No consensus for consensus
The adage that "two heads are better than one" is on the right track. In fact, research shows that consensus decisions reached by five or more people are most often qualitatively superior to individual, majority and leader decisions. Consensus decision making works - when properly used - because it:
Articulates the common will. Consensus is reached when all participants are willing to move forward together, even if they do not agree on all the details.
Works from a broader perspective. The consensus decision making group, as opposed to an individual decision-maker, has the great advantage of the experience, insights and knowledge of the many participants.
Considers more options. When the group is involved, more information and considerations are processed. The group consensus decision-making process, properly led, enables sharing of expertise, creation of novel approaches and avoidance of costly mistakes. A higher quality decision typically emerges.
Involves those affected. Consensus decisions with broad support are more likely to be implemented. In a study of 163 business decisions, only half of the decisions were ultimately successful. The best way organizations found to reduce their failure rate was to involve those affected by the decision in the decision process.
GOOD NEWS: TWO-THIRDS SAY THEY USE CONSENSUS
Of the 305 leaders that Forrest Consulting polled in its just-released 2016 Strategic Leader Survey, two-thirds said that consensus decision making is among the various decision-making models and systems they use.
Notably:
Organizations whose leaders rate as being "more successful" than others of their type are more likely to use consensus decision making. Half of the organizations rated "less successful" commonly use consensus, while two-thirds of those rated "more successful" use it.
Consensus decision making is used by the same ratio of smaller and larger organizations (just under 60%).
Non-profit organizations are more likely than for-profit organization to use consensus decision making (67% versus 55%).
REALITY: THE LEADER MOST OFTEN DECIDES
However, having consensus decision making in the organization's arsenal does not necessary mean that it is regularly used to make the big decisions affecting the organization's future.
In fact, as the pie chart shows, organizations typically make strategic decisions without the leader obtaining consensus: In two-thirds of organizations the leader typically decides. The 2016 Strategic Leader Survey report shows that in more than half of organizations the leader typically consults with individuals or groups and then makes the strategic decision. The leader typically obtains consensus for strategic decisions in only 29% of organizations.
Looking deeper, the 2016 Strategic Leader Survey results show that:
Leaders of more successful organizations are somewhat more likely to use consensus, but, still, only a third of these organizations typically make strategic decision by obtaining consensus. The leader decides without consultation in a higher share of less successful organizations.
The leader typically obtains consensus to make strategic decisions in an even a smaller share of large organizations: The leader obtains consensus in less than a quarter of larger organizations, versus in a third of smaller organizations.
Non-profit organizations show the greatest likelihood to make strategic decisions through the leader obtaining consensus. In half of non-profits, strategic decisions are typically made through the leader obtaining consensus. In contrast, in just over 20% of for-profit organizations are strategic decisions made through the leader obtaining consensus. In nearly two-thirds of for-profits, the leader typically consults with others and then makes the decision. This is true for only a slightly over a third of non-profits.
ONE OF MANY "BEST PRACTICES" THAT ARE IGNORED
Consensus decision making is but one of many proven decision-making practices that are often ignored by organizations when they make the all-important strategic decisions. Download the 2016 Strategic Leader Survey to learn about:
"Best practices" for developing and evaluating strategic options and assessing opportunities and threats
Leader and group traps and biases that cause organizations to make bad decisions - and how to avoid them.
Decision-making processes and models often used to make strategic decisions - and why most are weak.
How most organizations are needlessly exposed to strategic risk.
How to improve strategic decisions and future decision making.
References
“Leadership in Groups: A Monetary Policy Experiment.” Alan S. Blinder, John Morgan. NBER Working Paper No. 13391, September 2007 http://faculty.haas.berkeley.edu/rjmorgan/Leadership%20in%20Groups.pdf
“Groups Make Better Self-Interested Decisions.” Gary Charness, Matthias Sutter. Journal of Economic Perspectives, Volume 26, Number 3, Summer 2012, Pages 157–176. http://econ.ucsb.edu/~charness/papers/groups.pdf
“Decision Making in Groups.” Saylor Academy. 2012. https://saylordotorg.github.io/text_human-relations/s12-03-decision-making-in-groups.html
“Why groups perform better than individuals at quantitative judgment tasks: Group-to-individual transfer as an alternative to differential weighting.” Thomas Schultzea, Andreas Mojzischb, Stefan Schulz-Hardta. May 2012. Organizational Behavior and Human Decision Processes, Volume 118, Issue 1, Pages 24–36. http://www.sciencedirect.com/science/article/pii/S0749597812000027
“Groups perform better than the best individuals on Letters-to-Numbers problems.” Patrick R. Laughlin, Bryan L. Bonner, Andrew G. Miner. July 2002. Organizational Behavior and Human Decision Processes, Volume 88, Issue 2, Pages 605–620. http://www.sciencedirect.com/science/article/pii/S0749597802000031
“The tragedy of the commons revisited: The importance of group decision-making.” Joris Gilleta, Arthur Schramb, Joep Sonnemans. June 2009. Journal of Public Economics, Volume 93, Issues 5–6, June 2009, Pages 785–797. http://www.sciencedirect.com/science/article/pii/S004727270900005X
“Group vs. Individual Performance in a Price-Searching Experiment.” Douglas D. Davis, David W. Harless. May 1996. Organizational Behavior and Human Decision Processes, Volume 66, Issue 2, Pages 215-227. http://www.sciencedirect.com/science/article/pii/S0749597896900503
“Decision accuracy in complex environments is often maximized by small group sizes.” Albert B. Kao, Iain D. Couzin. 2014. Proceedings of the Royal Society B. April 23, 2014. https://blogs.princeton.edu/research/2014/04/23/too-many-chefs-smaller-groups-exhibit-more-accurate-decision-making-proceedings-of-the-royal-society-b/
“Decision Making.” Chapter 11 of Management Principles (v. 1.0). http://2012books.lardbucket.org/books/management-principles-v1.0/s15-decision-making.html
“Consensus decision-making.” Wikipedia. https://en.wikipedia.org/wiki/Consensus_decision-making
“The Basics of Consensus Decision-Making.” Tim Hartnett. Consensus Decision Making. http://consensusdecisionmaking.org/Articles/Basics%20of%20Consensus%20Decision%20Making.html
“Consensus Building.” Heidi Burgess, Brad Spangler. September 2003. Beyond Intractability. http://www.beyondintractability.org/essay/consensus-building
“The Consensus Building Approach.” Lawrence Susskind. October 2012. Agorà: Idee per la Mobilità del Futuro. http://www.cbuilding.org/publication/article/2013/consensus-building-approach
