A Trip to Abilene
“This story is about a family in Coleman, Texas. On a hot afternoon, the father-in-law, suggested that the family goes for a dinner at a place called Abilene. The proposal was mild and the family wasn’t very enthusiastic about it. Still they agreed to it and all of them went to Abilene. However, the entire idea proved to be a big disaster, right from the car ride to Abilene, which was 53 miles away, to the food and service in the restaurant. The family while returning back didn’t discuss it on the way. The arguments and accusations began after they reached home when each started blaming the other for the idea. Finally it came down to the father-in-law because originally it was his idea. At this point, he steered himself clean by saying that even he wasn’t too interested and had only made a suggestion to which everyone agreed.”
I came across this story in Subroto Bagchi’s book ‘The Professional‘. He used a term called ‘Abilene Paradox’ which refers to a situation where everyone in a group agrees to something which is counter to their own individual opinion. As a result of this, when things go wrong, no one is ready to take the responsibility and claims that he/she had simply followed the group’s opinion.
Subroto stresses on the importance of professionals assuming the responsibility of dissent when working in groups/teams. By responsibility of dissent, he means that a professional should be willing to voice his concerns and if required disapprovals also during the group’s decision making process. The goal of a group’s discussion should be to decide on the right things to do rather than achieve a consensus among the members. Otherwise, like in the story, when the group’s decision turns out to be not-so-correct, no one knows who is the responsible and a chaos reigns.
To illustrate this idea, Subroto uses the case of the financial fiasco of Satyam Computers. In December 2008, Satyam Computers had declared that it would purchase two companies for $1.6 billion. These companies were owned by the sons of Ramalinga Raju, the chairman of Satyam. The acquisition didn’t make much sense as the two companies were into real estate and Satyam was an IT company. Besides this, those companies were largely owned by the families of Ramalinga Raju and were valued at unreasonably high price for the purpose of acquisition. The surprising fact here was that the board of directors of Satyam agreed to such an acquisition and no one raised any concerns. The board consisted of eminent people like Dr. Mendu Rammohan Roa (dean and director of IIM Bangalore), Dr. Krishna Palepu (professor at Havard), Mangalam Srinivasan (adviser to JFK School of Governance at Havard), Vinod Dham (father of Pentium), V.S. Raju (ex-dean of IIT Delhi) and T.R. Prasad (an ex-cabinet secretary).
It is quite apparent that the members of the board, who were all accomplished individuals and who may not have not agreed to the deal if they decided individually, failed to exercise their responsibility of dissent when taking the decision as a group. The consequences of this was tremendous and widespread which not only left a black spot on the image of Indian software industry but also effected the thousands of shareholders, employees and families associated with Satyam.
“In approving the $1.6 billion deal, the Satyam board was on a trip to Albene”.
Disclaimer: The facts in this blog are based on the contents of the book ‘The Professional’.