I too own Phillip Balls book and am halfway through it-- It is great. I want to talk about consensus, so I will tell ONE of the many stories I have of it:
How consensus destroyed a subsidiary and impoverished 400 people
I must say that when people sing the praises of consensus to me, they are talking to the wrong person. After a discontinuous 8 year stint as Geophysical Manager for the Gulf of Mexico,(discontinuous because I made a VP mad and he demoted me for 1.5 years before I came back to the job) I was sent to Scotland for 3 years to be the Mgr of Subsurface technology/geophysical mgr for the North Sea. They sent me cause I was a no -nonsense guy when it came to data and bad things had happened at Gryphon field the bosses didn’t want to have happen again. And they lectured me about it.
When I arrived, the place was very busy developing Leadon field an 8 mile long 3 mile wide structure (big underground hill) in Quad 9 of the North Sea. The consensus was that the sands held 120-170 million bbl of oil. They were busy ordering steel, drilling wells on the field, and building a billion dollar floating production facility. And the company was releasing press release after press release about this field.
So here I was two weeks after my arrival in a strange country, sitting in my office, knowing very little about North Sea geology when 2 men and a woman entered my office asking to show me some stuff on Leadon. They laid out their case that the sands were not horizontally layered as is quite normal everywhere in the world, but were, in fact, injectites, to describe the geometry as near as I can, they were saying the sands were in the shape of trees, with branches of sand at the top and all. That if you hold your forearm upright and spread your fingers, that is something like what they were saying Leadon sands were.
55 million years ago, the Balder sand was a massive sand that was laid down prior to North America splitting from Europe. As the continents separated there were loads of volcanoes with ash falls and the Frigg shale, made of 10’s of thousands of ash falls, covered the Balder sand, trapping the water the Balder contained so it could not escape and the sand compact as is normal. So, when the water became overpressured due to its inability to escape through the Frigg shale, and when an earthquake happened, the sand was erupted up into the Frigg shale in the shape of trees that were not connected to each other. This is important because the 120-170 million bbl estimate for reserves was based on the idea that the sand was one connected sand across the structure.
These three geoscientists told me to take their message to management that Leadon didn’t have the oil they thought it did. You can imagine my response–What the heck? So I told them to give me their data and let me look at it and after 3 weeks of studying quickly on their data and North Sea geology I had an epiphany–we are going to have a train wreck.
I told my boss–he threw me out of his office telling me to go sit in my office and think about why we weren’t going to say anything. So, frontal approach won’t work, I did 3 things, I processed the seismic data in 42 different ways looking to find a way to detect how much sand we had. But our seismic wasn’t good enough. So for a year I lobbied everyone above my level to acquire new seismic data, high frequency seismic data so we could detect sands. Except the country manager kept himself isolated from guys at my level, I never could get to him. No one listened to me. They politely smiled and said, “we are going to do ok” And I kept records of what I did, which came in handy when the witch hunt took place and I was deemed not to be a witch.
2 years later, when the field came on line and some wells started producing water within a month of opening the field, I was at a party for management and walked by the country manager and another fellow discussing Leadon. I took my opportunity and outlined why we were having problems and that we needed new seismic data. His response was "Why in the H havent I heard this before?" I was flabbergasted. I had told every director in the company what we needed and NONE of them including my boss had mentioned my views to the country manager two levels above me.
Next day, I told my boss what had happened and he threw me out of his office again. (he did it a couple more times over the next few days.} The country manager accepted my idea and was going to go to the US and outline the proposal and my boss was going with him. So they get to the meeting and first thing, before they could present the proposal, the country manager is demoted and my boss called me from the US, gleeful that my proposal was never presented to upper management. I was sick.
But, I knew the replacement for the country manager–he was the guy who gave me the worst chewing out of anyone in my entire career. Wonderful! But I knew he was data oriented, having known he refused to sign a document that was factually untrue and took the demotion that came with that refusal. He had overcome his demotions and was now doing good again. Anyway, I wrote him an email that started like this: Sir, this is a career ending email but I am 52 so I don’t care." (52 was when the retirement vested. but at that age, it would have bought me a big mac a month) I outlined my proposal and eventually he accepted, and we got my new seismic which conclusively showed we didn’t have anywhere near the sand we thought we did and they stopped spending good money after bad.
Amazingly, I was the only person who was associated with that project who benefitted from it. When I came back to the States to become Dir. of Technology, I got the biggest (and most coveted) promotion, and the biggest raise and bonus I ever got–from the guy who years ago, gave me my worst rear end chewing out of my career. lol
A couple of years after this, they shut the field and docked that expensive ship paying $$$ to keep it there and then about that time they sold the subsidiary for a fraction of what it had once been valued at. I was living in Beijing at that time, working for our China subsidiary, so I wasn’t sold off with the North Sea subsidiary.
Two years after the sale, the parent company was sold to another oil company for a lot of money and everyone, even secretaries and janitors, benefitted greatly from the sale. Unfortunately the 400 people in the North Sea subsidiary were no longer employees and they missed the opportunity to have a very comfortable retirement–the company they were sold to didn’t do very well all in all.
I have many more stories like this from my 47 year career of how consensus is nothing but group think and suppresses an honest discussion of facts on what ever issue consensus has spread its evil shadow over. So, people are trying to impress the wrong guy with the benefits of consensus. Go tell those 400 people who missed out on a big payday about the benefits of consensus!
edited to add, the company took a $400 million dollar write down as a direct result of this groupthink/consensus led disaster.