Beware The Borg

Once upon a time there was a group of like-minded people who worked for a major bank. They worked well together, went out for lunch together often, and even their mannerisms were alike. Other groups remarked on their cohesiveness, referring to them (in their less-kind moments) as The Borg, in reference to a group of Cyborgs on Star Trek who, basically, shared a brain.

For a long time, theirs was the group of choice. They had more deal flow, they got bigger bonuses, and they seemed to have so much darned fun. Even the most misanthropic among us looked upon The Borg with a degree of envy, as they seemed to lack the competition and infighting that plagued the other groups.

The last time I’d been struck by such cohesive gang was when I was interviewing with the consumer packaged goods companies right out of school. At one such company, I was taken out for lunch by a happy bunch who spent the hour telling me how they loved working together so much that they also chose to be friends outside of work. They ate lunch together, played ultimate frisbee, and a number of them had even decided to get married. If one of the senior category managers had not waxed on at length about his personal dream of seeing the entire population in diapers, I might have signed on.

Back at The Borg, trouble was brewing, however. While all of that togetherness made for a tight-knit and happy group, it was also contributing to some fairly significant groupthink.  Groupthink is more likely to occur among groups of people who — no surprise here — think the same way. When there is little diversity of thought, there tends to be little conflict, and people tend to get along really, really well. It makes for a lovely place to work until the wheels fall off. In the case of the Borg, the wheels fell off in a fairly significant way. The group was involved in asset securitization and packaging up, among other things, CDOs. The Borg had morphed into The Big Short.

Now we are not blaming that one little group for the entire financial market collapse of 2008, but a closed culture can often result in blind spots. It is interesting that whenever there is a highly dysfunctional entity, people often remark on how strong the corporate culture was (think of Tyco’s culture of pushing the envelope or the investment banking culture of attempting to offload risk.) Yes-men are rewarded, naysayers are not tolerated, and the very thing that can make companies strong — clear goals and an aligned workforce — can also derail them. Dissent and conflict are not comfortable, but they are necessary for organizations that want to think through issues critically. It’s good to have a few foxes around to point out when the emperor has no clothes.

I’m not suggesting that we fill our companies with iconoclasts — a clear, cohesive culture is an effective way of getting things done — but I am suggesting that whenever we see evidence of The Borg forming, it makes sense to add in some new blood, to recruit a different type of candidate, or to shuffle the  deck chairs a bit.

{ 1 comment }

Rob tyrie March 8, 2011 at 8:25 am

Arg… Shades of Enron. Sobering post. Cheers to those who can think differently.

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