High-Stakes Decision Making: The Lessons of Mount Everest

Below I have copied an article that was written by Harvard Business School professor, Micheal A. Roberto on how the disaster on Mount Everest in May of 1996 relates to leadership and decision making. That day, twenty-three climbers reached the summit. Thirteen of them, however, did not survive the descent. Two of these, Rob Hall and Scott Fischer, were extremely skilled team leaders with much experience on Everest.

Newspaper and magazine articles and books—most famously, Jon Krakauer's Into Thin Air, have attempted to explain how events got so out of control that particular day. Several explanations compete: human error, weather, all the dangers inherent in human beings pitting themselves against the world's most forbidding peak.
A single cause of the 1996 tragedy may never be known. But perhaps the events that day hold lessons, some of them for business managers. Roberto's new working paper describes how.

Here follows an excerpt from "Lessons From Everest: The Interaction of Cognitive Bias, Psychological Safety, and System Complexity."

Implications For Leaders
This multi-lens analysis of the Everest case provides a framework for understanding, diagnosing, and preventing serious failures in many types of organizations. However, it also has important implications for how leaders can shape and direct the processes through which their organizations make and implement high-stakes decisions. The Everest analysis suggests that leaders must pay close attention to how they balance competing pressures in their organizations, and how their words and actions shape the perceptions and beliefs of organization members. In addition, the case provides insight regarding how firms approach learning from past failures.

Balancing Competing Forces
The Everest case suggests that leaders need to engage in a delicate balancing act with regard to nurturing confidence, dissent, and commitment within their organizations. First, executives must strike a balance between overconfidence on the one hand and insufficient confidence on the other. Leaders must act decisively when faced with challenges, and they must inspire others to do so as well. A lack of confidence can enhance anticipatory regret, or the apprehension that individuals often experience prior to making a decision. High levels of anticipatory regret can lead to indecision and costly delays. This anxiety can be particularly problematic for executives in fast-moving industries. Successful management teams in turbulent industries develop certain practices to cope with this anxiety. For instance, some leaders develop the confidence to act decisively in the face of considerable ambiguity by seeking the advice of one or more "expert counselors," i.e. highly experienced executives who can serve as a confidante and a sounding board for various ideas. Naturally, too much confidence can become dangerous as well, as the Everest case clearly demonstrates. To combat overconfidence, leaders must seek out information that disconfirms their existing views, and they should discourage subordinates from hiding bad news. Leaders also must take great care to separate facts from assumptions, and they must encourage everyone to test critical assumptions vigorously to root out overly optimistic projections.

Fostering constructive dissent poses another challenge for managers. As we see in the Everest case, insufficient debate among team members can diminish the extent to which plans and proposals undergo critical evaluation. Flawed ideas remain unchallenged, and creative alternatives are not generated. On the other hand, when leaders arrive at a final decision, they need everyone to accept the outcome and support its implementation. They cannot allow continued dissension to disrupt the effort to turn that decision into action. As Cyrus the Great once said, leaders must balance the need for "diversity in counsel, unity in command." To accomplish this, leaders must insure that each participant has a fair and equal opportunity to voice their opinions during the decision process, and they must demonstrate that they have considered those views carefully and genuinely. Moreover, they must clearly explain the rationale for their final decision, including why they chose to accept some input and advice while rejecting other suggestions. By doing so, leaders can encourage divergent thinking while building decision acceptance.

Finally, leaders must balance the need for strong buy-in against the danger of escalating commitment to a failing course of action over time. To implement effectively, managers must foster commitment by providing others with ample opportunities to participate in decision making, insuring that the process is fair and legitimate, and minimizing the level of interpersonal conflict that emerges during the deliberations. Without strong buy-in, they risk numerous delays including efforts to re-open the decision process after implementation is underway. However, leaders must be aware of the dangers of over-commitment to a flawed course of action, particularly after employees have expended a great deal of time, money, and effort. The ability to "cut your losses" remains a difficult challenge as well as a hallmark of courageous leadership. Simple awareness of the sunk cost trap will not prevent flawed decisions. Instead, leaders must be vigilant about asking tough questions such as: What would another executive do if he assumed my position today with no prior history in this organization? Leaders also need to question themselves and others repeatedly about why they wish to make additional investments in a particular initiative. Managers should be extremely wary if they hear responses such as: "Well, we have put so much money into this already. We don't want to waste all of those resources." Finally, leaders can compare the benefits and costs of additional investments with several alternative uses of those resources. By encouraging the consideration of multiple options, leaders may help themselves and others recognize how over-commitment to an existing project may be preventing the organization from pursuing other promising opportunities.

