Labyrinth- the Art of Decision-Making

by Pawel Motyl

  Among various issues highlighted as causes of the tragedy, one needs to be looked at here: the excessive authority enjoyed by the KLM captain and the context in which he made the decision to take off. Behind the joystick of the Dutch plane was KLM’s most experienced pilot, fifty-year-old Jacob Veldhuyzen van Zanten, who was also an instructor for the airline. Irritated by the long wait on the apron, 6 he decided to begin taxiing, despite the thick fog and the fact that poor communications with air traffic control meant he couldn’t be 100 percent certain that he had permission to take off. The captain’s decision worried the flight engineer who, despite his lower position and significantly less experience, was bold enough to ask the commanding officer whether the Pan Am plane had really cleared the runway. The captain replied curtly, in a firm, assured voice, “Jawel” (“Yes, of course”), so the engineer acquiesced. Fifteen seconds later, the two aircraft collided.

  The dangers resulting from the authority trap—the lack of psychological safety, lack of open communication, and the ensuing limited ability to analyze the situation—can be seen even more clearly in the disaster that took place barely eighteen months later in the USA. On December 28, 1978, a United Airlines DC-8 flying from Denver to Portland, piloted by the experienced fifty-two-year-old Malburn McBroom, ran out of fuel not far from its destination airport and crash-landed. The crash killed 10 people, including 2 crew members; 179 people survived. The investigation conducted by the National Transportation Safety Board (NTSB) showed that during the landing approach there was a fault with the landing gear: the indicator light showing that the gear had been deployed didn’t come on. Captain McBroom decided to abort the landing to check the condition of the landing gear. He then focused on that issue so much that he didn’t notice that he was almost out of fuel. It emerged later that he had also ignored the warnings of other crew members who raised the problem, a point stressed in the NTSB report:

  The probable cause of the accident was the failure of the captain to monitor properly the aircraft’s fuel state and to properly respond to the low fuel state and the crew-member’s advisories regarding fuel state. This resulted in fuel exhaustion to all engines. His inattention resulted from preoccupation with a landing gear malfunction and preparations for a possible landing emergency.

  Contributing to the accident was the failure of the other two flight members either to fully comprehend the criticality of the fuel state or to successfully communicate their concern to the captain. 7

  The report also included a recommendation that instigated a revolution in flight crew communications and in-flight decision-making:

  [It is recommended to] issue an operations bulletin to all air carrier operations inspectors directing them to urge their assigned operators to ensure that their flight crews are indoctrinated in principles of flight deck resource management, with particular emphasis on the merits of participative management for captains and assertiveness training for other cockpit crewmembers. 8

  This recommendation provided the impetus to start work on CRM—Cockpit Resource Management, later renamed Crew Resource Management—a breakthrough approach that would increase aviation safety. Working on and implementing CRM radically improved the quality of decisions made by pilots and meant numerous tragedies were averted. The foundation of the system is very similar to the dispersed leadership model—in CRM, the key to better decision-making by pilots is the greater involvement of other crew members in the process, improving the flow of information, and ensuring the relevant level of psychological safety is in place. CRM requires all crew members to be proactive and assertive, immediately and openly inform their colleagues about any concerns or doubts, and cross-check all decisions. Today, this standard applies to all personnel flying on every commercial airline; its effectiveness was demonstrated on July 19, 1989, a few years after its introduction, when the crew of United flight 232 from Denver to Chicago was faced with a serious technical problem.

  The McDonnell Douglas DC-10, used by airlines since 1971, had a very rare engine arrangement—as well as the standard two jet engines under the wings, it had a third engine, built into the vertical stabilizer. This engine was the cause of the United 232 catastrophe. At 3:16 pm, when the plane was at an altitude of 37,000 feet, the engine exploded, damaging all three independent hydraulic flight control systems. Alfred C. Haynes, piloting the aircraft, subsequently lost not only one of his engines, but worse still, all ability to steer the plane. The incident was a classic black swan, as the simultaneous failure of all three hydraulic systems had seemed highly implausible and so no standard response procedure was in place for it. Captain Haynes, a highly experienced fifty-seven-year-old pilot, knew that the chances of his finding a solution alone were virtually zero. From the very start, he involved his colleagues, first officer William Records and flight engineer Dudley Dvorak. In addition, when the captain informed the passengers of the necessity to carry out a crash-landing, first-class passenger Dennis Fitch stepped forward—he just happened to be a DC-10 flying instructor working for United, and he played a vital role in the preparations for landing. In the minutes that followed, the crew steered the plane using only engine numbers 1 and 3, trying to orient the plane toward the nearby Gateway Airport in Sioux City, and gradually losing altitude. Haynes, piloting in turns with Fitch, managed the impossible, flying the plane to its impromptu destination. Due to the damaged controls, the aircraft landed at a speed of 273 miles per hour (it’s usually around 160 miles per hour) and with a rate of descent seven times the norm. The plane’s right wing touched the runway and the aircraft broke up. Of the 296 people onboard, 111 were killed; the others were saved by the astounding cooperation between the crew and instructor, who adhered to CRM standards. Captain Haynes himself confirmed:

  But the preparation that paid off for the crew was something that United started in 1980 called Cockpit Resource Management, or Command Leadership Resource Training, or any number of things that you want to call it. I think we called it CLR to start with... Up until 1980, we kind of worked on the concept that the captain was THE authority on the aircraft. What he says, goes. And we lost a few airplanes because of that. Sometimes the captain isn’t as smart as we thought he was. And we would listen to him, and do what he said, and we wouldn’t know what he’s talking about. And we had 103 years of flying experience there in the cockpit, trying to get that airplane on the ground, not one minute of which we had actually practiced, any one of us. So why would I know more about getting that airplane on the ground under those conditions than the other three? So if I hadn’t used CLR, if we had not let everybody put their input in, it’s a cinch we wouldn’t have made it. 9

  Rule #16

  Encourage and create leaders around you. Dispersed leadership involves many people, which means there is less risk of a single person making a poor strategic choice.

  Dispersed leadership brings one more enormous, twofold benefit: agility and a rapid reaction to changing circumstances. Encouraging employees to be active observers of their work environment and involving them in communications and decision-making gives us a unique insight into what’s going on in and around not only our own organization, but also in other sectors. Dozens, hundreds, even thousands of employee eyes are scanning the horizon for black swans, operating like a human super-radar, helping protect an organization from unpleasant surprises. This enables us to react instantly when a crisis does threaten, placing us ahead of our rivals, who probably still haven’t spotted the threat. This is called business agility, and it is fast becoming one of the prerequisites for competing and succeeding in the modern world.

  You’ve probably heard the story about the two hikers who went trekking in the Rockies. After a full day’s hiking, they set up camp, had a light supper, and then went to bed in their tent. As they were dozing off, they were startled by the roar of a grizzly, who was angered by the intruders on his territory. The reactions of the two tourists were almost mirror images of each other. The first was hyster
ical, screaming and sobbing that he didn’t want to die; the other, meanwhile, calmly emerged from his sleeping bag and started putting on his sneakers. His panicked friend looked at him as if he were insane, and said, “You have no chance of running faster than a grizzly!” The other finished tying his shoes and replied, “I don’t want to outrun a grizzly. I want to run faster than you.”

  That’s what the business world is like. There’s no point in wondering how to become the fastest sprinter in the world, as there’s only one person who can hold that title, so our chances are relatively small. In practice, it’s about knowing that, like the hiker in the Rockies, we don’t have to outrun the grizzly, but our direct competitors. Business agility means understanding this tale.

  The combination of perspectives outlined on these pages leads us to a number of purely business conclusions. If we want to come out on top in an ever-more unpredictable world, we have to constantly work on increasing our competitive advantage. Yet this is a fragile and highly ephemeral advantage—technological and social revolution and changes in consumer behavior or breakthrough innovations can undermine it at any moment and floor even market leaders. So it’s agility that counts, the ability to respond rapidly to new events and adapt an organization to fit the new circumstances. Today’s “business Darwinism” can be summed up in one sentence: it’s not the fittest that survive, but the fastest to adapt. Agility, then, demands the combining of up-to-date, tested decision-making procedures and improved and accelerated actions in repetitive processes and tasks with the ability to properly assess a state of affairs and adopt an inquiry approach in nonstandard situations.

  In the most successful companies I’ve dealt with as an advisor and trainer, there has always been a combination of four elements directly affecting the quality of decision-making and business agility:

  Clear decision-making structures: precisely defined rules for decision-making, complete with clearly defined parameters for specific individuals to make decisions, that have been communicated to all the relevant employees and are constantly monitored in terms of coherence and completeness (eliminating overlapping responsibilities, identifying “orphan” areas and elements—those not assigned to anyone—in the process).

  Continuous improvement: consistently learning the lessons from errors (our own and others’), ongoing analysis of what the competition’s doing, seeking out best practices in a variety of functions and sectors, creating a culture of “micro-innovations,” with every employee looking for incremental improvements, and periodic stress-testing of procedures for resilience to extreme events.

  An organizational culture promoting psychological safety: encouraging open communication, including the ability to express divergent opinions, promoting constructive conflict, encouraging new employees to voice their opinions and acting on what they say, maintaining a culture of consultation and participation regardless of employee status, providing a chance to avoid many of the traps set for us by our cognitive mechanisms (equivalent to the CRM approach in airlines).

