By Joe Phelwane
There is little difference between a CEO facing crisis and a pilot in crisis.
Like pilots, if CEOs don’t lead effectively in moments of disruptions the results can be catastrophic.
C-suite executives, CEOs in particular - just like captains of flights - are expected to be the most qualified persons to make decisions when faced with monumental disruptions which can lead to uncertainty, during and after the decision-making process.
What makes aeroplanes crash is the same thing that makes companies “crash”. It is disruptions to normal operations albeit of different magnitudes. By definition, a crisis is an abnormal event, something that happens against the expectations and the will of the CEO.
Yet in today’s volatile and turbulent world, the frequency of such events is increasing exponentially. Every 21st century CEO will face many crises during his or her tenure and being human like pilots are, there is inherent human factors challenges to be encountered. Eighty percent of airplane crashes are as a result of human error and the same applies for any company “crash”.
The CEO therefore has a challenge at hand. Spain’s University of Navara research paper quoting Frederickson et al, notes that “poor firm performance explains less than half the variance in CEO dismissals and CEO turnover”.
This means that 50% of CEO failures is as a result of other non- technical factors. However, but these factors have a direct bearing on the performance of a CEO.
According to Dotlich and Cairo, “CEO failure is also attributable to human behavior”, what the CEO is like and how their behavior is like in certain circumstances as professor Ram Charan says.
This brings the element of human factors in to question whenever executives have to make decisions. How can CEOs improve probabilities to make optimum decisions when time is not on their side, and faced with the element of human error? How does a highly competent CEO with required technical skills to execute in a high-pressured moment avoid making an erroneous decision he may live to regret?
In some cases, CEOs fail while the company is performing well, likewise with pilots, most accidents are not because the airplane is underperforming, the steel bird is mostly in peak performance state. It is pilot (human) error, a human factor issue that causes most performance failures in the cockpit.
Covid-19 and many crisis events has shown that C-suite executives need the quick decision-making skills and tools a pilot may have to utilize when faced with a potential catastrophic incident which may lead to an accident. Like pilots, CEOs must juggle a lot of inter-reliant decisions with critical outcomes. At times disruptions facing CEOs happen fast, randomly, and furiously. Time is always of the essence. A decision cycle model developed for airline pilots may offer CEOs and executives insights into making sound decisions quickly thus reducing the negative effect of human error.
A decision cycle model developed for airline pilots may offer CEOs and executives insights into making sound decisions quickly thus reducing the negative effect of human error. The decision-making tool is called FOReDEC.
FOReDEC is a mental decision making model developed in Germany and can be described in seven steps that constitute this decision making tool, Facts, Options, Risks/Rewards, Experience, Decision, Execute and Check..
It has been used in non-aviation industries including high risk industries as well as the the medial field as a decision making coaching tool for high performing executives.
as evidenced by professors Matthew Cain and Stephen McKeon’s research study that looked at 179 companies led by CEO’s who are pilots against 2 900 companies led by non pilot CEO’s. The research concluded that CEOs who are pilots outperformed non pilot CEO’s. These CEO’s directly and indirectly had many of the tool’s pilots use including FOReDEC to inspire them to eliminate the human error inherent in fifty percent of what makes CEO’s fail.
Every CEO, just like a pilot, must make a decision and live with the consequences. Having gathered facts, looked at options and risks and tapped into their experience which happen at a cognitive level, a decision must be taken.
Pilots spend their entire careers preparing for eventualities that very few of them experience, practising decision making for when serious and life-threatening disruptions occur, for CEO’s they happen more frequently and decisions don’t wait for perfect conditions before they demand to be taken.
Joe Phalwane is an award winning entrepreneur, leadership coach, professional speaker and aviation expert.
The Star