Surviving “The Next Catastrophe” by Reducing Vulnerabilities

If the renowned organizational sociologist Charles Perrow had a classic-rock theme song, it just might be “You Ain’t Seen Nothin’ Yet,” the 1974 hit song by Bachman Turner Overdrive. Let me explain.

In his classic book, Normal Accidents: Living with High-Risk Technologies, Perrow discussed the numerous high-risk technologies that pervade modern life and the dangers they pose for society. First published in 1984 with an updated version released in 1999, Normal Accidents presents an argument for the inevitability of large-scale disasters such as nuclear meltdowns, petrochemical-plant explosions, maritime accidents, and so forth. These accidents are inevitable, or “normal,” because they stem from systems that have specific structural characteristics. Namely, these systems are interactively complex, meaning that different parts of the system are likely to work together in ways that produce unanticipated consequences. Secondly, these systems exhibit tight coupling, meaning that a single change in one part of the system will directly lead to changes in other parts of the system.

This means that over time disasters will become increasingly likely. In other words, you ain’t seen nothin’ yet.

In his 2007 book The Next Catastrophe: Reducing our Vulnerabilities to Natural, Industrial, and Terrorist Disasters, Perrow builds upon the themes presented in Normal Accidents while suggesting a few approaches toward limiting the havoc that such normal accidents will inevitably wreak upon society. In so doing, he also points out three more sources of vulnerability beyond interactive complexity and tight coupling. These three sources are all in the form of high concentrations of the following:

1. Energy. In numerous locations around the United States, industrial storage facilities house vast quantities of explosive, toxic, and flammable substances. Because these storage facilities are concentrated in specific locations, an accident in any one of them would be much more disastrous than if storage occurred in smaller quantities at a greater number of separate sites.


2. People. High population densities in risky areas make disasters in those locales catastrophic. For example, New Orleans is a vulnerable city—due to its geography and its proximity to high-risk industry. The fact that it is also high in population density makes it particularly vulnerable.


3. Economic and political power. Perrow has a knack for drawing our attention to the role of power in organizations, and he argues here that mega-corporations and the political entities with which they interact wield so much power over very real aspects of our daily lives that any failure within them could pose serious risk. One example he cites is the pervasive nature of the Microsoft Windows operating system. If Windows failed—due to a massive computer virus, for example—catastrophic damage to business, government, and personal livelihood would likely result. Another example, although not addressed directly in the book, is the danger posed by financial institutions deemed “too big to fail” that we have witnessed in recent years.

To address these issues, Perrow argues that (a) government should implement wise regulations that limit these concentrations and (b) that leaders should focus on these concentrations as real threats instead of being distracted by other less-likely sources of disaster. In essence, he suggests that the focus should be on “shrinking the targets.” For example, Perrow argues that political interests have overestimated the terrorism threat in the United States while underestimating the threats posed by industrial forces, such as the nuclear power industry.

Overall, Perrow presents a number of examples that suggest the three areas of concentration listed above are indeed sources of vulnerability. His approach toward shrinking those targets, however, appears to focus mostly on policy decisions rather than aspects of human behavior within organizations.

As such, The Next Catastrophe provides an interesting view of disaster and vulnerability at a macro level. Much like “watchdog” groups that illuminate concerns within government agencies and programs, Perrow has been shining a light on the dark side of organizations, business, and government for decades. And his suggestions, when coupled with other viewpoints at the micro level, may provide a way for us to avoid the ominous theme of “you ain’t seen nothin’ yet” that underscores his theories.

The article also appears at Foster Excellence.

Maintaining Competitive Advantage Requires High-Reliability Organizing

A healthy dose of paranoia and an obsession with failure: That’s not typical leadership advice. But that’s part of what management guru Jim Collins discusses as a crucial ingredient for leaders hoping to maintain competitive advantage through crisis and adversity.

What he didn’t say, at least in the teaser to his new book featured in the May 25 issue of BusinessWeek, is how much we can learn about business resilience and leadership from “high-reliability organizations.”

High-reliability organizations (HROs) are those that face so much danger, complexity, and ambiguity on a daily basis that we’d expect them to fail very frequently—but they don’t. Typical examples of HROs include nuclear power plants, naval aircraft carriers, and emergency response agencies. For a variety of reasons, these organizations are able to continually cope with small errors and negotiate the ambiguity around them such that they avoid disaster.