  Dispersed leadership: leadership attributes and attitudes are seen at various levels of the organization and in numerous employees, leading to better monitoring of the business environment and shaping the attitudes of others; this can also happen through the creation of formal and informal “decision-making teams,” along the lines of JFK’s EXCOMM.

  This combination of factors not only enables faster and better decisions to be made, but also helps us better understand the consequences of our decisions for other areas of an organization’s operations. As a result, it’s possible to identify potential side-effects, which, given the increasing interdependence and complexity of business systems, is priceless. Involving people from various positions and levels in the hierarchy in the decision-making process significantly increases the chances of spotting such problems. 10

  During a press conference in 2002, Donald Rumsfeld said, “[T]here are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns—the ones we don’t know we don’t know.” 11 Many were less than complimentary about this word salad; the Plain English Campaign, an independent organization fighting for clarity in the use of the English language, gave the Defense Secretary its Foot in Mouth Award (awarded for “baffling quotes by public figures”). The fact is, though, that Rumsfeld was right, and differentiating between matters we know we know nothing about and things whose existence we don’t even suspect is fundamental in terms of today’s reality, the new normal, and effective decision-making processes. The unknown unknowns are the ugly ducklings that grow up into black swans and cause us real problems. And therein lies the beauty of dispersed leadership—it provides a broader spectrum from which we can observe the reality surrounding us, and it requires the involvement of a variety of types of experience, knowledge, and personalities, all of which enables us to locate problems in the three categories identified by Rumsfeld. Thanks to the input of others, we can identify our own areas of incompetence, whereby an unknown unknown turns into a known unknown, enabling us to take specific corrective or preventative actions. The experience of others can, in turn, change a known unknown into a known known, delivering knowledge and ideas that resolve a problem. 12

  In this way, dispersed leadership can be a highly effective weapon when used against black swans.

  Albert Camus once said that life is the sum of all your choices. Who we are, where we are, how we are perceived, and where we are headed are the result of the choices we make every day—large and small, often unconscious, they can affect many others and can have consequences for the rest of our lives.

  Just as I don’t believe in the absolute decision-making powers of AI, neither do I believe in absolute determinism. I don’t believe that humans are just flotsam and jetsam being tossed around by the waves. I don’t believe that the world around us makes our decisions for us and pushes us in a given direction. I’ve come across too many tales of fascinating individuals who, seemingly doomed to failure, were able to turn their situation around and shape their own destiny, rather than being shaped by it.

  I believe that our quality of life is directly related to how close to perfection our decisions are. The quality of a decision, in turn, depends on how far we are able to avoid the thousands of traps set for us by our own personalities and the pressures of the world around us. I am convinced that while no one has created, or ever will create, a formula for making only optimal decisions, there is a world where we can make better choices that we should actively seek out. A world in which we strive for perfection, expand our knowledge, gather experience, and, consequently, make better decisions. A world in which even if we make a mistake, it is the result of a bold experiment, an attempt to uncover far more effective ways of operating, and not the senseless repetition of yesterday’s errors.

  I hope the book you’ve just read will bring you closer to that world.

  Rules Summary

  Rule #1. Prepare for a black swan, because one thing is certain: sooner or later you will meet one.

  Rule #2. The better it’s going, and the more successful you are, the more you are at risk of turkey syndrome.

  The deeper you fall into turkey syndrome, the nastier your black swan will be.

  Rule #3. The more you admire someone, the more critically you should examine their opinions.

  The more exciting somebody’s vision seems, the more closely you should test its foundations in reality.

  Rule #4. The more everyone around insists something is impossible, the more you should check it yourself. Several times.

  Rule #5. The greater the investment of time, effort, money, and our own reputation, the harder it is to objectively assess a situation and make the right decision.

  Rule #6. If you find yourself in a black swan situation, go into inquiry mode. Whatever your intuition or experience is telling you may
be wrong.

  Rule #7. Set up your own EXCOMM. Surround yourself with people who don’t think like you. Value those who disagree with you, and who aren’t afraid to say it.

  Rule #8. When improving an organization, also pay attention to the best and most efficient processes.

  In a black swan situation, they can fail. Do you have a backup plan?

  Rule #9. Shoot down Concordes and hunt for monkey habits.

  Eliminating loss-making projects and ineffective practices frees up time for other things, increasing a company’s agility and flexibility.

  Rule #10. Recognize the value of your failures (and those of others).

  Thoroughly analyze your past failures and draw in-depth, objective, and actionable conclusions for the future.