Fred Herzner, a former engineer and flight safety program manager at General Electric, believes that if he had made a different decision three decades ago, a United Airlines plane crash that claimed 111 lives could have been avoided. The thought that he had not taken the necessary steps did not leave Herzner for many years.
“What Did We Know? What Did We Do?” book summary uncovers the hidden secrets of that story.
He decided to conduct a study on his own to figure out how people and organizations make important decisions and find out how they could do it better. Herzner warns leaders: you must not cheat yourself or put money, results and deadlines above safety and ethical standards. The author builds a clear step-by-step strategy for making optimal decisions. Herzner’s book, imbued with a sincere feeling and based on personal experience, is addressed to all leaders,
United Airlines Flight 232
In July 1989, United Airlines McDonnell Douglas DC-10, flying on flight 232, crashed while landing in Iowa. Killed 111 people out of 296 onboard. At that time, Fred Herzner was the leader of a group of engineers at GE who developed a jet engine mounted on a crashed ship. Herzner and his colleagues designed that part of the engine, the breakdown of which was the cause of the disaster.
From this event, a long-term study of the author of the book began: he decided to figure out what his team had done wrong and what all the people involved in the event could have done differently. His investigation raised a more general topic of decision-making in organizations. It turned out that when the wrong decision leads to a scandal or disaster, most employees of the company experienced a real shock.
“Six factors influence the way people and organizations make decisions: values, goals, culture, the complexity of the organization’s structure, company-measured indicators and risk perception.”
The fan disc in the DC-10 tail engine cracked and shattered into pieces. This breakdown, in principle, should not have cardinally complicated the flight – the aircraft had two more engines on the wings. But all three pipelines of the hydraulic system with which the aircraft is controlled were located next to the tail engine; splinters of a disk pierced them, incapacitating the control system. In such a situation, the crew could carry out only individual maneuvers.
They tried to land the plane, redistributing the load between the two remaining engines. Not a single pilot has ever succeeded in doing this under real conditions or on an airplane simulator. Thanks to the actions of the crew, 185 people were saved. Emergency landing of flight 232 is considered an example of the highest class craftsmanship in aviation history.
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How to Prevent Wrong Decisions
Scandals associated with the products of large companies occur regularly. But in the modern world, with its inherent super connectedness, it is becoming increasingly difficult to evade responsibility or to pretend that nothing has happened. The explosion of the Deepwater Horizon oil platform, lead pollution in Flint (Michigan), faulty ignition locks in GM cars, underestimation of the level of harmful emissions in Volkswagen engines – these are just some of the recent scandals with the most serious consequences. The sad lessons of these catastrophes will probably keep us from similar mistakes in the future. If the wrong decisions cannot be prevented, it can lead to new victims, environmental pollution, reputational damage, loss of trust, loss of employee enthusiasm, financial loss, litigation – or all of the above.
“The enterprise must act in accordance with ethical standards. If you intend to stay in business, this law does not allow any compromises. ”
In almost all cases, the cause of the disaster is not one solution, but a chain of interconnected wrong decisions. But enough to break this sequence – and, quite possibly, the chain will break up and tragedy will be avoided. When working on a project involving risks, any company, team, and employee should carefully keep records of all decisions made and subsequent actions.
Many decisions are affected by financial calculations. But the company’s values and ethical principles, including its commitment to security, are able to withstand the dictatorship of money and tight deadlines. Undoubtedly, upholding one’s values and ethical principles is much more difficult than letting money play a decisive role in decision making. Particularly acute dilemmas arise in companies involved in potentially hazardous activities, for example, flights or deep-sea drilling. When you are looking for a balance between risk tolerance and financial loss, imagine that your actions led to tragedy. And then put yourself in the shoes of investigators and the public, studying in detail your decisions, actions, and motives.
“The world has changed a lot, but the basic requirements for how the organization should work are professional and responsible.”
Decision-making is influenced by factors such as values, corporate culture, structure and levels of company management, as well as relationships with all interested parties. Organizational culture shapes the behavior and decisions of employees. It is enough to see why the company encourages and rewards its employees, which indicators it monitors, and it becomes clear what is important to it and what its culture and priorities are. Organizations with a high culture express their appreciation to those employees whose solutions provide maximum security and at the same time take into account the needs of the business. In such an organization, anyone can raise the issue of safety or ethics with management, and such a step will not have any unpleasant consequences, even if it is a false alarm.
