Monday, June 07, 2004

Smarter than the CEO

An article in this month's Wired magazine correctly points out that teams often make better decisions than individuals. The article starts by criticizing the superstar CEO culture and command-and-control management structures, then quickly gets into the idea that no single person can consistently make great decisions alone. A (well functioning) team can outperform any individual by using all the talent, knowledge, and experience in the group to make better, more informed decisions.

But I'm not sure I agree with the article's claim that "internal decision markets" are a promising way to optimize decision making. Rather, I'd argue that the key is team culture and structure. In particular, ideas should be openly discussed, debated, and challenged. Responsibility and authority should be pushed down, decentralized, and widely distributed. The people closest to the problem should be allowed to make informed decisions while drawing on the advice, experience, and creativity of the rest of the team. Business metrics on team performance should be open and shared, so everyone can easily understand the impact of their actions. Mistakes should be acknowledged and well understood, not to assign blame, but to learn and improve. And rewards should emphasize team performance over individual performance.


Unknown said...

I read this article too, Greg and I am unconvinced.

It is perhaps too cliche to say that such environments often reduce to the common denominator - but there must remain the force of leadership.

Leadership and innovation often demand that an individual is enabled. After 10 years in Silicon Valley I lament that such leadership is too rare and often thwarted by these "internal decision markets."


Greg Linden said...

Good leadership is too rare, I agree. Poor leadership or management will often produce a poorly functioning team, and, yes, a disfunctional team will not perform well.