The Herd Mentality Can Cost You Your Job

The two outstanding examples of corporate herd mentality are the headlong charges of AMP and NAB overseas to make their fortunes. That resulted in $bn2.6 and $bn3.6 write-downs respectively.

Is it a coincidence that these overseas investments ended in disaster? I think not. At the same time we had Westfield and other corporate giants, including the NAB, take a beating in the US. "Just global downturns" I hear you say.

The cause of each of these write offs is complex, but here are a set of common corporate behaviours that may provide an insight into the fate of AMP & NAB.

	Use of similar corporate advisors for whom overseas expansion was the next source of exorbitant fees
	Common corporate planning process leading to similar conclusions
	Organisational cultures disapproving of questioning conventional wisdom

It is the last factor, which is most deadly. If people feel inhibited to question what the Executive or Board hold as sacred truths for fear of their corporate careers, we have a severe case of "groupthink".

Strategies to break up this culture of "groupthink" are easier said than done. Many a consultant's and courageous staff's bleached bones lie scattered in the halls of power having attempted this feat. One tool that has been useful for several of our clients to confront "groupthink" is 360-degree feedback. In an anonymous survey of managers, peers, direct reports and customers, it is amazing how quickly staff identify whether a manager or a management team is a culprit of "groupthink". Having identified this disease, it is possible to start to set up cultural norms to avoid this all too common human tendency.

By using our on-line 360 degree survey as an ice breaker to deliver the 'herd' message, hopefully we will spare the life of the messenger.

What Next?

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