Decision making: It's all about taking off - and landing safely…
5 December 2011 |
Klaus Schwab from the World Economic Forum, opened one of the WEF's meeting last month by saying " Complexity, velocity of global issues means decision makers are always behind". From heads of state to corporate decision makers, everyone is struggling with the same challenge: too much - too fast. There is one profession however who has studied carefully decision making, and systematically trained thousands of decision makers to allow them to make decisions in minutes, often in very uncertain conditions : the airline and airplane industry. Managers and executives could learn from them.
What airplane pilots could teach businesses and leaders in the "art" of decision making
An article published in the McKinsey Quarterly triggered my thinking a couple of month ago. The author, Lowell Bryant, was highlighting the need for "just in time" decision making in companies.
"Much of the art of decision making under uncertainty is getting the timing right. If you delay too much, investment costs may escalate, and losses can accumulate. However, making critical decisions too early can lead to bad choices or excessive risks"
90% of pilot training include decision making. Professional pilots spend hundreds of hours in simulators and in the cockpit trying to tackle one key challenge: those 3 or 4 minutes where, one day in their career, they will have to make the one decision that will result in the life or death of hundreds of passengers.
The environment a pilot is navigating is not that dissimilar than the corporate environment and its many uncertainties and disruptions: a bird striking your engines, icing accumulating on the wings, an unexpected delay resulting on an aircraft been in your flightpath... as those happen, the hundreds of hours of training are coming into play.
This is how we train pilots to make the right decision.
Understand biases induced by the way our brain, and more specifically our senses are built.
As a pilot feels the skin of his/her back pressing against the back of the seat, he/she will assume the plane is accelerating. However, it can also be the results of a plane which nose has unexpectedly pointed towards the sky, and which is climbing sharply while loosing speed. Polits also are well aware of the Graveyard spiral: an observed loss of altitude during a coordinated constant-rate turn that has ceased stimulating the motion sensing system can create the illusion of being in a descent with the wings level. The disoriented pilot will pull back on the controls, tightening the spiral and increasing the loss of altitude. Mistakes like this have in the past led to terrible accidents, one of them been the decision made by the Air France pilots during that terrible Rio-Paris crash.
See here a documentary by the BBC on the Air France Rio-Paris crash, largely due to pilot error.
Most significantly, we now when we train pilots that biases are accentuated in the following situations:
Expectations based on experience: pilots compare the information they get with what they have learned from past experiences. For example, the image of the runway as they are about the land is compared with the image from runways they are used to. If a runway is narrower or larger than what they are used to, it can result in an inaccurate estimate of airplave height.
The recent decision by HP's CEO to exit the computer world and focus on developing software is partly driven by Leo Apoteker's experience at SAP. This logic can have unexpected consequences: it implies that the most experienced CEOs might be the ones who are most likely to make the wrong decisions.
Expectations based on anticipation: as a pilot is getting ready to take off, he/she is waiting for the final green light from the tower. Accidents have happened when the insctruction that followed " cleared into take off position" can be understood as "cleared for take-off" ( resulting a few years ago in a collision of 2 Boeing 747 in Tenerife). Similarly, we have observed CEOs who after having presented a strategic plan to a less than luke-warm board of directors, have taken the quiet reserve or lack of decision for a green light.
Expectations based on habits: if a pilot is used to parking his/her plane on "Parking Area Alpha" and exceptionally receives the instruction to park in "Parking Area Golf", the risk exists that the pilot still goes to Alpha, even after having repeated accurately the instructions to the tower. This bias explains why so many executives keep repeating the same patterns or decisions, even when their environment is clearly shifting ( this is currently happening in the telecommunication industry).
You will find additional information about strategic biases in our article : "Strategic Blindspot Index" ( see here ).
When under stress, revert to checklists
To allow the mind to focus on the important task of assessing the situation, checklists have been built to allow pilots to process information fast and get data he / she needs. This is due to the fact that to the best of human abilities, the mind can only process 7 pieces of short information at a time ( this is why in most countries most phone numbers have 7 digits). Offloading pilots on steps to follow in an emergency situation has been crucial to the profession. As far as I know, no such checklists have been developed for CEOs and executives ( except in extreme crisis situations).
If one looks closely at how those checklists have been developed overtime, an interesting process emerges: checklists have been crowdsourced to the entire flight community. Any incident, any accident is logged, discussed and shared in publications and training session so that the knowledge in the industry can collectively grow. No such process exists in the corporate world. Companies struggle to share knowledge internally, and certainly, no repository exists today to share failures, and debate them publicly. A few initiatives have emerged, such as the MIX ( Management Insight Exchange), but they have only gained limited visibility.
