Process Loss and Cross-Functional LP Teams

process loss, Loss Prevention Team

Ask any loss prevention team what the most important aspect of interfacing with senior management is, and you’re likely to hear the terms “partnerships” and “cross-functional.”

These elements are not specific to the loss prevention industry. You would probably hear a similar response from an executive in any other department.

Working cross-functionally is a critical component to a successful loss prevention program. Loss prevention departments often add value to the organization by assisting other business units with their unique investigative and technological tools. Additionally, there may be times in which those business units return the favor.

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Organizations call upon the diverse skills of cross-functional teams to tackle complex issues in the organization.

For all the value that cross-functional teams provide, it is worth understanding their flaws. This may be best explained by the social psychology concept “process loss” related to group decisions.

Process loss is a general term that describes inefficient problem-solving in groups.

Psychologists found that groups tend to focus on the information that they have in common, rather than their specialized knowledge.

For example, a group containing IT and loss prevention may focus on areas of knowledge overlap rather than deploying their specialized knowledge, which is the entire point of a cross-functional team.

Researchers demonstrated this concept by giving two groups information related to a political candidate, in which positive information was double that of negative information in both groups.

However, one group received individual items, in which the negative information overlapped among group members. This group chose to discuss the information they had in common with each other (negative), which resulted in a much greater negative opinion of the candidate compared to the other group.

In the 1950s, researchers demonstrated individual participants’ desire to conform to a group majority in a series of psychology studies referred to as the Asch conformity experiments. In these tests, researchers demonstrated that group members changed their opinions based on the overall attitude of the group. Said another way, the group members showed that they did not want to “rock the boat.”

Unfortunately, sometimes the boat needs to be rocked if the data suggests that it should. Some participants may feel pressure to compromise even when they should not. Conformity in these situations is detrimental to the success of the organization.

In another example of process loss, groups have the ability to ignore the expert on a subject and democratize decisions. If the majority feels one way, they may reach a decision regarding a subject about which they have no expertise.

Imagine a cross-functional group overriding the organization’s legal team regarding a legal matter. In these instances, it may be best to allow the subject matter expert to make the call. In the loss prevention industry, we may see this happen regarding allocating physical security resources. If best practices are ignored, there could be some creative reasoning regarding where resources go. This decision could ultimately result in liability for the company.

It doesn’t make sense to label cross-functional teams as bad. They’re not. Moreover, cross-functional teams are vital to the professional growth and skill sharing of an organization. However, it’s important to understand when a cross-functional loss prevention team may be going off the rails.

Recognizing knowledge overlap and conformity can give group members the ability to step back and refocus. Unfortunately, claiming to be the expert isn’t the most effective way to convince a group. In this case, partnerships and influence are key. If you’re an influential loss prevention director or other business partner, everyone probably already knows you’re the expert.

This article was originally published in 2014 and was updated September 17, 2018. 

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