement across all levels and networks. The organizations with the best collective judgment encourage debate and dissent both high and low, as part of doing business; insist on fact-based analysis; create “safe spaces” for no-recrimination challenge and brainstorming; and provide visible support for learning from mistakes as well as successes.
When leaders set the values and tone for everyone learning for better performance, there’s more chance the gurus will contribute without dominating or getting trapped in their own biases and egos. In such enterprises, domain experts can be the best they can be.
Some Ancient Wisdom About Expertise
An ancient Athenian general called Alcibiades was known for both his brilliance and occasional treachery against his native city in war. The comic poet Aristophanes described the ambivalence of his countrymen, about this man they considered invaluable but also deeply dangerous: “They loved him, they hated him, they couldn’t live without him.”
And so today for you who must inevitably–but also dangerously–depend on experts and deeply experienced specialists to do your job. In the Knowledge Age, you will love them, hate them, but must also find ways to manage them, within and even beyond your organization—however brilliantly wrong they might sometimes be.
Originally published on Forbes.com