Functioning Groups

It’s clear that the individuals making a decision will have a major impact on decision quality. But the way they interact as a group is also important. Before you can make a good decision, you need to understand how the decision-making group functions together.

We use the term decision-making group here to reflect that not all risky and important decisions are made by established teams. For example, major investment decisions may involve people from multiple organizations working together for the first time. In using the term group, we acknowledge that it is highly desirable for the decision-making group to behave as a team—mutually accountable and committed to a common

Table 4.3 Factors Influencing the Perception of Decision-Making Groups





Propinquity is about closeness and describes how much the decision outcome matters to the group. Leaders must understand propinquity levels and address them explicitly.


Performance of the group is affected by the relative power between various individuals. Leaders should be aware of this and aim to reduce any unhelpful influence.



Group dynamics influence belonging, social influence, and subsequent behaviors, including expressed perceptions of risk. They need to be actively managed to ensure optimal behavior.

Team maturity

Decision quality is influenced by the maturity of the group. Newly formed groups will behave differently from those that are more familiar and settled. A familiar and settled group is not always an indicator of maturity and effectiveness.



Leadership styles vary on a spectrum from dictatorial to facilitative. Leaders need to choose a style that is appropriate to the decision context.



Culture has the potential to influence any of the other characteristics above. Understanding the prevailing culture helps in predicting likely behaviors. Leaders are responsible for establishing the appropriate risk culture, relevant to making risky and important decisions.

purpose, goals, and approach. However, you cannot assume that they will act like a team, and so you’ll need to proceed with that in mind.

Unpicking the triple strand of influences on perception as described in the previous chapter is complex enough for individuals. When a group is involved, the perceptions of the group are not some sort of average perception. Additional factors come into play with the potential to seriously skew the rationality of the decision-making process. These factors are presented in Table 4.3, and include:

  • • Propinquity
  • • Power
  • • Group dynamics
  • • Team maturity
  • • Leadership style
  • • Organizational culture


When considering the members of the decision-making group, including yourself, the question to ask is “Who cares the most?”—who has the biggest stake? the most to gain or lose? To understand the influence of propinquity on individuals, the motto of the British Special Air Service (SAS) “Who dares wins” can be adjusted to “Who cares wins” or at least, “Who cares the most, fights hardest for what they want.” This is closely related to the affective emotions part of the triple strand for individuals. Taking this idea and applying it to the group, one potential major source of bias is the degree to which your group cares about the decision objectives or one of the decision options.

Two examples might be:

• The organization is in significant trouble, and the decision is about investing very scarce resources to try to maintain a foothold in the market. The decision-making group is made up of all shareholders in the organization. The influence of their stake may drive a cautious shift as, in trying to protect what they have, they talk one another into a more risk-averse attitude than is logical in the situation.

• One member of the decision-making group has invested lots of time and effort working up rheir preferred option. Although not intending to create a conflict of interest, the person is so committed to their option that they are not able to consider alternatives logically. If the person is also highly verbally fluent, the effect of propinquity and the biasing effect of the intelligence trap could be highly influential.

This last example is one of the reasons we recommend that you have a minimum of two viable options in addition to the “do nothing differently” option—to prevent an individual or an alliance within the decision-making group from having the opportunity to present selective information.

The effect of propinquity of an individual on the whole group is also compounded by power levels.

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