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Do ‘HiPPOs’ make the best decisions?

Pros and cons of relying too much on the highest paid person’s opinion

By Brian Kreissl

As many of you can probably tell, I’m fascinated with buzzwords and catchphrases.

While jargon and gobbledygook can be annoying, sometimes new ways of describing a concept or idea can provide a different perspective when looking at the issue at hand.

It seems like, in the business world, there’s a new term being coined every week. And we in HR often seem to be particularly guilty when it comes to this type of thing.

I sometimes don’t hear new terms until they’ve been in use within certain circles for several years or more. This week's term is no different in that respect, since that term, the acronym HiPPO — the highest paid person's opinion — isn’t entirely new.

To be fair, this isn’t even an HR term but something that usually relates to business analysis and research. HiPPO refers to the tendency for people to defer to the most senior-level decision maker in the room — especially when that person uses intuition and “gut feel” to make decisions rather than empirical research or other hard data.

Yet the concept also seems relevant to human resources, since HR professionals are frequently involved in developing, communicating and changing decision-making processes within their organizations. The dynamics of power and authority are also within the ambit of the HR function.

I think we’ve all been in situations where we automatically deferred to the HiPPO in the room. After all, that’s why they’re paid the “big bucks,” isn’t it? And it can be rather nerve-wracking — and sometimes downright career limiting — when someone publicly disagrees with the vice-president or CEO.

In defence of the HiPPO

Presumably, people rise to the top because they’re experienced and highly talented. They also usually have a pretty good handle on the business and have good reason to trust their gut instincts when making business decisions.

Sometimes there’s just no substitute for experience and contextual knowledge. For example, several pieces of market research we’ve conducted over the years at Carswell indicate legal compliance isn’t a huge draw for HR professionals.

Yet we know many of our best-selling titles relate somehow to legal compliance. So in some ways it would appear many HR practitioners say they’re looking for one thing when they really want something else.

I’m sure everyone has been in meetings where it’s like herding cats. People are all over the map and no one can come to a decision. That’s particularly the case when decisions are made by committee.

Sometimes in such a situation, it’s necessary for a senior leader to exercise her authority and just make a decision. Even if the decision ends up not being the best one, it’s still usually better than no decision at all, coupled with endless debates and “analysis paralysis.”

In other words, sometimes someone just has to be in charge and make a decision. We sometimes refer to this as “positional power.”

Problems with relying too much on the HiPPO

But some people appear to resent this tendency, believing that making decisions based on data and hard numbers trump those based on experience or opinion. There’s also a valid criticism that senior business leaders are usually fairly far removed from day to day interactions with customers and hands-on operation of the business. Often the people doing the actual work have a much better handle on the issues at hand than their superiors.

Of course, there’s always the danger of groupthink when deferring to the most senior person in a meeting or project team. Groupthink is when a highly cohesive team starts to think with “one voice” — to such an extent that dissenting opinions are hardly even considered.

This is especially problematic when everyone starts to think and act like the most senior decision maker. People become scared to speak up, and they believe agreeing with the executive will have a beneficial impact on their careers.

Another problem with the HiPPO approach relates to lack of employee empowerment and engagement. If decisions of any significance have to go all the way up the chain of command, it’s a tremendous waste of employee knowledge — especially where those closest to the issue at hand don’t get to share their perspective or participate in the decision making process.

So, in the end, HiPPOs have their place — but an executive’s gut feel and intuition shouldn’t be the only way to make decisions.

Brian Kreissl is the managing editor of Consult Carswell. He can be reached at brian.kreissl@thomsonreuters.com. For more information, visit www.consultcarswell.com.     

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Brian Kreissl

Brian Kreissl is the product development manager for Thomson Reuters Legal Canada's human resources, OH&S, payroll and records retention products and solutions.
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