Summary:
This article proposes and
outlines the method of Corporate Devil's Advocate to ensure valid
decision-making inputs. Herbert and Estes (1977) state that the level of
sophistication required to cope with the environment and its impact creates the
need for "full-time professionals with advanced skills" to
investigate problems and recommend solutions to the overloaded line executive.
However, the analyses of these professionals might possess more influence than
is warranted due to the executive's time and technical skill limitations.
Things such as analytical breakdowns and insufficiencies, improper
assumptions, or uncertainty absorption can often be covered up by the
intricacies of the techniques applied to the problem. All of these things
"can operate to increase the executive's blind acceptance of, and implicit
reliance on, the analytical process."
The
authors review historical examples of formalized dissent, noting that while the
techniques vary widely in specifics, they have in common the careful
structuring of independent reviews, to balance and test the adequacy of an
analytical endeavor. These formal dissenting roles are played by persons
investigating the position or proposal of another, and attempt to expose biases
and inadequacies while generating counter-proposals. One of the oldest examples
of this formalized dissent role, called the "Devil's Advocate," occurs
within the Roman Catholic Church. It has been in use since the early 1500s to
investigate proposals for canonization and beatification. Separation of the
functions of promoter and dissenter ensure that both sides of the question will
be thoroughly analyzed, since the roles are not subject to intrapersonal
conflict by residing in the same person.
The
Process:
The
authors assert that the essence of these techniques can be formalized for use
in corporate decision processes. First, the Devil's Advocate starts with the
analyst's final copy of the proposal, becoming immersed in the report only
after having conducted an independent audit of the problem situation to verify
that the problem identified or assumed is the real problem. Reconstruction of
the analyst's logic and data gives the Devil's Advocate an in-depth trace, and
all fallacies or inaccuracies uncovered must be listed with their impacts on
the recommendation. When the report of the Devil's Advocate is completed, a
special confrontation session is held where the proposing analyst and Devil's
Advocate each present their own efforts to the decision-maker. After a formal
critique of the proposal, the analyst and Devil's Advocate rationally rebut
each others' reports. In the best-case scenario, this process will result in a
new proposal that eliminates the fallacious parts of both recommendations and
is comprised of the soundest elements of each. Failing this, however, the
decision-maker must decide which - if either - recommendation to accept. The
advantage is that now the shortcomings are known.
Conclusion:
Since
major decisions today are crucial to long-term success in a competitive and
volatile market place, the quality of these decisions must be optimized.
Creating an official "Nay-sayer", charged with the responsibility of
dissenting with recommendations, aids in pointing out logical flaws and other
fallacies or inaccuracies in major one-sided proposals.
An official dissenter can heighten the probability that
decisions will be thoroughly researched and proposed solutions based in
reality. The Corporate Devil's Advocate can also help ensure that marginal or
unwise decisions are not made at all.
Critique:
The
authors point out that the role of Devil's Advocate can be internal or
external. If it is internal, then the concept must be enthusiastically
understood and accepted to be workable. Acceptance by the chief executive and
other executives will permit the Devil's Advocate to undertake the role
freely, without fear of reprisal or recrimination. It would be important to
ensure that the Devil's Advocate always be at the same hierarchical level as the
analyst who initially wrote the proposal to avoid pressure or other
repercussions. Additionally, it would be wise for the Devil's Advocate to
report directly to the President of the firm. If the method is outsourced to an
external entity, like a consulting firm, then there could be difficulty in
recreating the processes through which the conclusions of the initial analyst
were derived. However, an independent analysis of the problem might yield
alternatives and new insights to assist the executive in their decision-making
process.
Source:
Herbert,
T. T., & Estes, R. W. (1977). Improving executive decisions by
formalizing dissent: The corporate devil's advocate. The Academy of
Management Review, 2, 662-667. Retrieved from http://www.jstor.org/stable/257518
Posts
Hank, great article! Thanks for sharing. I take particular interest in the "Process" section. When designing the exercise for your team to work through next week, I drew from the CIA's Structured Analytic Tradecraft manual (which was declassified in 2009) to build an exercise that mirrors the process you mentioned in the aforementioned section! Looking forward to watching you all work through the problem set!
ReplyDeleteThat's great, Tom! I thought it was an interesting article and really wanted to highlight the process section. Look forward to your exercise!
ReplyDeleteThis summary was very insightful and a great read. I liked how the article looked at Devil's Advocate from multiple standpoints, highlighting that it important to keep an analyst and their products in check. I liked how you presented the fact that not only is the Devil's Advocate a means for offering the counter-point, but they are also a second set of eyes that might see flaws that the original analyst did not notice.
ReplyDeleteThanks, Chad. It seems like a viable technique if used appropriately.
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