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When do You Need a Cowboy Reserve? The Cases of General Motors and Malaysian Airlines

I got to thinking about all this recently, what first with the unhappy event on MH370, and then the ignition lock saga at General Motors. Both were crises, in their own particular way. And both were badly handled.

The question that arises for me is: how can smart leaders in good companies and organizations make such a massive screw-up of a crisis event? Is there something about crises that confounds normal leadership disciplines or is there something deeper going on?

I don’t blame Malaysian for the actual event. Unfortunately bad things happen to good people and companies. But their handling of the crisis was terrible. The irony is that Malaysians’ biggest critic, the Chinese government; itself totally messed up its own crisis with the Sichuan earthquake in 2008. And the Chinese government had an almost infinitely greater level for sources to apply to the problem than tiny Malaysian Airlines in, comparatively speaking, tiny little Malaysia. So we can see that in government, bad crisis management isn’t just caused by lack of resources.

Same thing with General Motors. It can’t be accused of being low on resources either but it still messed up big-time, over many years. This is something I kind of predicted in my blog post on Mary Barra’s ascension a few months ago. OK so the original problem was not caused by Mary Barra herself. But the culture she was an intimate part of was the problem and had the Feds not finally zeroed in on things, the crisis would have continued, just beneath the surface, to a possibly even worse outcome.

And what about the Feds “safety” people in the NHTSA? They haven’t exactly covered themselves in glory either in the whole sorry mess. They actually saw and passed on the crisis many years ago and then reviewed it several other times and, each time, backed off again.

So it’s clear that even the US government can mess up crises, repeatedly. How about its sorry response to Katrina? Or, even more sadly, Benghazi? And not just the Feds. The same thing for the Louisiana State Government and New Orleans city (whose former Mayor, the infamous Ray Nagin, was recently convicted of corruption).

And big companies have no shortage of examples. How about Exxon and the Exxon Valdez? Or BHP with the oil spill in 2010?

So I think I have provided enough ammunition here to suggest that terrible handling of crisis events in pretty routine and occurs in the largest and apparently smartest and highly-resourced organizations in the world, be they public or private, and no matter their area of industry.

What is the reason that organizations employing the smartest people in the world, with the highest level of expert resources, and undoubtedly high levels of contingency planning, still routinely mess up crises?

As it happens I don’t think you have to go very far. It’s all to do with the behaviors that are favored by large and successful organizations and by the behaviors that they routinely disfavor and eventually get rid of.

The larger the organization, the more you need careful and extensive planning. This requires methodical people who possess great attention to detail. Their behaviors are well-known. They don’t act precipitately or, usually, even quickly. They naturally prefer to wait and consult, or not to, before taking action. They are leery of how people see their actions and particularly the possible consequences from them. They are careful, clinical, painstaking, and generally very slow, sometimes even lethargic.

In the framework of the Leadership Cockpit® developed by my company, we call these types of people and behaviors, either Battalion Commanders and (yes, it’s not a typo) Kibbutzniks. These types of people are fast, often shoot first, and ask questions later. Many people would call them cowboys. They often make mistakes because of their impatience and speed. Politically they are often disasters.

But Battalion Commanders and Kibbutzniks are bold and decisive. They are tailor-made for crises because they take action immediately. Rudolf Giuliani comes to mind. Or Winston Churchill. Maybe Ronald Reagan. You get the idea.

However large organizations hate cowboys, and not unreasonably. So they systematically weed them out. So the vast majority of large organizations don’t have many or even any cowboys. It’s probably worse in government because of the level of politicization and the even-more confining regulatory environment they must perforce inhabit.

This is another way of saying that the vast majority of large organizations, no matter how what their level of resources or comprehensiveness of their contingency planning, are probably going to be bad at crisis management. General Motors hasn’t had to fight any wars and when it does and fails, it gets bailed out by the government.

Malaysian Airlines has run a good ship at the level of operational management but it’s hardly a bellwether for anything. A combination of its own big company culture coupled with Asian culture generally – c.f. the well-known cockpit command problem in Asia for example in Korean Airlines – without doubt led to it not just not having a contingency plan, but definitely no cowboys either. Since it was the results of this culture who were handling the crisis, the management was predictably terrible. We could go on.

Sometimes the cowboys you need just happen to be standing around, ready for the call, like Winston Churchill. Much more often they are not since large organizations have hidden blinders that ensure that they cannot recognize the crisis managers they need, especially once they are actually in the middle of one, which blinds even the clearest-thinking people anyway.

Can you do anything about this? Yes. But it takes guts. You need to establish a formal reserve of cowboys, ready to be called on at immediate notice when they are required. We can call it a Cowboy Reserve. You build it in good times, but probably you need to keep its existence secret otherwise the politically correct leaders will quickly eliminate it.

How do you find them? You can use formal assessments, like ours (see here). Or there are other types of leadership assessments that can identify somewhat similar behaviors (although they don’t show the business outcomes, while ours do).

This is not to say that comprehensive crisis planning can’t improve things. It can. But what happens if you put a bureaucrat into a role where he has to manage an existential crisis? Probably little or nothing.

Bad crisis management is usually a result of culture, not the level of resources or planning. You can improve things immensely if you choose people with the right behaviors and then salt their existence away, ready to be used when needed.

But if you don’t, expect the next major crisis to be badly handled again. To ignore history ti to repeat it.

 

 

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Friday, 10 July 2020

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