Shaping Perceptions and Beliefs
The Everest case also demonstrates how leaders can shape the perceptions and beliefs of organization members, and thereby affect how these individuals will interact with one another and with their leaders in critical situations. Hall and Fischer made a number of seemingly minor choices about how the teams were structured that had an enormous impact on people's perceptions of their roles, status, and relationships with other climbers. Ultimately, these perceptions and beliefs constrained the way that people behaved when the groups encountered serious obstacles and dangers.

Leaders can shape the perceptions and beliefs of others in many ways. In some cases, the leaders' words or actions send a clear signal as to how they expect people to behave. For instance, Hall made it very clear that he did not wish to hear dissenting views while the expedition made the final push to the summit. Most leaders understand the power of these very direct commands or directives. However, this case also demonstrates that leaders shape the perceptions and beliefs of others through subtle signals, actions, and symbols. For example, the compensation differential among the guides shaped people's beliefs about their relative status in the expedition. It is hard to believe that the expedition leaders recognized that their compensation decisions would impact perceptions of status, and ultimately, the likelihood of constructive dissent within the expedition teams. Nevertheless, this relatively minor decision did send a strong signal to others in the organization. The lesson for managers is that they must recognize the symbolic power of their actions and the strength of the signals they send when they make decisions about the formation and structure of work teams in their organizations.

Learning From Failure
Often, when an organization suffers a terrible failure, others attempt to learn from the experience. Trying to avoid repeating the mistakes of the past seems like an admirable goal. Naturally, some observers attribute the poor performance of others to human error of one kind or another. They blame the firm's leaders for making critical mistakes, at times even going so far as to accuse them of ignorance, negligence, or indifference. Attributing failures to the flawed decisions of others has certain benefits for outside observers. In particular, it can become a convenient argument for those who have a desire to embark on a similar endeavor. By concluding that human error caused others to fail, ambitious and self-confident managers can convince themselves that they will learn from those mistakes and succeed where others did not.

This research demonstrates a more holistic approach to learning from large-scale organizational failures. It suggests that we cannot think about individual, group, and organizational levels of analysis in isolation. Instead, we need to examine how cognitive, interpersonal, and systemic forces interact to affect organizational processes and performance. System complexity, team structure and beliefs, and cognitive limitations are not alternative explanations for failures, but rather complementary and mutually reinforcing concepts.

Business executives and other leaders typically recognize that equifinality characterizes many situations. In other words, most leaders understand that there are many ways to arrive at the same outcome. Nevertheless, we have a natural tendency to blame other people for failures, rather than attributing the poor performance to external and contextual factors. We also tend to pit competing theories against one another in many cases, and try to argue that one explanation outperforms the others. The Everest case suggests that both of these approaches may lead to erroneous conclusions and reduce our capability to learn from experience. We need to recognize multiple factors that contribute to large-scale organizational failures, and to explore the linkages among the psychological and sociological forces involved at the individual, group, and organizational system level. In sum, all leaders would be well-served to recall Anatoli Boukreev's closing thoughts about the Everest tragedy: "To cite a specific cause would be to promote an omniscience that only gods, drunks, politicians, and dramatic writers can claim."

The Influence of a Blind Dude

So last week I'm on the phone with my blind buddy Erik (the guy I have guided all over the world) and he says to me..."let's do another adventure race."

To many this may seem like a benign invitation to go share a fun couple of days with a friend but I know better.

In 2003, Erik and I partnered up with a couple of experienced adventure racers (one of them, Rob Harsh is an amazing athlete living in Boulder) to try our hand at the sport. For those not familiar with adventure racing, a brief description: a whirlwind of mountain biking, climbing, rappelling, trail running, orienteering, white water paddling and suffering. The final activity in that list being the most worthy. Due to the fact that it is a 'race', there are time limits on every stage and if a team doesn't enter into the transition area within the allotted time, they are disqualified. This sense of urgency requires a lot of hustle and very little sleep.

We traveled to all the way to Greenland for our first race. Did OK on it...although we didn't finish which was a big blow. However, we did not let this get us down as our main objective was to be Primal Quest in the Sierra Madre mountains near Lake Tahoe.

Below is the report I put together following that race:

Rough Water Paddle

Glad that one's done. We started into the 457-mile race two Fridays ago (the 5th) on the shore of Lake Tahoe. I'll hit some of the highs and lows of the subsequent ten days as our team of four, plus a wonderful cast of extras finished what's being dubbed as the hardest adventure race ever on American soil. The first day took us paddling around the north shore of the lake on what was supposed to be a "flat water paddle." This became quite the misnomer as we turned the boat back south into the prevailing winds and encountered 15-20 mph gusts and three foot swells crashing over the bow of the boat. All four of us became somewhat uncomfortable, however Erik took the brunt of the pain riding in front of the boat...occasionally he would be submerged for a split second as a whitecap cascaded over him onto me. The carnage was starting to stack up as five of the 80 boats that started either capsized or sank. We limped onto shore about eight hours after setting off and could barely walk due to the stiffness that had set in several hours previous.

