Articles Posted in Thinking

To accomplish its tasks with efficiency, a group ought to agree on how it makes decisions. A facilitator can explain that there are four processes to reach a decision. Consensus is one, where everyone agrees that they can accept the final decision. Another is consultative, where a decision-maker excepts input and advice and then makes the call.

A third is the executive decision mode where the top-ranking person decides. The fourth is voting, whether by majority or a higher percentage, to reach a conclusion. These four ways to decide come from David Sibbet, Best Practices for Facilitation (Grove 2007) at 99 (See my post of Feb. 16, 2008: decisions with 42 references; July 28, 2008: values and decisions; and May 18, 2008: data-based decisions; June 11, 2008 #2: drugs that sharpen decision-making; Sept. 9, 2008: information economics and decisions; Oct. 22, 2008: cost-benefit analysis *5; and Nov. 23, 2008: RACI analysis.).

Another stimulating idea from David Sibbet, Best Practices for Facilitation (Grove 2007) at 71, is electronic brainstorming. Have participants at an off-site bring their laptops and install simple group decision-support software. The book mentions software from CoVision and Catalyst Consulting.

If you have a clear set of questions, the lawyers can type on their laptops into the shared database of the software – anonymously – and everyone can read the comments. A good idea is to spend most of the time in discussion, but revert to the software at critical junctions. You might also want to have someone pay attention to themes as they appear in the material entered online. Electronic brainstorming emboldens groups that are reluctant to be open about tough issues, or when a large amount of information needs to be generated quickly (See my post of Dec. 31, 2008: brainstorming with 5 references.).

As part of a strategic planning process or an effort to make headway on a problem, many general counsel try brainstorming (See my post of Nov. 28, 2005: mind-map software helps brainstorm; Dec. 9, 2005: Delphi technique; Oct. 30, 2006: have rules and push participants to prepare ahead of time; Nov. 25, 2006: more techniques to improve brainstorming; and July 21, 2008: brainstorming in groups and with individuals who join them.).

What general counsel may not know, however is “that classic tool introduced by Alex Osborn in 1948 has been proved in a number of studies over the last 20 years to be far less effective than generally believed,” NY Times, Dec. 7, 2008 at BU3. Part of the criticism stems from findings that “have shown repeatedly that individuals working alone generate more ideas than groups acting in concert.” Tossing out an idea for public consideration generates fear of failure, perhaps more acutely among cautious lawyers (See my post of Aug. 24, 2008: lawyers and risk averse behavior with 11 references.). Also, lawyers who want to advance their own agenda may keep their best ideas to themselves until a more opportune time (See my post of Oct. 2, 2008: competitiveness with 29 references.).

In place of benchmarking, the article recommends that general counsel break down processes into separate components, then study and improve those components to find other potential uses. The method is called “systematic inventive thinking.” Imagine analyzing the current process in a law department for selecting law firms, isolating its steps and decisions, and refining or changing them. Innovation is, after all, a continuous process of small and constant change.

RACI refers to four labels for each individual or group involved in a decision process: Responsible, Accountable, Consulting, and Informed. From the ACC Docket, Vol. 25, Sept. 2007 at 44, we learn the application of RACI by the Law Group at Becton Dickinson (BD) to the company’s information-technology contracts process.

For 13 process steps in that process, a Six Sigma team allocated RACI roles to Legal, IT, Finance, Procurement, and Vendor. Among the process steps, there were 23 instances of two roles each. RACI sounds like a plausible way to sort out in a crude fashion the different roles of participants in a complicated set of activities.

Value attribution, according to Ori Brafman and Rom Brafman, Sway: The Irresistible Pull of Irrational Behavior (Doubleday 2008) at 48, is “our tendency to imbue someone or something with certain qualities based on perceived value, rather than on objective data.” It is what compels us to take seriously twaddle from the mighty and ignore wisdom from those we perceive as weak.

Value attribution means general counsel get feted at conferences regardless of their insights or blindness. A well-known law firm basks in value attribution even if the talents of its lawyers in an area of law are sub-par. Graduates of elite schools enjoy the halo effect (See my post of April 13, 2007: “tendency to make specific inferences on the basis of a general impression.”). High billing rates may create the same positive valence of value attribution.

The value that we attribute to someone fundamentally changes how we perceive that person. Studies (cited by the Sway at 56-59) suggest that high fees paid to a law firm may affect our evaluation of how well the firm performed (See my post of April 5, 2007 on this mechanism of cognitive dissonance.). We irrationally credit a firm, lawyer, or position that has exalted status and often irrationally disregard those we feel have not succeeded.

