Predictable

Surprises :

The Disasters You

Should Have
Seen Coming
 Disaster
• A condition in which an information resource
is unavailable, as a result of a natural or man-
made occurrence, that is of sufficient
duration to cause significant disruption in the
accomplishment of agency program
objectives, as determined by agency
management.
 Predictable Disasters
• Disasters that can happen
in the future

• These disasters should be

identified and analyzed

• Many disasters that should

have been identified are
ignored

• If they befall on a company

they bring about great
damage

• This damage is
preventable and thus
should be prevented
 Predictable Disasters Cont…
• The signs of an impending
crisis often lie around us ,yet
we still don’t see them

• Despite robust planning

processes, even the best run
companies are frequently
caught unaware by
disastrous events that should
have been anticipated and
prepared for

• Fortunately ,there are ways

to spot danger before it’s too
late
 The R.P.M
• Recognition Prioritization Mobilization

• If a damaging event happens that was

foreseeable and preventable , no excuses
should be brooked

• The difference between a true surprise and one

that should have been predicted is the RPM
process
 RPM
• Recognizing the threat

• Some disasters cant be foreseen

• The one’s that should be foreseen should be

spotted by the management

• If the disaster still takes place then the

management is not to be blamed
 RPM Cont…
• The ways to determine the failure of recognition

• Leader marshaled resources to scan the

environment for emerging threat

• It should be asserted whether a reasonable job

was done in interpreting and analyzing the data
that was collected

• If not then the leader should be held responsible

 R PM

• Making the threat a priority in the organization

• Predictable surprises also occur when a threat is

recognized but not given priority

• A leader performs careful cost benefit analysis

and gives priority to those threats that represent
the highest costs
 RPM

• To actually mobilize the resources required to

prevent a disaster

• Failure to mobilize occurs when leaders

recognize and give adequate priority to a
looming problem but fail to respond effectively
Failure of Recognition In Real Life

• The year 2001 the

general electrics
company failed in
recognizing a future
disaster

• European Commission
regulators refused to
approve GE’s $42
billion acquisition of
Honeywell
Failure of Prioritization In Real Life
• Monsanto fell into this
trap in the late 1999

• CEO Robert Shapiro

failed to win public
acceptance of genetically
modified foods in Europe

• They did not realize and

give importance to the
impact of the mad cow
disease and other such
diseases
Failure of Mobilization In Real Life
• In the

• The SEC tried to reform

the U.S accounting
system well before the
collapse of Enron and
WorldCom

• The five big accounting

firms lobbied Congress to
block new regulations to
reform the accounting
systems
 Getting Into A Disaster
• Sometimes leaders actually
set themselves up for
predictable surprises

• In 1998 39 pharmaceutical
companies got together to
sue the South African
government

• The government was sued

over its attempt to reduce
the cost of HIV drugs

• The companies got a global

response against their
actions
 Why We’re Vulnerable
• Different factors could be reasons to our
vulnerability

» Psychological

» Organizational

» Political
Psychological Vulnerabilities
• The human mind is a notoriously imperfect
instrument
• Cognitive Biases
• Things are better than they really are
• Select evidence that supports our
preconceptions
• Pay little heed what other people are doing
• Humans are creatures of the present
• Pay less attention to problems that you
haven't faced yourself
 Organizational Vulnerabilities
• Complex business structures can make it difficult
to anticipate predictable surprises
• Companies are usually divided into:

• Organizational Silos

• Information can be fragmented

• Responsibility is dispersed
 Political Vulnerabilities
• Predictable surprises can emerge out of
systemic flaws in decision-making processes
• Imbalances of power may lead executives to
overvalue the interests of one group while
slighting those of other equally important groups
• Vested interests can slow or block action
intended to resolve a growing problem
• Companies are all too often oblivious to
dynamics of government systems
 Shell & Greenpeace
• April 29th ,1995, WAS
NOT A GOOD DAY for
royal Dutch/Shell.

• Greenpeace activists
launched an attack on the
company in retaliation to
Shell’s decision to sink an
oil-storage platform

• This soon became a global

issue and Shell was
brought into battle grounds
 Shell & Greenpeace
• If we go into the depths of
the story and analyze
why this disaster wasn't
predicted earlier???

– The Psychological
aspects

– The Organizational
aspects

– The Political aspects

 The Psychological aspects

• We see the world as we like it to be

• The people a shell had an unshakable
biased
• They believed they could not be wrong,
and thought with that in their minds
• Being an engineering firm there thinking
process was mechanical
• They were not ready to counter emotional
arguments
 Organizational Aspects
• Organizational parochialism was clearly evident
within shell
• The companies decentralized management
structure worked well when dealing with routine
procedures
• But its dealing with crises that crossed national
boundaries was not good
• Shell UK focused basically within UK
• While Greenpeace focused on global attacks
against Shell
 Political Aspects
• Shell failed to anticipate and shape
European political responses to its Brent
Spar plan
• Negotiations were made only with the
British Government and the European
nations were notified
• Later after pressure was applied on the
German government, Germany forced
Shell UK to reverse its decision
Solutions