Common Sense

Bill Simmons, the Sports Guy columnist at ESPN.com, has used the recurring trope of the Vice President of Common Sense which he describes in this column where he derides the choice of Mario Williams over Reggie Bush in the NFL draft:

I’m becoming more and more convinced that every professional sports team needs to hire a Vice President of Common Sense, someone who cracks the inner circle of the decision-making process along with the GM, assistant GM, head scout, head coach, owner and whomever else. One catch: the VP of CS doesn’t attend meetings, scout prospects, watch any film or listen to any inside information or opinions; he lives the life of a common fan. They just bring him in when they’re ready to make a big decision, lay everything out and wait for his unbiased reaction.

I’m beginning to think that all corporations need a VP of Common Sense. Another recent example from the world of sports was the New York Knicks and Isiah Thomas inexplicably not settling with Anucha Browne Sanders in a sexual harassment case. The case went to trial, which Simmons describes with glee. No matter how much the settlement would have cost, I think it would have cost less than having the organization’s reputation severely tarnished by the antics described in the trial.

We discussed the Andersen/Enron case in class last week, which had a similar feeling. As an audit firm, Andersen was completely dependent on the goodwill and trust of its clients. When faced with the Enron situation, the partners of Andersen refused to admit guilt in a settlement, instead choosing to fight the case in court. As we know now, Andersen went out of business within months of that decision. A VP of Common Sense might have told them “Those Enron partners are going down, no matter what. The only thing you can do is admit guilt to the public, say you screwed up, and do everything possible to assist the investigation and improve yourselves in the process.”

These examples illustrate the perils of groupthink, where one becomes so indoctrinated into the culture and perspective of an organization that one loses the ability to see how actions will be perceived by others. Microsoft is another example of an organization that has shown a stunning lack of sensitivity to what its customers or competitors or regulators might think of it. Microsoft is well known for having a “Microserfs” culture that encourages its employees to spend all of their time at Microsoft with their coworkers, so there are no opportunities for outside perspectives to be introduced. Ironically, Netscape had a similar problem, where they proclaimed their own superiority without realizing that they could quickly be overtaken by Microsoft.

Smaller organizations are less prone to this issue, as they have too many interactions with the outside world, from dealing with customers and consultants to talking to friends and family, to be able to make decisions without some sense of how they will be perceived. But startups can wrap themselves up in their work so enthusiastically that they lose track of reality too, as the dot-com boom and bust illustrated. One lesson from the dot-com era is that if you can’t explain your business model to your mom, it’s probably because you don’t have a business model, not that your mom doesn’t “get it”.

The need for a VP of Common Sense is present in all aspects of business. The elevator pitch is a fine example – if you can’t boil your business idea into something that can be explained in two minutes without jargon to an outsider (aka a VP of Common Sense), your idea needs work.

The Common Sense role is meant to be filled by the board of directors, which assembles a few times a year to review the key decisions being made by the company. They are not part of the everyday culture, so they bring an outsider’s perspective and can ask the questions that are not being asked internally. Unfortunately, the board is often dominated by the CEO who is part of the groupthink, which perpetuates the problem. This lack of board independence is starting to change after corporate scandals such as Enron, but it’s still an issue.

Groupthink is a threat for any organization, especially ones that have a strong culture and barriers to entry. Once you have spent the time to assimilate the culture, learn the jargon and survive the initiation rites, you are invested in the organization and will think like your organization in the future. You will be likely to deride outsiders as not getting it, as they have not been chosen as you have. You can discount their objections as being sour grapes, as them not being as brilliant or well-informed as you are. Observe the behavior of academics in a specialized field or tenured professors mocking new theories, and it’s clear that groupthink can happen in all organizations, not just companies.

If you are in an organization, consider consulting people outside the organization when making major decisions. Explain the basic idea to a friend or a relative and treat them as your VP of Common Sense – if they say “Um, wait, that doesn’t make any sense”, you probably have a problem.

One thought on “Common Sense

  1. Of course, the flip side is that sometimes, outsiders really do have almost no chance of understanding what they’re talking about, because the high barrier to entry reflects the difficulty of understanding the important ideas. I think the tenured professor mocking the new idea isn’t as pathological as it may appear, because if you take into consideration all the cranks and whatnot, 99% of the time the “radical new theories” are just nonsense. It’s only in hindsight that a revolutionary idea seems obvious.

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