Two of the most prominent thought leaders regarding what makes HROs special, Karl Weick and Kathleen Sutcliffe, described five specific principles that HROs embrace:

1. Preoccupation with failure
2. Reluctance to simplify
3. Sensitivity to operations
4. Commitment to resilience
5. Deference to expertise

As I’ve previously written, leadership along these principles is about creating a culture that seeks errors, questions assumptions, and makes sense of circumstances through respectful interpersonal communication. It’s not about always being positive, and it’s certainly not about always saying what other people want to hear.

This notion of leadership differs from much of leadership thought—both in academic and managerial circles—that focuses on leaders as heroic men and women who gallop around organizations on white horses, dream about possibilities, and inspire followers to march along toward greatness. I’m exaggerating for illustrative purposes, of course, but my point is that we can learn from the tough, questioning, interactive model of leadership suggested by HROs.

A common critique of using HROs as a model for leading business organizations through crisis and adversity is that HROs are simply too different from the private, for-profit sector to offer any worthwhile lessons. The research that Collins described, however, suggests otherwise. For example, he suggested that organizations encounter five stages of decline: (a) hubris born of success, (b) undisciplined pursuit of more, (c) denial of risk and peril, (d) grasping for salvation and (e) capitulation to irrelevance or death.

Discussing the dangerous nature of success, Collins wrote, “The best leaders we’ve studied never presume they’ve reached ultimate understanding of all the factors that brought them success. For one thing, they retain a somewhat irrational fear that perhaps their success stems in large part from fortuitous circumstance.” Therefore, it seems that leaders who preoccupy themselves with failure are also those best poised to maintain success.

Additionally, Collins suggests that teams “on the way up” have specific patterns of interaction that allow them to maintain their organizations’ resilience and competitive advantage. These dynamics include:

1. Rewarding those who highlight “grim facts"
2. Leading by asking questions
3. Crediting others for success
4. Arguing and debating to help the organization overall
5. Learning from past mistakes

Therefore, it seems as though Collins is suggesting a way for organizations and their leaders to succeed that has much in common from what we’ve learned from HROs. Or, as I’ve suggested, what we can infer is that maintaining competitive advantage requires high-reliability organizing.

Collins’ new book, How the Mighty Fall and Why Some Companies Never Give in, probably offers numerous other ways in which business organizations can become more resilient and ways in which leaders can effectively lead during crises. All I’m saying is that those principles have much in common with what we’ve already learned from HROs. Namely, Collins’ research strongly suggests that we can apply lessons learned in HROs—be they combat teams, nuclear power plants, or flight-deck operators—to the realm of business, providing distinct ways for leaders in organizations to avoid the disastrous consequences of failure.

The article also appears at Foster Excellence.

Jindal’s Emergency Response

As previously discussed, leaders’ communication during crises may make a significant difference in how they enable or hinder emergency response. According to a Sept. 7 article in the New Orleans Times-Picayune, Louisiana Governor Bobby Jindal responded effectively to the threat of Hurricane Gustav by focusing on continually measuring preparation progress while reducing barriers to response efforts. He did this, at least in part, through communication with the public and other constituents.

The true test of emergency readiness in Louisiana and the rest of the Gulf Coast, however, may come in the weeks and months ahead. The official Atlantic hurricane season lasts until Nov. 30, leaving the potential for future evacuations and many other demands upon leaders. Furthermore, what impact does the fact that Gustav was less severe than anticipated have on future evacuation efforts and responses?

One possibility may be that people will be less likely to act with as much of a sense of urgency during future crises. Many heeded leaders’ warnings regarding Gustav, but will that followership continue? Interestingly, the Times-Picayune reported today that Gov. Jindal does not foresee an evacuation order regarding incoming Hurricane Ike.

This highlights an important dilemma for leaders considering to order evacuations and carry out other disaster preparations. Leaders want to prepare their communities, but they also need to maintain their followers’ trust that they will only sound the alarm when it is really needed. Only then will people follow and respond when disaster strikes. This, too, emphasizes the delicate yet vital nature of communication in crisis leadership.

Leaders, Communities Brace for Gustav’s Landfall

To many along the United States’ Gulf Coast, it must seem like déjà vu. Almost three years ago to the day, Hurricane Katrina slammed into the coastlines of Louisiana and Mississippi, resulting in the loss of more than 1,800 lives and $80 billion in property damage. Now, Hurricane Gustav is set to make landfall near New Orleans tomorrow afternoon. And thousands of that city’s residents are evacuating, heeding a mandatory order to do so.

