How to be a good captain in the public sector

This article is written by Martin Stanley, editor of the Understanding Government websites, and former UK civil servant.

In my previous two articles, I explained how big organisations fail and why they seem to snuff out dissent.

In this final article in a three-part series, I will turn to senior decision making.

The Prevention Paradox

Economist and journalist John Kay was the first person to compare the behaviour of some executives to that of Captain MacWhirr in Joseph Conrad's 1902 classic, Typhoon. In Conrad’s story, Captain MacWhirr chose to sail straight through a devastating storm because he recognised that his employers would criticise him for delaying their cargo if he sought to sail round it.

"Suppose", he says, "I went swinging off my course and came in two days late, and they asked me 'where have you been?' 'Went round to dodge the bad weather,' I would say. 'It must have been dam' bad, they would say. 'Don't know,' I would have to say, 'I've dodged clear of it.'"

The Prevention Paradox isn’t confined to the private sector — it’s just as common in government

Modern executives mimic MacWhirr because company boards and stakeholders are very likely to criticise delay and expense, even if the organisation eventually achieves its objective. Executives, therefore, prefer to take uncertain and dangerous risks rather than face certain (unjustified) criticism.

There was a classic example in late December 2012 when Shell chose to tow the Arctic drilling rig Kulluk through treacherous waters all the way from Alaska to Seattle in the middle of winter, at least in part to ensure that they avoided a $6m Alaskan tax charge which would otherwise have fallen due on 1 January. The tow ropes eventually parted, the rig went aground, and it then had to be written off, costing Shell around $200m.

It is too soon to know for sure, but the Captain of the cruise ship Viking Sky may have been emulating Captain MacWhirr when he set sail down the Norwegian coast in March 2019, imperilling the lives of 900 passengers and 400 crew. An intense storm had been forecast, and the Captain chose a course close to the coast and through Hustadvika, considered one of the most dangerous parts of the Norwegian coast, and notorious for its rough seas as there are no outlying islands which might take the brunt of strong winds. The turbulence of the seas and low engine lubrication levels caused the engines to cut out, leaving the ship in grave danger of joining many others in this ships' graveyard. Many elderly passengers had to be lifted off by helicopter before the seas calmed down enough for the engines to restart.

Other examples can be found in my previous article where I highlighted how a dearth of dissenting opinions among leading bankers precipitated the 2008 financial crisis.

But the Prevention Paradox isn’t confined to the private sector — it’s just as common in government. As US Congressman Barney Frank said, when he commented on the government’s dilemma of whether they should bail out the big banks at the height of the financial crisis: "The problem in politics is this: You don't get any credit for disaster averted ... Going to the voters and saying, 'Boy, things really suck, but you know what? If it wasn't for me, they would suck even worse.' That is not a platform on which anybody has ever gotten elected in the history of the world."

The Harvard Business Review has even suggested that many governments reacted too slowly to the threat of Covid-19 because they feared MacWhirr-style criticism:

The most effective time to take strong action is extremely early, when the threat appears to be small — or even before there are any cases. But if the intervention actually works, it will appear in retrospect as if the strong actions were an overreaction. This is a game many politicians don’t want to play.

Going against the current

It might seem like we’re all destined to repeat yesterday’s mistakes over and over again.

But there are some interesting examples of individuals and organisations who refuse to succumb to the Prevention Paradox, even though they were bound to be criticised for averting the likely disaster.

• Various governments and most businesses were, for instance, to be congratulated for taking action to near-eliminate the Y2K “Millennium Bug”. Subsequent evaluation has shown that the effort was very worthwhile. But some bugs got through. It was reported in 2018 that the Swedish Unemployment Agency had recently encountered one when the first people born in 2000 applied for benefits. Nevertheless, the public and media reaction was that it had all been a waste of time and money because so few examples of the bug were discovered on 1 January 2000. This is a classic example of commentators not realising that disaster might well have ensued had no avoiding action been taken.
• Another good naval example was Lord Jellicoe's caution throughout World War I, and in particular in the Battle of Jutland in 1916. It was the largest naval battle of the war, and the English navy — the most powerful fleet in the world at the time — could have struck a lethal blow to their German counterparts. But Lord Jellicoe also knew that he could have lost the war if the encounter with the German fleet led to defeat. But his failure to take unnecessary risks was much criticised, especially by the British press.

It requires courage, of course, to face personal criticism when it may be difficult to show that, if it weren’t for you “things would suck even worse”. So think hard about how you will defend your decision. Have you retained the analysis and evidence on which you are relying? And have you identified colleagues and experts who will support you?

Executives' Behaviour

Senior decision making can go disastrously wrong even if (or indeed because) the decision-makers are not sufficiently concerned about criticism. Senior executives, senior partners, or captains like MacWhirr, hospital consultants etc. are so powerful that they easily become isolated from ordinary people, and even more so from their front-line staff and their concerns.

The Prevention Paradox and executive arrogance are serious problems in industries where human error and misjudgement can have devastating effects

Some of these senior executives overcome this challenge better than others. In the health and transport sectors, tools like Crew Resource Management, mandatory protocols and generational change are making a big difference. But many top executives still have too much confidence in their own judgement and opinions, while the scale of their operations or responsibilities mean that they have to think in abstract terms where risks, and even death rates, become mere numbers that have to be managed. This can easily cause whole management teams to characterise anyone as naive or unworldly — and in particular a whistleblower or journalist — who raises red flags and concerns about organisational culture. It can be worse if an organisation is highly focused on the power and influence of a single individual, often someone with a heroic leadership style. Their direct reports then spend all their time trying to second guess their hero's wishes, rather than think for themselves or commission analysis which might challenge their leader's views. This was certainly a problem at the Japanese tech company Toshiba where investigations into a huge accounting scandal found "a corporate culture where it was impossible to go against one's bosses' wishes".

Lessons for Policy-Makers

The Prevention Paradox and executive arrogance are serious problems in industries where human error and misjudgement can have devastating effects. The relevant policymakers and regulators must, therefore, take particular care to enforce strong safety protocols such as Crew Resource Management or its equivalent and to encourage whistleblowing.

More generally, industry leaders, and those interfacing with such leaders, should be encouraged to learn from experience rather than to think that “that couldn't happen to me”. Too many disasters provide tragic examples of failure to learn from previous incidents. And the Institute for Government has reported the frequent failure of British officialdom even to implement the recommendations of formal public inquiries. — Martin Stanley

Further reading:

This and related subjects are discussed in more detail on the Understanding Policy Making and Understanding Regulation websites.

The hospital example, above, is from Rachel Clarke's book Your Life in My Hands.

(Picture credit: Unsplash)