When Good Management Is a Matter of Life and Death

Recall the terrorist attack in Oslo, Norway, a year ago, when a lone terrorist first bombed a government building (killing eight people), then drove to an island where he murdered 69 mostly young people on a summer camp. The newly released report analyzing that day slams the police and the government for ineptitude, much like the infamous 9/11 report in the U.S.

How do you lead in a world full of crises, shocks, terror and disruptions? This question is relevant for CEOs and government leaders alike.

Jim Collins and I studied this question in our book Great by Choice in which we analyzed CEOs and companies that led successfully in such a world. From this and other research we know a few things that ought to be in place for leaders to successfully anticipate and respond to crises, turbulence, and disruptive change.

1. Leaders need to be productively paranoid. The successful CEOs in our study displayed an odd behavior that we labeled "productive paranoia." Herb Kelleher of Southwest Airlines predicted eleven out of the last three recessions. As Bill Gates said, "Fear should guide you." The successful CEOs in our study were hyper-vigilant about threats around them (the paranoia part) and also took action to mitigate those threats, whether in the form of building buffers or hedging (the productive part).

Prior to the Oslo terrorist attack, we saw the exact opposite of productive paranoia — a leisurely attitude. The government was supposed to build a security perimeter around the building, but just didn't get around to it. It did have a fast-response helicopter stationed in case of a terrorist attack, but this could not be used, because the staff was on vacation in July, like most Norwegians. (Did they believe that terrorists too take vacation in July?) The key here is for leaders to be hyper-vigilant, and especially when things are calm — because it could be the calm before the storm.

2. The system must connect the dots horizontally. After the bomb went off in Oslo, at 3:26pm, the terrorist jumped into a van. At 3:35pm, someone called the police with a tip that a man in a (fake) police uniform had acted weirdly when he got into the car. The tipster even reported the license plate number, a possible break in the case! But alas, the junior person on the police phone line wrote down the tip on a note and took it to a senior officer, and then the note somehow got lost sitting on a desk. This mishandling of vital information is eerily similar to the findings in the 9/11 commission report.

As I write in my book Collaboration, several barriers get in the way of effective information sharing. In this case, hierarchy got in the way — a critical piece of information got lost in the handoff from a junior to a senior person. A system cannot respond effectively when information has to flow up and down hierarchical lines: it is slow, and superiors often suppress the information because they do not see its importance or relevance or don't have time to respond.

We have seen this happen before. At Pearl Harbor, at 7:02 am on December 7, 1941, two U.S. soldiers operating a radar station saw something that looked like an incoming airplane; they telephoned an officer, who told them to forget it (the attack occurred 53 minutes later). In the Columbia shuttle disaster, junior engineers knew that there was critical foam damage on the shuttle, but they did not dare to speak up to more senior managers in a meeting on January 24, 2003.

Two management tactics could resolve this: First, junior people ought to be able to pass on information horizontally across units (and not just to their immediate superiors). Second, they also need to be authorized to follow through to see that the information is really acted upon (vs. just passed on), and if not, to act themselves. This requires that hierarchy is flattened, that people build rich networks across units, and that information technology systems cascade data across units.

3. The system must be able to handle information overload. The senior officer in Oslo who received the note with the license plate number was busy in the chaos that followed the bombing, which explains how the note got lost on the desk. Similarly, at Pearl Harbor, recall Roberta Wohlstetter's famous line: "We failed to anticipate Pearl Harbor not for want of the relevant materials, but because of the plethora of irrelevant ones." 9/11, too, was not anticipated in part because critical information was lost in a sea of data.

When a crisis strikes, in business or in government, the flow and speed of information go way up, and now more than ever. The ratio of noise to helpful information goes way up too, making it difficult to interpret and manage. As Nobel Laureate Herbert Simon said, "a wealth of information creates a poverty of attention." This means leaders have to increase the attention capacity in an organization. Do we have enough managers who can interpret the information rapidly and collaborate to establish a common understanding? Do our CEO and senior leaders get the information quickly enough and it is sufficiently unfiltered so that they can really see what is going on? Sadly, in hard times, leaders cut they very resources — people and systems — that increase the attention capacity.

The implication for every leader in business and government: you are judged by how well you prepare in advance for a crisis, not just by what you do when it hits.

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