We all hope, of course, that Gustav’s impact will be less severe than expected and that preparedness efforts will reflect lessons learned painfully during and after Katrina. That remains to be seen, but it’s certain that people will critically compare crisis leadership efforts during the next few days with actions taken three years ago.

One theory of leadership, complexity leadership theory, seems particularly appropriate for discussing leadership during crises. The theory builds upon the idea that organizations are complex adaptive systems in which change is continual and organizational members continuously affect structures within the system through interaction and the process of sensemaking. This is an overly simplistic explanation, but the most relevant point here is that leaders within this theoretical framework act as enablers rather than controllers, and they manage words more so than they manage people.

With that in mind, it will be interesting to see how leaders respond to Hurricane Gustav—how they enable or hinder preparation and response efforts, and how they communicate with their many constituents. In the meantime, we hope for the best while bracing for the worst.

Leading Toward Preparedness

According to a recent report by New York University’s Center for Catastrophe Preparedness and Response and The Public Entity Risk Institute, crisis preparedness remains low within many organizations throughout the United States.

As the report mentions, future crises will most likely only increase in frequency and complexity. Technological advances, globalization, and continually greater inter-organizational dependence result in a society where what affects one organization will most likely affect others. So when disaster strikes, leaders will need to become ever cognizant of how rapidly changing environments may affect them. For example, hurricanes could disrupt a corporation’s supply chain, which in turn could adversely affect its workers and customers.

It is surprising—and alarming—that organizations continue to operate without enough attention to how their leaders should address crises. Perhaps the problem lies in the fact that some organizations may treat crisis leadership as a segmented organizational function, for example, making it the sole responsibility of the business continuity planning department. But history and research are beginning to show that crisis preparation may be most effective when addressed in a holistic, systemic, and ongoing fashion—not when it is relegated to another set of checklists and conference-room meetings.

Access the full report here.

Lessons Learned from the Fire

Just over a month after a massive lightening storm ignited more than 2,000 fires throughout northern California fire officials recently announced that 98% of the fires have been contained. Still fire officials warned that fire danger remains high throughout the state.

David Balwin, an adjunct at the San Diego campus of the Center for Creative Leadership, knows first hand what some of the residents of northern California have been facing this past month as fires threatened their homes. He and his wife were among the residents endangered by the 2007 Southern California wild fires that destroyed 1,500 homes and over 500,000 acres.

“As my wife and I hunkered down in our home with windows shut tight, we tuned in to the television for ongoing live footage of houses being burned to the ground. But, every few hours the mayor of San Diego would have a communication press conference and facilitated key leaders from the police, fire, national forest service, helicopter pilots, etc. This communication proved essential especially for my wife who has only been in the San Diego area for a couple years,” said Baldwin.

Fortunately their home survived the fires and one of the key lessons David and his wife learned from their experience was the importance of relying on others is times of crisis.

The Baldwin’s insights echoes much of what the General Honoré who was lauded for shaking New Orleans out of a daze after hurricane Katrina struck observed during the height of the Katrina crisis--- the need to have a “culture of preparedness” where people have a natural civic response to helping others in times of crisis.

According to Honoré, the greatest and largely unlearned lesson of Katrina, Honoré was that despite investments and improvements in federal and state disaster response, civic response remained weak.

"I'm sure you and your wife have a plan to meet at Uncle Joe's house, but does your plan include asking Mrs. Smith next door if she needs a ride?" he says. "We saw a lot of Mrs. Smiths in New Orleans," said Honoré.

Another lesson the Baldwins learned from their experience was to have a plan in place in the event of future disasters. “The crisis made us reflect on what are the key personal items we need to have prepared and ready to evacuate with in our hands. Additionally, we purchased a fire safe as our perspective changed from living in a sense of stability to having an evacuation plan in place,” stated Baldwin.

The need to think ahead is articulated in the book “The Unthinkable: Who Survives When Disaster Strikes — and Why” and reviewed in The New York Times. The Time's piece states:

"There are ways to prepare for more common threats like fires, floods and other emergencies. Take part in evacuation drills at work and at home. Make a habit of changing batteries in your smoke detector on a schedule, like the first of the month or every time you change the nearest light bulb. And get to know your neighbors, who can be a valuable resource in emergencies."

The Times and the author offer a "disaster IQ" quiz online:

How Prepared Are You if Disaster Strikes?