The most time-consuming task that we face in making important decisions is a risk assessment. In many cases, we cannot adequately assess the risks, since such an event – for example, rotor failure in the DC-10 engine – has never happened before. In that situation, GE should have taken into account other factors that indicated the likelihood of failure.
Engineers and managers had to take into account both the likelihood of an accident and its consequences – it is obvious that the termination of flights of a particular model of the aircraft around the world harms the reputation of the manufacturer, damages the business of its customers and forces thousands of people to cancel their planned trips.
“Not in money is the root of all evil. Organizations, people, and how they earn and spend money – that’s what it depends on whether this money serves good or evil. ”
In the chain of decisions that led to the collapse of the DC-10, a lot of specialists from different organizations were involved. However, if we analyze only the work of GE, the catastrophe occurred as a result of four basic miscalculations:
1) during the design, an erroneous decision was made to place vital pipelines near the engine;
2) there was a metallurgical defect in the titanium alloy from which the disk was made;
3) this marriage went unnoticed during the initial production control;
4) it was not noticed even with all the numerous checks over the years of operation. In general, the likelihood of a catastrophe seemed very low.
“In a well-built culture … ethical behavior is the norm in doing business.”
GE engineers studied known cases of rotor failure of aircraft engines of this type. At the same time, they knew that their inspections were not able to identify all the defects.
Herzner recommended the use of the latest ultrasonic flaw detection technology. But it would have cost more and would have required more time, and the head of the GE department, responsible for the control of engines for airlines, considered that the transition to a new method would lead to unnecessary costs for customers.
Herzner did not insist, because before there were never problems with fan disks. It was decided to confine ourselves to ordinary examination. Engineers issued permission to use the part, and it was again installed on an airplane, which soon crashed.
The catastrophe led to the fact that GE introduced a more stringent multi-level security system, which is based on several rules. When a firm follows clearly defined rules, the likelihood of accidents is reduced. And if the tragedy nevertheless happened, then actions in accordance with these rules can mitigate its negative consequences and demonstrate that the organization responsible for the incident showed due diligence.
“VW’s problem was a vicious mix of hard-wired goals with a corporate culture that rewards success and doesn’t care at what cost it is achieved.”
Safety must be more important than financial success. Make ethics and safety the key values of your corporate culture and make sure that every employee knows about these values. When making a responsible decision, find out the point of view on the issue under discussion from many people and encourage the expression of opinions. Employees should not fear negative consequences by raising safety or ethical issues. Check the facts before acting. After deciding on the sequence of steps, conduct checks to ensure that the decision is being made.
“For the decision-maker, the right risk assessment is the ultimate dream, like the Grail.”
Clearly draw the lines of responsibility. Fix all final decisions to top managers. Top management should take responsibility for incorrect decisions, raise ethical and safety issues, constantly state their desire to know about all the bad news, guarantee employees who report troubles, protection from the organization.
Gulf of Mexico Oil Spill
In 2010, three corporations – BP, Transocean and Halliburton – joined forces to drill an oil well in the Gulf of Mexico more than 5,500 meters below sea level. This initiative was preceded by a successful proposal and exemption from environmental assessment by the US government. The project included the construction of the new Deepwater Horizon drilling platform.
Neither damage to the gasket on the blowout valve, nor Halliburton’s repeated warnings about the “easy path” chosen by BP, suspended drilling. Engineers were constrained by the corporate budget and tight timelines. The oil company refused the final crucial test of the platform in order to save one working day and about 120 thousand dollars.
“Be faithful to the principles, follow the established procedure and believe that all participants will make a decision that takes into account both the values of the company and the stringent requirements of the business.”
On the day the project was supposed to be completed, April 19, 2010, an explosion occurred on the platform. Killed 11 members of the team, 17 were injured, and then oil for three months flowed unhindered into the bay, causing irreparable damage to the environment. As of 2013, this tragedy cost BP $ 42.2 billion, which the company paid in civil and criminal lawsuits. The chain of wrong decisions that led to the disaster lined up for many months, despite all the warnings of the contractors.