Leonard Mlodinow, The Drunkard’s Walk: How Randomness Rules Our Lives (Pantheon Books 2008) at 191, urges that ”We should learn to spend as much time looking for evidence that we are wrong as we spend searching for reasons we are correct” (See my post of July 10, 2007: the confirmation bias.). Most of us not only rush to judgment but fasten ourselves like pit-bulls to the judgment we quickly reached.
A simple corrective, though hard to push ourselves to do, is to try to disprove our conclusion. Deliberately look for data or opinions that challenge your conclusion and honestly assess them.
The same approach helps unfreeze our frozen ways of thinking about management. The McKinsey Quarterly, 2008 No. 1 at 31, offers good advice from Gary Hamel for general counsel. “To become inspired management innovators, today’s executives must learn how to think explicitly about the management orthodoxies that bound their thinking – the habits, dogmas, and conceits they’ve never taken the trouble to challenge.”

Research subjects had their brains imaged in a magnetic resonance scanner as they drank and rated several wines of seemingly different prices. In fact, the wines were randomly assigned high and low prices. As summarized in Leonard Mlodinow, The Drunkard’s Walk: How Randomness Rules Our Lives (Pantheon Books 2008) at 132,”The scans showed that the area of the brain thought to encode their experience of pleasure was truly more active when the subjects drank the wine they believed was more expensive.”

If wines thought to be expensive alter perceptions of quality, couldn’t the same hold true for expensive law firms? The expectation of quality may trigger neurological differences in how we perceive. High billing rates proclaim terrific quality in law firms, at least in some parts of our brains.

A psychological twist suggests itself. If lawyer A is working with famous (expensive) firm One, how does lawyer B feel who is stuck with unknown (cheaper) firm Two? The prestige of the brand firm probably wears off on the inside lawyer who manages it (See my post of Nov. 28, 2007: branding by law firms with 11 references.).

“Lawyers are generally not fond of images. Words are their trade. Attorneys’ antipathy toward visualization is confirmed in several psychological studies.” This quote comes from the J. of the Legal Writing Inst., Vol. 14, 2008 at 92, and the article footnotes two such studies described in an earlier article.

The blindness toward images among many in-house counsel makes it more difficult to present data visually, as many tools for data analysis draw on non-textual representations (See my post of May 7, 2008: methods to portray data with 9 references and 22 cited in one of them.).

The category images includes more than graphics produced by Excel, of course. Pictures and drawings and Venn diagrams are what most people think of when they use the term “images.” Representations other than text serve excellently to communicate and persuade; in-house counsel should learn to make effective use of images at appropriate times.

Most of us have no inkling how we developed our bedrock beliefs regarding management of people. We may even not know we cherish those assumptions until somebody challenges them, which reverberates to the core of our being. Managers often do not even articulate what they think they believe. Beliefs and values become intertwined with supposed facts (See my post of March 19, 2006: the false fact/value dichotomy.). Worse, our psychological makeup hinders us in a variety of ways.

Managers selectively attend to evidence that supports their beliefs about a person. If a metric, fact, or anecdote reinforces what they believe, they remember it – if evidence is to the contrary, they either never notice it, forget it, or discount it deeply (See my post of April 17, 2006: our tendency to seek confirming evidence; and April 27, 2005: information failures.).

Most managers, confronted with opposing beliefs, fall prey to cognitive dissonance. Where selective attention draws us to what makes us feel correct, cognitive dissonance drives us away from thoughts that cause conflict and uncertainty (See my post of April 5, 2007: theory of cognitive dissonance.).

An investigation of the relationship between hedge fund returns and the academic credentials of their managers’ colleges nudged me to muse about a related study for law departments. As reported by the NY Times Mark Hulbert a few months ago, academics compared the performance of about a 1,000 of hedge funds in light of the average SAT score of the college attended by the fund’s lead manager. The study found “a strong positive relation” between a hedge fund’s performance and the average SAT score at its manager’s school, even on a risk-adjusted basis.

What if someone collected data on total legal spending as a percentage of industry (TLS/Rev) and normalized it by industry (See my post of Aug. 28, 2008: how to correct TLS/Rev across industries.). That person could then blend in the average LSAT score of the law schools attended by the general counsel of those departments and see whether there is any correlation to TLS/Rev (See my post of Nov. 14, 2005: LSAT scores have been on the decline.). My hunch is that general counsel who graduated more exclusive law schools will turn in better performances.

The article speculates that “managers who attended more-elite institutions had better contacts in the business and investment areas,” but thought better networking was a minor contributor to the delta in fund earnings. No, the dominant reason, concluded the researchers, is “the superior talents and higher intelligence levels of the average student at the higher-SAT institutions.” Brains will out.