Beware Group Thinking

Thursday, April 1, 2010 - 09:00

Does positive organisational culture hinge on recruiting like-minded people, or is this the worst mistake a company can make? Chris Sheedy seeks answers to the perfect balance.

Sportswear giant Nike makes a fascinating case study in the analysis of the pros and cons of the employment of like-minded people.

The company's obsession with creating better sports shoes for athletes helped the business grow from one that was selling shoes out of a car boot in 1964 to the multinational giant we know today. But, according to Peter Wilson, National President and Chairman of the Australian Human Resource Institute, it wasn't until the company employed its first female director in the early 1980s that things really took off.

"This director said she thought the company should develop a leisure shoe for women," Wilson explains. "Having a bunch of blokes developing athletic shoes for elite athletes was successful to a point, but it was diversity, a different way of looking at the market, that was valuable to Nike.

"They established market leadership in that sector by redefining what they were. You don't get that growth if everybody is thinking the same way."

Less able to change
Much has been said about the value of employing like-minded people, such as hiring for attitude and to preserve team culture. But, in doing so, an organisation loses viewpoints, nuances and devil's advocates, and, therefore, is less able to change, expand, think creatively, innovate and cope with turbulent times.

Wilson says to look at lessons from the recent global financial crisis. At its root was a finance industry culture that was resistant to change and blind to its own folly, in large part thanks to the fact that it attracted a specific type of person.

"Look at the GFC and you'll see a lot of the seeds of decline were planted from failures of ethical leadership and poor judgement.

"This led to extraordinary credit expansion and critically flawed financial instruments being sold and packaged and re-sold. People within the system didn't have strong sets of values to contest that. That specific group of people were always a risk because of their lack of diversity," Wilson explains.

Power in diversity
Amanda Earle, Manager of People Stuff at consulting firm The Nous Group, agrees that hiring a diverse range of people is a powerful way to do business. Her company actively looks for diversity when hiring. However, there are a few common traits they like their people to share.

"We look for people who have a diversity of experience and capabilities but who share a commonality of intent, so they're aligned to our reasons for being," Earle says. "It's fine to have enormous diversity of background and experience and age and so on, as long as people are aligned in terms of why they're working in the business. That can generate a very strong, cohesive culture.

"The alignments include supporting transparency in the business. In The Nous Group everyone understands the finances of the business, so we share the risks and we share the rewards and we know what's going on, so there are no surprises. We understand the strategic direction of the organisation so we know where we're heading and there's clarity around that. And there are high levels of trust, which is very important."

Shared values
Trust and shared values are also key for Bruce Mann, CEO of subscription TV business XYZ Networks. "I disagree with the argument that you should hire like-minded people," he says. "What I like are people who have a blend of skill sets. I'm also very rigorous in trying to have a gender-balanced organisation."

"But I do think it's important to have people with some shared values. I want the kind of person who has integrity, who ultimately will stand back and understand it's about the team. Agitation will always happen over an issue and that should be constructive, but at the end everybody's got to walk out arm-in-arm. That's really about values that an organisation is built on and that's what I try to find."

In order to ensure diversity within an organisation as well as shared team values, Peter Wilson says it's a good idea to utilise various personality tools that are on offer when hiring. Psychometric and other tests, including thorough discussions with referees, will tell a great deal about a person's values and ethics.

The other important option is to work on the people already within the organisation by setting up regular training days and bonding sessions, encouraging people to work with each other outside of the office environment.

"Each individual should be encouraged to be confident about taking risks and working with others in the organisation," Wilson says.

"Once people are working together and are prepared to tolerate and listen to and invite different perspectives and work them through, that's when you have diversity. That means you have strength, resilience and innovation."

Keys to a strong culture
Our experts, Peter Wilson, National President and Chairman of the Australian Human Resource Institute, Bruce Mann, CEO of XYZ Networks and Amanda Earle, Manager of People Stuff at The Nous Group, share their thoughts on what creates great corporate culture.

  • a common set of core values that are never compromised
  • transparency and trust within a business
  • clear communication of business goals and of the building blocks that will make those goals a reality
  • shared reward as a result of cohesiveness and team spirit
  • a clear understanding of the roles of others, and how those roles relate to the final goal
  • shared projects between departments, rather than silos
  • after technical knowledge and experience is proven, the use of whatever resources are available to test a person's values before a hire
  • relentless management or removal of people who do not share the group values.