24 / Rotman Management Spring 20 19
of these arguments had been pre-programmed. Each learned on
the first ballot that two others agreed with her, favouring a po-
sition of low compensation. What differed was whether a third
individual, person B, agreed with her as well (the ‘no dissent’
condition) or took a different position of high compensation
(being a dissenter). That dissent, however, was either authentic
— that is, it was the true opinion of person B — or the result of
person B being asked by the experimenter to play devil’s advo-
cate. The arguments were identical.
In general, the individuals who faced authentic dissent had
the most internal thoughts, and they themselves were generating
the thoughts, rather than paraphrasing others or the case infor-
mation. In short, they were really thinking. More important was
the direction of their thoughts: Those facing authentic dissent
showed a balance in considering both sides of the issue; while
those facing a devil’s advocate did not. Rather than stimulating
thought on both sides of the issue, the devil’s advocate actually
stimulated more thoughts in the participants that defended their
original position. It was not the kind of thinking that proponents
of the devil’s advocate technique would have desired.
My colleagues and I have since identified the key problem
inherent in the devil’s advocate technique: Role-playing does not
show the courage and conviction of authentic dissent. When a
person is role-playing, you don’t really know the relationship be-
tween what they are saying and what they actually believe. Even
if their words are consistent with their beliefs, you are very aware
that they are acting. And since you are aware that they are play-
ing a role, you are likely to think and interact with them differ-
ently. After all, you can’t persuade someone who is role-playing
to change their position.
It is only when you face a dissenter who truly believes their
position, has the courage to say so, and does so persistently that
you confront the possibility that you may be wrong. At the very
least, you will start to investigate the complexity of the informa-
tion and the issue; seek information and consider alternatives,
much as you do when first forming an opinion; look at all sides;
and consider the cons as well as the pros. Put simply, you will be
really thinking.
Exhibit A: Finchwood Capital
Some firms have already embraced the concept of authentic dis-
sent by creating processes that build dissent into their various
stages of decision-making. Finchwood Capital, a hedge fund, is
one such organization. I had the occasion to interview its founder
Ankur Luthra, who has thought very carefully about the firm’s
decision-making processes and is especially attuned to the im-
portance of combating bias.
On a regular basis, Finchwood has a ‘theme day’ when it
focuses on an entire sector — for example, ‘Internet security’ —
and considers which companies will be the likely winners and
losers in that sector. After researching the investment space as
well as specific stocks, a lead proponent writes a one-off paper
about the investments considered promising.
The interesting part is that the proponent also formally ad-
dresses the downsides of their position, outlining the risks in a
section known as the ‘Pre Mortem’. This section addresses how
the firm could lose money on the investment. This is just the first
step, however, in considering the downsides: Next steps include
defending the proposal with colleagues who have read the paper.
This ‘deeper diligence’ stage involves two key items: an invest-
ment memo and a contra memo. The contra memo is a much
deeper examination of the risks associated with the investment,
written from the perspective of someone who opposes the invest-
ment. For example, if Finchwood wants to buy stock XYZ (a long
position), this memo argues for ‘shorting’ that stock.
This is more than an intellectual exercise: It is a mechanism
for getting as close as possible to authentic dissent. In this case,
the proponent is also the dissenter, and they are expected to
write a thoughtful and persuasive paper arguing the contra posi-
tion. Not just a couple of paragraphs after a half-hour of thought,
or five bullet points on how the firm could lose money on the in-
vestment — but an eight- to nine-page position paper that others
will read and to which they will have to respond.
Finchwood’s process is of special interest here because it
gives some evidence that confrontation with dissent leads to
divergent thinking. In one example recounted by Luthra, the firm
was considering an investment in a software company — let’s callDaring to dissent takes courage. But once summoned,
this courage is contagious.