Poor Disaster Preparation: Three Mental Biases

Wharton marketing professor Robert Meyer and his co-authors on several studies have explored the reasons why individuals and organizations fail to prepare adequately for major disasters such as hurricanes.  They argue that three mental biases impair our ability to project the likelihood and negative impact of a looming disaster appropriately.   Here's Meyer describing the findings:

 Basically, what we found over a number of years and using a combination of field surveys and working with people in laboratories, is that effectively, people are subject to three major biases. One is, simply put, that there is a tendency to under-appreciate the future or under-consider the future, or future consequences. A second thing is that people are too quick to forget the past, or too slow to remember the negative events that have happened in the past. The third one is that if in doubt, what often happens is that people will follow the advice of other people who are no less prone to those sorts of mistakes than they are.

I believe similar biases explain why many firms fail to prepare adequately for major disasters of all kinds, not simply natural disasters.   By making executives aware of these biases, perhaps firms can do a better job of preparing for events that could impact their operations in a significant way.  

Individualistic vs. Systemic Views of Failure

When a failure occurs, people can adopt two different mental models for explaining the reasons for that poor performance.   The "individualistic" perspective looks to blame the "rotten apple" for the failure.  Who made serious mistakes, and what should we do about those people?  In these cases, the emphasis is often on holding people accountable.   By contrast, the "systemic" perspective asks the question:  "Is there a rotten apple or two here, or do we have a bigger problem - i.e., is the barrel itself rotten?"   In other words, do we have cultural and organizational problems that contributed to a failure?   Here, we ask the question:   If we just replace a few individuals, would other new people in those roles behave in a similar manner?  Would they behave similarly because they will face the same culture, environment, structure, etc.? 

In my view, managers make a mistake when they go to the extreme in adopting one perspective or the other.  If you emphasize the "individualistic" perspective too much, you may engage in too much finger pointing.  The blame game may drive out all opportunities for learning and improvement.  Moreover, you may repeat failures, because you have not addressed underlying causal factors beyond human error.  If you emphasize the "systemic" perspective exclusively, you create a perception of a lack of accountability.  High performers question why low performers are allowed to continue behaving as they do without being sanctioned in any way.   In my experience, most organizations make the mistake of relying far too much on the "individualistic" perspective.   As a result, we condemn ourselves to repeat the mistakes of the past.