Tuesday, April 20, 2010

The Tyranny of Expertise in the Ashcloud Crisis

Crisis management is, by definition, exceedingly difficult. The continuing aviation crisis in Europe caused by the volcanic ash-cloud from Iceland is no exception. Initial assertions made by airlines following uneventful weekend test flights that the blanket restrictions on air travel were draconian have been followed by less self-interested questions about the basis in science for regulators' decisions.

Two pieces in today's Financial Times sketch out some of the issues:


Claims and counter-claims about the appropriate levels of caution and the uncertainty of risk are obviously not easy to resolve. Yet as many have pointed out, the five-day delay in scheduling European transport ministers for a videoconference is less about the complexities of decision-making than a failure of leadership. Even more telling has been the delay in questioning the science, both chemical and mathematical, used to generate risk models. This is not at all to suggest a repudiation of scientific factors in favor of, say, economic ones in deciding when to close or open skies to flight. Rather, it is to suggest that scientific models and explanations be managed critically -- that is, by the standards of evidence and logic of scientific inquiry itself -- before adopting them wholesale as the basis of standards or policy.

One of the great temptations of leadership is to succumb to what my colleague, Doug Guthrie, and I call "the tyranny of expertise" (we both teach at the Berlin School of Creative Leadership, where I sit today under brilliantly blue if still otherwise mostly empty German skies). Such tyranny exists when leaders defer uncritically or even unthinkingly to purported experts, including scientists but also economists, lawyers and others with specialized knowledge. In many cases, of course, these experts have much to offer and their insights are crucial. However, effective leadership requires that these insights and expertise serve as a means to an end, as in the case of policy-making, instead of an end in itself. Let us hope that European regulators begin to make more judicious use of the science of aviation and ash-clouds they have available and prove themselves better leaders.

Monday, April 19, 2010

Who Has the Power to Say: You Can Fly Again?

The question of standards for returning to safe flying, and ultimately which authority governs those standards, is being voiced in travel and business forums.

from Conde Nast Traveler

The New York Times

Telegraph (UK)

A knotty set of issues, to be sure, but also one about leadership and the political will to recognize how twenty-first century global air travel can't necessarily be managed through antiquated, territorial and finally nation-based forms of governance.

Comparing Airline and Banking Crisis Regulation

The Icelandic volcanic ash cloud has caused a global crisis in aviation. I’m currently in northern Europe, where reactions to the continental shutdown of flights have ranged from the whimsical to the anxious to the furious. On a very basic level, the perfectly cloudless sky over Berlin throughout the weekend has led to a sense of bemusement. Not least because of that invisibility of the ash cloud threat, it is difficult not to wonder about what acceptable level of safety, say, of particles in the air, will allow planes to return to normal flight schedules.

The question of standards, or requirements for opening airspace and resuming air travel, is of course the one being raised by carriers who conducted a few test flights without incident over the weekend. While presumably motivated by their financial interest in returning to the air, it would be unfair to allege that this is their only interest; safety remains a central value to their successful operation (if only, for the cynics, for their sustainable financial success). We have all heard about the few tragic or near tragic incidents that have occurred over the last three decades and demonstrated the dangerous potential effect of airborne ash on jet planes. Yet the scientific standards for understanding these potential effects remain largely theoretical and speculative. Despite this lack of more empirical evidence, the response of aviation authorities has been thoroughgoing and unequivocal: airspace has been closed to commercial flights in most European countries.

Compare this to the regulatory response to the banking and fiscal crisis beginning in late 2008 and continuing today, if now mostly in terms of determining what frameworks (if any) should exist within or across nations to govern trading. Obviously there are many, many differences. Among the most obvious is the difference between the physical risk of flying a plane that may crash and the financial risk that may ruin portfolios or lifelong investments but leave individuals alive and physically uninjured.

Yet the question of standards, murky in both cases, has elicited very different responses: in aviation, a shutdown; in banking, even in the darkest days of 2008 or 2009, few constraints, certainly not uniform across borders, were imposed on trading, say of CDOs or derivatives, by large banks. Even more, what also matters here is how governments or regulators are able to intervene in business operations, presumably, in the public interest, seem very different. I’m not necessarily advocating a greater or lesser level of governance or oversight of either industry. But together the two crises should prompt a discussion of how twenty-first century governments and regulators act (or don’t) in the public and corporate interests.