ADM 612 – Leadership Predictable Surprise: Hurricane Katrina and Government Accountability

Source Max H. Bazerman and Michael D. Watkins Predictable Surprises: The Disasters You Should Have Seen Coming and How to Prevent Them.

New Orleans, Louisiana

Gulfport, Mississippi

Biloxi, Mississippi

Predictable Surprises A predictable surprise arises when leaders unquestionably had all the data and insight they needed to recognize the potential for, even the inevitability of, a crisis, but failed to respond with effective preventative action. Example: 9/11. Example: Enron scandal. A predictable surprise arises when leaders unquestionably had all the data and insight they needed to recognize the potential for, even the inevitability of, a crisis, but failed to respond with effective preventative action. Example: 9/11. Example: Enron scandal.

Characteristics of Predictable Surprises Leaders know a problem exists and that the problem will not solve itself.

Characteristics of Predictable Surprises Organizational members recognize that a problem is getting worse over time. Fixing the problem will incur significant costs in the present, while the benefits of action will be delayed. Organizational members recognize that a problem is getting worse over time. Fixing the problem will incur significant costs in the present, while the benefits of action will be delayed.

Characteristics of Predictable Surprises Addressing predictable surprises typically requires incurring a certain cost, while the reward is avoiding a cost that is uncertain but likely to be much larger.

Characteristics of Predictable Surprises Decision-makers, organizations, and nations often fail to prepare for predictable surprises because the natural human tendency to maintain the status quo. A small vocal minority benefits from inaction and is motivated to subvert the actions of leaders for their own private benefit. Decision-makers, organizations, and nations often fail to prepare for predictable surprises because the natural human tendency to maintain the status quo. A small vocal minority benefits from inaction and is motivated to subvert the actions of leaders for their own private benefit.

Cognitive Roots of Predictable Surprise We tend to have positive illusions that lead us to conclude that a problem doesn’t exist or is not severe enough to merit action. We tend to interpret events in ways that are self- serving. We tend to have positive illusions that lead us to conclude that a problem doesn’t exist or is not severe enough to merit action. We tend to interpret events in ways that are self- serving.

Cognitive Roots of Predictable Surprise We overly discount the future. We tend to maintain the status quo, and refuse to accept any harm that would bring about a greater good. Most of us don’t want to invest in preventing a problem that we have not personally experienced or witnessed through vivid data. We overly discount the future. We tend to maintain the status quo, and refuse to accept any harm that would bring about a greater good. Most of us don’t want to invest in preventing a problem that we have not personally experienced or witnessed through vivid data.

Organizational Roots Four critical information processing tasks. –Scan the environment and collect sufficient information regarding all significant threats. –Integrate and analyze information from multiple sources within the organization to produce insights that can be acted upon. –Respond in a timely manner and observe the results. –In the aftermath, reflect on what happened and incorporate lessons-learned into the “institutional memory” of the organization to avoid repetition of past mistakes. Four critical information processing tasks. –Scan the environment and collect sufficient information regarding all significant threats. –Integrate and analyze information from multiple sources within the organization to produce insights that can be acted upon. –Respond in a timely manner and observe the results. –In the aftermath, reflect on what happened and incorporate lessons-learned into the “institutional memory” of the organization to avoid repetition of past mistakes.

Organizational Roots Scanning failures. –Selective attention. –Background noise. –Information overload. Integration failures. –Silos. –Secrecy. Scanning failures. –Selective attention. –Background noise. –Information overload. Integration failures. –Silos. –Secrecy.

Organizational Roots Incentive failures. –Collective action problems. –Conflicts of interest. –Illusory consensus. Incentive failures. –Collective action problems. –Conflicts of interest. –Illusory consensus.

Organizational Roots Learning failures. –Organizational learning disabilities (explicit versus tacit knowledge; individual versus relational knowledge). –Memory loss. Learning failures. –Organizational learning disabilities (explicit versus tacit knowledge; individual versus relational knowledge). –Memory loss.

Political Roots Special interest groups. Political action committees. Campaign funding. Special interest groups. Political action committees. Campaign funding.

Hurricane Katrina Knowing the problem existed. –U.S. GAO, 1976, –New Orleans Times Picayune June 23-27,2002. –Civil Engineering Magazine, –National Geographic October –FEMA, Allbaugh, three most likely disasters (New Orleans, California, New York), –FEMA, Hurricane Pam simulation, Knowing the problem existed. –U.S. GAO, 1976, –New Orleans Times Picayune June 23-27,2002. –Civil Engineering Magazine, –National Geographic October –FEMA, Allbaugh, three most likely disasters (New Orleans, California, New York), –FEMA, Hurricane Pam simulation, 2004.

Hurricane Katrina Problem getting worse over time. –Numerous articles on the destruction of Louisiana wetlands. Problem getting worse over time. –Numerous articles on the destruction of Louisiana wetlands.

Hurricane Katrina High current costs, delayed benefits. –$2 billion to complete, $1 billion to upgrade to Category 4 or 5, 30 years. High current costs, delayed benefits. –$2 billion to complete, $1 billion to upgrade to Category 4 or 5, 30 years.

Hurricane Katrina Certain costs, uncertain larger rewards. –Emergency management traditionally suffers from discounting future events. Certain costs, uncertain larger rewards. –Emergency management traditionally suffers from discounting future events.

Hurricane Katrina Maintain status quo. –Incremental changes in New Orleans levee system brought on by individual disasters. Maintain status quo. –Incremental changes in New Orleans levee system brought on by individual disasters.

Hurricane Katrina Subversion by vocal minority. –Dominance of homeland security over emergency preparedness. –Corruption in Louisiana. –Mississippi casinos and anti-gambling lobbying. Subversion by vocal minority. –Dominance of homeland security over emergency preparedness. –Corruption in Louisiana. –Mississippi casinos and anti-gambling lobbying.

Preventing Predictable Surprises Recognition. –Measurement system redesign. –Intelligence network building. –Scenario planning. –Disciplined learning processes. Recognition. –Measurement system redesign. –Intelligence network building. –Scenario planning. –Disciplined learning processes.

Preventing Predictable Surprises Prioritization. –Structuring dialogue. –Decision analysis. –Incentive system redesign. Prioritization. –Structuring dialogue. –Decision analysis. –Incentive system redesign.

Preventing Predictable Surprises Mobilization. –Persuasive communication. –Coalition building. –Structured problem-solving. –Crisis-response organization. Mobilization. –Persuasive communication. –Coalition building. –Structured problem-solving. –Crisis-response organization.

Preventing Predictable Surprises: Catastrophic Disasters A representative set of natural and manmade disaster scenarios. A flexible set of response modules to deal with expected scenarios or combinations of scenarios. A representative set of natural and manmade disaster scenarios. A flexible set of response modules to deal with expected scenarios or combinations of scenarios.

Preventing Predictable Surprises: Catastrophic Disasters A plan that matches response modules to scenarios. A designated chain of command. Preset activation protocols. A plan that matches response modules to scenarios. A designated chain of command. Preset activation protocols.

Preventing Predictable Surprises: Catastrophic Disasters A command post and backup. Clear communication channels. Backup resources. Regular simulation exercises. Disciplined post-crisis review. A command post and backup. Clear communication channels. Backup resources. Regular simulation exercises. Disciplined post-crisis review.