Be physically shaped for decision making
A significant percentage of human errors occur under stress. There is a code of eating behavior that guides pilots to be physicallly shaped for decision making.
In addition, the aerospace community has studied those factors carefully and are able to anticipate situations when decision making might fail ( for more, see here ).
A questionnaire concerning life changes, personality factors, and adjustmental and leadership qualities of U.S. Naval aircrewmembers involved in aircraft accidents was sent to investigating flight surgeons during 1977-78. The responses were divided into two groups: those who were causally involved in accidents and those who were not. In order to cross-validate the results, data were collected and analyzed. Results indicate that aircrewmembers in the process of deciding about staying in the service are more likely to fall into the causally involved group. So were those who had trouble with interpersonal relationships, had no sense of humor or humility concerning themselves, were immature, or had recently lost a friend or family member through death.
Source: A questionnaire study of psychological background factors in U.S. Navy aircraft accidents ( Alkov RA, Borowsky MS.)
I have not seen one company that has adopted a eating guide, health and fitness code (and requirement) for its executives. Few have tackled the issue of executive support and coaching to deal with stress factors. Finally, I also have never seen a "sense of humor" test as part of the recruiting toolkit...
Understand the role of intelligence
When flying, pilots do have an array of information they can tap into: numerous maps of existing weather and wind conditions, 3-hour forecasts, a radars, insights from the control tower, etc...
Similarly, executives can base their decisions on a flow of information and data. The competitive and strategic intelligence process is therefore a key part of their decision making process. A recent survey of North American companies ( 2011 Global Market Intelligence Survey) shows that 84% of companies have implemented a structured intelligence process in house. On average, North American companies have teams of 10 people with competitive intelligence as their primary role, which cater to 1,162 internal clients. Furthermore, nearly 70% of North American companies intend to increase their investments in competitive intelligence (also known as market intelligence) in 2012-2013.
Flight instructors know the law of intensity: the best way to anchor learning in a student is to experience the effect of mistake emotionally. For example, we often let the student pilot stall the aircraft and go for a spin. A new pilot will never forget this experience - and hopefully recognize the signs early in the future.
Pilots wil rehearse the same crisis situation many times, each time with an added twist or new factors to learn to make decisions without anchoring to a past situation.
Similarly, role playing, business simulations and war gaming can help executive play out possible outcomes in crisis situation. The "World without Oil" is a great example of how this might be done.
WORLD WITHOUT OIL is a serious game for the public good. WWO invited people from all walks of life to contribute "collective imagination" to confront a real-world issue: the risk our unbridled thirst for oil poses to our economy, climate and quality of life. It's a milestone in the quest to use games as democratic, collaborative platforms for exploring possible futures and sparking future-changing action.
Do not trust your instruments
Pilots learn early not to trust their instruments entirely, and only when they can triangulate the information. As instruments can lie, or break down. Again, the recent accident of the Paris-Rio Air France flight illustrated how difficult it can be to make the right decision when one instrument ( in that case a frozen speed indicator) fails. It is only by looking at the full picture that they make up their mind about the real situation.
Similarly, companies should revisit their key indicators. One way to avoid blindspots can be to systematically revisit the type of information that is collected and communicated and take some key assumptions off the equation: if my sales go up, and the number of customers as well, does it mean I attract the best ones ( or that I am failing like in the subprime case) ? What if the indicators say the opposite ? Am I monitoring the correct dashboard ?
Train for the situation
Pilots are trained specifically for each type of aircraft they fly. In fact, they will get additional training each time they change the type of aircraft they are flying.
Managers don't. When new CEO of HP joined from SAP, he applies to his new business the same principles as the ones what seemed to work at SAP. He divested of hardware, and directed the company towards software. I do not know business schools today which differentiate their training based on the type of company managers will work with. What about an MBA in Telecommunication management? An MBA in retail management? ( of course, it would also be interesting - and innovative- for a telecom company to hire a retail management MBA to bring in a different way of doing business....)
Managers and executives are still largely trained today the same way they were trained 50 years ago. Little emphasis is put on decision making, which is one of the key skills in today's turbulent environment. As other professions have developed an acute understanding of the decision making process, we should, as a business community, learn from them.
Estelle Métayer brings vast experience and fresh perspective to the ever-changing world of Competitive and Strategic Intelligence. A noted expert, her intuitive, precise research provides managers, CEOs, and board members with the right tools to effectively build and hone their competitive intelligence and strategic planning - to avoid blind spots, capitalize on strengths and excel. Estelle is also a commercial pilot and Certified Flight Instructor.