Kickbikes and Adventure?

The next leg was a 23 mile kickbike section...What's a kickbike you ask? It's like a fancy scooter. I was dreading this section due to the fact that there is absolutely no way to look cool while captaining a kickbike. In retrospect, I found the kickbiking to be the most enjoyable leg due to its simplicity and brevity. At midnight that evening we pulled into our first transition area where we were met by our support crew that fed and drank us for two hours before we saddled up the bikes and headed out on a 110 mile bike ride. As you can imagine, this is too long to be on any bike, much less a tandem mountain bike that carries a combined weight of around 380 lbs. The best part of this lengthy segment was the ridiculously sustained up hill nature of the ride. The 12,000 feet of elevation gain was constant and relentless. We were met by hill after hill until it became funny.

Seated on a tandem bike for 110 miles. . . ouch

The unfortunate thing about the tandem isn't necessarily the burden of weight; it's the fact that as the pilot, I was unable to get out of the saddle for any of the long ride which inflicts great pain and discomfort on the nether regions of one's body. My booty hurt...bad. We peddled through the night and at dawn laid down in the dirt to get our first hour and ½ of sleep of the race. The following evening, with only 10 miles left of this heinous biking leg, we made our first navigational error which dropped us down a valley trail...losing about 1,000 feet of elevation in the wrong direction.

Wrong Turn

It was 4 am before we, along with five other teams, realized our brutal mistake. The decision was made to lay down in the dirt, wrapped in our 'space blankets,' which are just over priced sheets of Mylar that seem to trap in a small fraction of your body's exothermic heat. I was fortunate enough to be so exhausted that I was able to sleep for two hours, spooned against Erik. I awoke at 6 am as the first rays of sun were lighting the sky and couldn't feel my right foot. My first thought was, "this is great...all these years in the mountains without any frostbite and here I am about to have a frostbitten right foot and lose some toes in a stupid adventure race...great." Within 90 seconds I was up and pushing that 30 pound tandem bike up the hill. Turns out we were only about 2 hours away from the warmth and hospitality of our boys in the next transition area. Bummer.

Salvation in the form of a Paddle

The days started to melt together...a 25 mile trek...a section of orienteering...back on the bikes for 50 miles...a 43 mile trek...a 700 foot free hanging rappel...then, onto a whitewater paddle. The whitewater section took us down the south fork of the American River, which was running quite large at the time with multiple 3+ rapids. A bit of divine intervention played out early on during the paddle. Within the first half hour, Rob broke his paddle on a rock. This didn't bode well, leaving four of us with three paddles and many miles of rapids followed by several miles of flat lake paddling ahead of us. As usual, we just sucked it up and switched paddles around to be efficient (gave Erik the broken one) and continued on. One minute later I spotted a perfectly brilliant paddle floating in a pool just a few feet away. We were whole again....thanks to the powers that be. I began to dread the night. With it came the notorious "sleep monster"...the nebulous creature that entered your mind and body while fighting sleep and tortured you with hallucinations and fatigue until you either fought through it, gave in, or the sun came up. The need for sleep was sometimes painful and I wanted it like I've never wanted anything in my life...the ease and comfort of deep sleep. I couldn't have it though....would let the team down...gotta fight through it...must ignore those damn gnomes, elves and goblins that run annoyingly across the path. This was the hardest part for me by far.

Not quite last...

Many other remarkable events played out over the next several days, too many to mention ...however, the most remarkable was when we crossed the finish line at 4:07 am on Sunday morning in 48th place out of 49 teams that finished the race. Ten days after starting. We were and continue to be filled with pride over what we did. I think the four of us, Cammy, Rob, Erik and I along with our support crew of Gavin and Ben were the only ones associated with the race that KNEW we would finish this grueling event. With a valiant display of teamwork, determination and perseverance, we showed 'em.

__________________________________________________________

After the suffering that I experienced on that race I swore I would never do any more racing. So, this is why I am still confused how I got duped into doing another race with Erik. I suppose because this is an exceptional race with an exceptional organization. The race is called the Real Deal Inclusive Sports Challenge, sponsored by World TEAM Sports. It will take place over the weekend of June 27-29 and will be aired on ABC Sports later in the year.

More details to come....as well as more suffering. I can't wait!