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The Cost of Complacency and Ignoring Early Warning Signals

BlogMon Nov 16 2020Written by Sigbjørn L. Tveteraas4 minute read

For organizations, success can be a treacherous companion. Success creates complacency and tunnel vision that insulate leaders against early warning signals. This is a lesson NASA learned the hard way.

Following the Challenger space shuttle disaster in 1986, NASA launched numerous successful space shuttle missions. The streak of successful missions lasted until the Columbia space shuttle return flight on February 1, 2003. When reentering the atmosphere after its space mission, the Columbia space shuttle burst into flames, killing the crew of seven. 

As Ozan Varol (2020) explains in his excellent book on thinking like a rocket scientist, the ensuing investigation identified the technical problem causing the disintegration of the Columbia space shuttle. Foam debris from an external tank had damaged the shuttle's protective heat shields. When reentering the atmosphere, the temperatures reaching around 1,580 °C ripped the shuttle apart. 

The foam explains what technically went wrong during the space mission, but not the underlying causes. The investigation identified the root causes to be linked to organizational and cultural issues at NASA. Prior to the disastrous flight, NASA failed to notice the early warning signals and to delay the shuttle launch. 

During Columbia's last flight, one engineer was acutely aware of the imminent danger. They had discovered damages from the shuttle launch videos, and the engineer suggested the crew should attempt a spacewalk to inspect and fix it. However, poor internal communications at NASA and a culture of treating this as a calculated risk and a recurring event meant the alarm bells again were rebuffed. 

The handling of the foam issue, which at the time was poorly understood, was later described as a game of Russian roulette. Just because sufficiently favorable (i.e., lucky) conditions during previous flights did not lead to accidents, the danger was still very much present. 

The lesson NASA learned - and that business leaders can take away - is not to ignore early warning signals, even if they may turn out to be misplaced. A company can sit comfortably as a market leader while being blind to competitors steadfast, eroding the foundations of its success. As Bill Gates put it: "Success is a lousy teacher. It makes smart people think they can't lose".

If our company loses market share, the correct explanation is not 'the competition.' That is the 'foam' explanation - what happened. The right answer to the 'why' question is bad decisions or inactions on our part. This is the root cause. 

When Netflix captured signals that the DVD rental market was waning, they redefined their strategy as one of bringing movies to people and migrated their business to the streaming market. Nobody claims it was a smooth ride. First, Netflix considered a model of downloading movies, but the popularity of YouTube made Netflix shift its focus to streaming. Also, the shift into streaming created friction with its existing online DVD rental business. In the end, however, it was this move that created the foundation for Netflix's future success.

As Varol (2020) surely agrees on, these narratives about NASA and Netflix obviously simplify what happened and the clarity of the early warning signals. With the benefit of hindsight, we can always retell stories that present events in a clean and linear fashion instead of the chaos that actually took place. 

In a messy, fast-changing World, signals pour in from all directions. Making sense of signals in the context of your own business is nothing but easy. Mindpool will not reduce the complexity, as it will bring more information - more early warning signals - to the table.  

However, with the help of your employees, Mindpool makes it easier to interpret the signals. By aggregating numerical judgmental foresight and lumping related information together, you can discover where employees expect performance to improve or become worse. This includes why they believe performance will move in one direction or the other and what actions they recommend the company to perform to improve performance. 

An option is to run additional iterations where Mindpool asks employees to rank the relevance of the information they previously shared collectively. In this way, employees contribute to shaping more clearly the strength of the different signals.

By Mindpooling regularly, you can compare updated information with previous forecasts, increasing the informational content of employees' current opinions. Specifically, repeated use of Mindpool allows us to detect early warning signals with more confidence, tracking if an early warning signal is becoming weaker (and losing relevance) or larger (requiring immediate action).  

We believe that leaders who embrace and act on employees' predictions and insights using Mindpool will not only foster more enthusiastic and engaged employees but will also push them to develop their environmental scanning and sense-making skills for the betterment of your company's performance.

NASA ended its space shuttle program in 2011, but its legacy lives on in the SpaceX program. SpaceX has made huge leaps forward. Its managers and engineers continue to do their best to stay vigilant to avoid being blindsided by their initial success. 

Reference:

  • Varol, Ozan (2020). Think like a rocket scientist: simple strategies you can use to make giant leaps in work and life. Public Affairs.

You've just read a blog post from Mindpool - a platform that helps you harness the collective intelligence of employees. Mindpool taps into the knowledge of employees to provide actionable predictions and curated insights. Mindpool is rooted in decades of research in collective intelligence. Read more from our resource universe or contact us here if you'd like to tap into the valuable knowledge of your employees.

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