Faulty General Motors Ignition Locks
The first fatal accidents associated with malfunctioning ignition locks in GM cars occurred in 2005. Already four years before, engineers began to suspect this technical problem, but the company’s leadership did nothing for years since there were no injuries or deaths for the time being. The presence of a latent defect in millions of cars eventually led to a real GM crisis. The CEO has been replaced by several people. In 2009, the company filed for bankruptcy.
“Worse than the lack of a plan can only be a very solid plan that is not being implemented.”
Despite the fact that more and more people were killed in accidents with the Chevy Cobalt and Pontiac G5, the connection between the sudden disconnection of the ignition and the failure of the airbag in an accident was not clear enough for GM to take effect. And yet in 2014, the company was forced to recall more than two million cars worldwide. The number of victims increased for almost 10 years due to the fact that at that time GM experienced a shortage of strong leadership and processes based on clear ethical values.
Flint’s Poisoned Water
The story of water pollution in Flint, Michigan began in 2011 when a financial crisis manager was appointed to lead the bankrupt city. All decisions were made taking into account the need to save money or avoid costs. In 2014, city authorities refused the services of the previous long-term water supplier from Detroit and relied solely on an emergency water supply system, which was hopelessly outdated.
Despite the fact that water was now taken from a more dirty source, quality control and purification was carried out according to lower standards, in a cheaper and primitive way. As a result, Flint residents drank high lead water for 19 months, in addition to E. coli. This continued despite numerous complaints, warnings, and evidence from independent experts.
The health of Flint residents was endangered due to the political focus on cost savings and the willingness of the city and state administration to be content with the lowest standards. The case ended with a lawsuit, but the worst result, probably, was the fact that many citizens ceased to trust the authorities – both in Flint and beyond.
In Volkswagen’s corporate culture, every means was good for the goal. Leadership created an atmosphere of fear and cultivated the principle of “do it at all costs”. When the engineers realized that they were not able to bring the diesel engines in line with the US emission control standards, they decided to falsify the results of environmental tests: they installed software on the cars that reduced emissions during the test. And even when new checks revealed fraud, the company for almost two years denied the obvious.
As of 2018, the full amount of VW losses is unknown. The executive director was fired, the company went on a massive recall of cars, suspended sales, faced numerous lawsuits, incurred expenses for financial obligations,
A cautious decision can cost millions if a valuable chance is missed because of it or it requires additional very costly security measures. However, if employees are afraid to raise important issues and challenge decisions – as was the case in VW – then at the lower levels of management monstrous mistakes can be made.
“There is no easy way to make difficult decisions. Never do it alone. ”
Develop a general plan in advance in case of disaster. So, Ford has a “team-oriented problem-solving” program consisting of eight steps. In the event of an incident, a team of experienced specialists from different areas is formed. It determines the essence of the problem, draws up a short-term action plan designed to reduce the effects of negative factors, and at the same time analyzes the causes of the incident.
Then the team tests different options for long-term corrective measures and implements the most effective ones. Everything that happens should be carefully documented to avoid a recurrence of such situations. The task of the leader is to check how this plan is being implemented. Do not think that everything will happen by itself.
- Some activities are, by definition, associated with risk – whether it is airplane control or deep-sea drilling.
- Find a balance between risk and desire to seize the opportunity. Make decisions, remembering above all about safety, ethics, and transparency.
- Tragedies almost always result from a chain of wrong decisions. If you break this chain, then the tragedy may never happen.
- Most often, monetary issues influence decision-making.
- Both Volkswagen with fake exhaust test results and GM with defective ignition locks had many opportunities to fix these defects, but both companies chose to save profits.
- Never make an important decision alone – engage those you trust in this.
- Any important decision must be made at the organization’s leadership level.
- Make sure that everyone involved in a process knows their level of responsibility and authority.
- The task of the leader is to regularly emphasize the paramount importance of ethical standards and safety.
- Employees should not be afraid to ask their bosses uncomfortable questions.
Why You Should Read “What Did We Know? What Did We Do?”
- To be able to take calculated risks
- To start making the right decisions
- To cultivate the habit of asking uncomfortable questions that can lead to a positive result
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