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The art of decision-making, part 3: Red Teaming

This article is part of a three-part series written by Marko Kovic.


In part 1 of this series, we have come to terms with the inconvenient truth of human irrationality: Due to cognitive biases, we are all systematically irrational, and we are unaware of our irrationality (This means that our irrationality is an “Unknown Unknown”). That’s a huge problem, not least in start-ups.

In part 2, we have seen that we are not entirely helpless against our irrational tendencies: Indirect measures, such as nudging, and more direct measures, such as debiasing and rationality training, can help us get a grip on our irrationality. Unfortunately, doing something about our biases takes work, time, and dedication – resources that are in short supply in any organization, let alone in a start-up.

Fortunately, there is another way to deal with Unknown Unknowns that requires relatively little time and energy: Red Teaming. Red Teaming means systematically challenging decisions, processes, and strategies in order to uncover blind spots and weaknesses. That is an elegant and effective approach that requires no prior knowledge about how people think and make decisions.

The origins of Red Teaming

Red Teaming is not a new idea. It is an approach primarily used in non-civilian domains, such as the military or intelligence services. Even though it has existed for decades, the approach became more important at the turn of the century. The reason why is rather tragic: The catastrophic terror attacks of September 11, 2001.

To this day, the 9/11 attack remains the single most deadly terror attack in history; almost 3’000 people were killed. Soon after the attacks, however, it became apparent that the attacks were not a failure of intelligence gathering – all the necessary data and information to prevent the attacks had been available. However, there was a large-scale failure to process, analyze, and communicate the intelligence in a rational manner.

The 9/11 attacks were followed by the invasion of Iraq in 2003 by the US and its allied forces. Again, soon after the invasion, it became obvious that the decision to invade was a catastrophic failure – the death toll of the invasion was in the hundreds of thousands, and there were no weapons of mass destruction in Iraq. Even more than that: The invasion of Iraq directly led to the formation of ISIS, the barbaric terrorist group that caused incredible suffering and death for over a decade.

In order to avoid such disastrous decisions in the future, military forces and intelligence services in the US as well as in other countries began implementing Red Teams more systematically. The goal of doing so was clear: When important decisions are being made, it is crucial to detect and mitigate blind spots that are caused, among other things, by cognitive biases.

Red Teaming can be thought of as a kind of insurance policy. When we are making a decision or crafting a strategy or engaging in some other similar decision-making, we don’t know whether we are falling prey to Unknown Unknowns – so it’s better to challenge what we are doing, just to make sure.

How it works

Red Teaming consists of two main factors. First, and most importantly, it is an attitude. A team or organization will never be able to successfully employ Red Teaming if it lacks a culture of critically challenging itself. Most organizations, be they a small start-up or a big corporation, lack such a culture. That’s natural: Nobody likes to be challenged, and nobody likes to be wrong. We all know how office politics works, and we all know that appearances and ego tend to matter more than the quality of decisions. In addition, on an emotional level, critically challenging your work can be painful – when we put a lot of blood, sweat, and tears into something, we want to not have it picked apart and criticized. But all of these factors are *precisely* why Red Teaming is so useful: The initial resistance we feel towards being challenged is itself a combination of cognitive biases such as status quo bias, confirmation bias, and the sunk cost fallacy. 

Second, Red Teaming is also a toolset. In principle, all aspects of an organization can be subjected to Red Teaming exercises. In practice, however, an organization should apply it to issues and areas that are most crucial to its future success. Those will usually be more foundational, strategic questions rather than small details (If you are buying a new plant for your office, Red Teaming that decision might not be overly useful.).

There are plenty of Red Teaming tools that can be used, depending on the specific problem at hand. For example, so-called pre-mortems are a great Red Teaming exercise in project management. A pre-mortem is similar to a post-mortem: You are interested in why a project partially or completely fails. However, the pre-mortem is performed before the project starts in order to pierce through the usual layer of overconfidence and optimism bias that project teams tend to have at the beginning of projects.

Another effective Red Teaming tool is the so-called Kill your Business method. Kill your Business is a compact workshop in which members of an organization develop a fictional competitor that is much better than their own organization. This exercise is creative and enjoyable, and it delivers very important insights: All of the reasons why the fictional competitor crushes you represent the weaknesses and blind spots of your own organization. The Kill your Business method can inform both the overarching strategy of an organization as well as point out specific important, yet overlooked problems.

Is Red Teaming for you?

Should you apply Red Teaming in your own organization? The answer is almost certainly yes. Red Teaming can be a bitter pill to swallow, but it is a medicine that can help you detect problems you couldn’t even think existed.

And what kind of Red Team should you use in your Red Teaming endeavors? Red Teams should be as independent as possible, so the ideal solution is to go with an external Red Team that has no proverbial skin in the game.

It is also possible to conduct Red Teaming exercises in-house. But bear in mind that your in-house Red Teaming exercise might be affected by factors like hierarchy or self-interest. In larger companies, for example, in-house Red Teaming can be difficult because nobody dares say things that the boss might not like to hear – even though that is *precisely* what Red Teaming is all about.