The Big Short

Predicting Surprises

~ americanjulie ~ Leave a comment

jack popped

My colleague recommended reading Predictable Surprises, a book by Max H. Bazerman and Michael D. Watkins, and then it was discussed in the Human-Centered Design course. And finally another colleague learned about it in his management short course at Harvard. So I read the book.

Predictable surprises are disasters you should have seen coming–events or a set of events that take an individual or group by surprise, despite prior awareness of all the information necessary to anticipate the events and their consequences. (p 1)

The book focuses on three themes: cognitive failures, organizational failures, and political failures. There are 6 general characteristics to predictable surprises:

  1. Leaders know a problem existed and that the problem would not solve itself.
  2. Predictable surprises can be expected when organization members recognize that a problem is getting worse over time.
  3. Fixing the problem would incur significant costs in the present, while the benefits of action would be delayed.
  4. Addressing the predictable surprise typically requires incurring costs, while the reward is avoiding a cost that is uncertain but likely to be much larger. And perhaps more importantly, leaders know they can expect little credit for preventing them.
  5. Decision makers, organizations and nations often fail to prepare for predictable surprises because of the natural tendency to maintain the status quo.
  6. A small, vocal minority benefits from inaction and is motivated to subvert the actions of leaders for their own private benefit.

jack in the box popped

I can think of many predictable surprises that challenges me as a leader and our society at large. Working on Delta solutions is a case study in predictable surprises. They offer up examples such as Hurricane Katrina and the aftermath. They also mention the meltdown of the financial system in 2007-8. If you want to skip reading the book, then please go see The Big Short. This movie does a terrific job of explaining what happened. Just do not believe the hype–it is a tragedy not a comedy.

If you are involved in trying to solve a problem such as climate change or even something narrower such as leading a change initiative in a company, I recommend Predictable Surprises.

The book does not offer many solutions to avoiding predictable surprises–although recognizing them is a management advantage. My conclusion is that it is another strong reason to create and actively maintain a risk register and to make managing risk a discipline.

 

Responsible Communication: Choosing Our Words

~ americanjulie ~ Leave a comment

Our choices make up the sum of our leadership. A mature person realizes they are always “in choice.” This includes responsible speech.

Snarky business owner's sign.
Snarky business owner’s sign at the AMGEN Tour of California 2015 City of Lodi finish.

There is much confusion about free speech in the USA, especially during this election cycle, what with money being called speech and lies that would have ended campaigns drawing nothing but headlines. Leaders usually are held to a higher standard than the entitlement to say whatever they like. Leaders exercise responsibility when they act and are careful with their words. Oh where are the leaders today?

Marilyn Chandler McEntyre’s thesis in her excellent book, Caring for Words in a Culture of Lies, is “if language is to retain its power to nourish and sustain our common life, we have to care for it in something like the way good farmers care for the soil.” (p 3) Years of hyperbolic advertising, yellow journalism, misrepresentations in political speech and fraud in business has depleted and polluted the English language. As English is the dominant language of the internet (80% of information is in English) and business, it is urgent to address the decline in literacy and commitment to truth.

She makes the case that to be good stewards of our language we need to do three things: 1) deepen and sharpen our reading skills; 2) cultivate habits of speaking and listening that foster precision and clarity; and 3) practice poesis–be makers and doers of the word. (p 9-10)

McEntyre gives 12 strategies to steward the English language:

  1. Love words.
  2. Tell the truth.
  3. Don’t tolerate lies.
  4. Read well.
  5. Stay in conversation.
  6. Share stories.
  7. Love the long sentence.
  8. Practice poetry.
  9. Attend to translation.
  10. Play.
  11. Pray.
  12. Cherish silence.

It has inspired me to make my word for the year: truth. I intend to focus on reducing my own tendency to hyperbolic enthusiasm, to take a Great Course on crafting better sentences, and to memorize poetry. It is a start.

There is an urgency that I hope you share with me. I just watched The Big Short at the movie theater. It can only be described as a comedy if you like black humor. High levels of deceit (and greed) in the world’s banking system led to a complete meltdown in 2008. The complicity of the regulatory and government agencies resulted in no one being held accountable and nothing enacted to avoid a repetition of the same calamity. The stakes are high on so many fronts.