Taoiseach Brian Cowen’s defiance in the face of robust critique by experts of his and Finance Minister Lenihan’s bad bank plan is worrying in the extreme.
Labour’s Joan Bruton has spoken of a “Cowen-Lenihan parliamentary dictatorship that is allowed to rule by decree without scrutiny or amendment”. Politics aside, their behaviour suggests a dangerous psychological phenomenon called groupthink.
Sticking to the plan in the face of disconfirming information is not a hallmark of good leadership. It is a hallmark of groupthink, sometimes called bunker mentality. It occurs when small groups of people become blind to external influence and is an understood facet of poor governmental policy and decision making systems. Disastrous policy decisions have resulted. Examples include the US escalation of the Vietnam War, Watergate, the invasion of Iraq and more recently the global credit crisis.
On the opening day of the Battle of the Somme on 1st July 1916, the Ulster 36th Division was close to breaking through German lines. Spotting the opportunity General Perceval wanted to commit his 49th Division to support the Ulster men and exploit the gains made. But his superior General Morland, who could see the opportunity from his observation post high in a tree, refused as it wasn’t part of the plan. The Ulster men were decimated as the Germans counterattacked due, it is said, to Morland’s inflexibility.
Similarly inflexible Taoiseach Cowen’s insistence in sticking to the NAMA plan ignores the possibility of better alternatives.
Like General Morland both he and Minister Linehan are insisting on sticking to the plan. Yet at least two formidable alternatives have been proposed having substantive support from a wide body of experts. They are Richard Bruton’s Fine Gael good bank/bad bank option and Professor Anthony Honahan’s hybrid called NAMA “2”.
At the heart of Government’s decision making processes may lie a psychological phenomena well understood and guarded against by effective leaders. Called groupthink, it seeks to explain the dangers of small cohesive groups. It seems such groups can have a psychological drive for consensus at any cost that suppresses disagreement and prevents the appraisal of alternatives.
During an Oireachtas committee session enquiring into the causes of Ireland’s banking crisis, a senior Department for Finance Official, when asked to divulge the advice provided to the Minister for Finance, declined as convention was not to divulge such information. He did say the advice reflected the consensus at the time. The Irish consensus and its powerful evocative metaphor of a “soft landing” is an example of groupthink at work.
Bertie Ahern once wondered why sceptics of the soft landing consensus –whom he called moaning minnies- didn’t commit suicide. The sceptic’s warnings were ignored by the small groups who set policy and made decisions in Ireland’s banks, it’s financial regulator, central bank and government.
Such is the small internecine village of Irish business, banking and politics that few if any are ever willing to swim against the tide. It is unlikely that any of the people involved realised the dangers of groupthink and acted to guard against them. Their cosy consensus cross contaminated all groups and none acted to prevent what was a predictable and inevitable outcome of a credit fuelled, construction led boom in consumption.
Economist, Colm McCarthy has rightfully called for an enquiry into what went wrong in Irish banking. There are many answers to what went wrong during the latter stages of the Celtic Tiger. If groupthink with its drive for consensus at any cost is one explanation then the danger is this behaviour is embedded in the way government continues to be led, for most of the same actors remain on stage.
One of the critical aspects of groupthink is poor decisions made under pressure invariably result in poor outcomes. Crisis decision making by one such small group last September when Government pledged the wealth of the state in support of the banks may have been groupthink behaviour.
Having hoisted their petard called NAMA, Taoiseach Brian Cowen and Minister Brian Linehan should be mindful of another leadership lesson from the past. When faced with critical decisions during the Cuban Missile crisis US President Kennedy ensured that his decision group was not exposed to the risk of group think.
The hallmark of great leaders is their capacity to guard against the dangers of groupthink through including for diverse views, testing assumptions and enquiring into alternatives when reaching decisions. Defiance, obduracy and unwillingness to accommodate alternatives to NAMA is worrying as it suggests that the phenomenon of groupthink is a feature of Irish governmental decision making.
Note:
Groupthink occurs when a group makes faulty decisions because group pressures lead to a deterioration of “mental efficiency, reality testing and moral judgement”. Its symptoms include amongst others; Illusions of invulnerability - creating excessive optimism that encourages taking extreme risks; Collective rationalisation - where people discount warnings and do not consider assumptions; Belief in inherent morality – groups believing in the righteousness of their cause, ignore the ethical or moral consequences of their decisions; Pressure on dissenters - where people are under pressure not to express arguments against any of the group’s views ;Self-censorship - where doubts and deviations from the perceived consensus are not expressed. Self-appointed “mindguards” - where other people protect the group and the leader from information that is problematic or contradictory to their cohesiveness, views and decisions.
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