PPA 503 – The Public Policy-Making Process

Lecture 4c. Predictable Surprise: Hurricane Katrina and Government Accountability

Source

Max H. Bazerman and Michael D. Watkins. 2004. Predictable Surprises: The Disasters You Should Have Seen Coming and How to Prevent Them.

Predictable Surprises

A predictable surprise arises when leaders unquestionably had all the data and insight they needed to recognize the potential for, even the inevitability of, a crisis, but failed to respond with effective preventative action.

Example: 9/11. Example: Enron scandal.

Characteristics of Predictable Surprises

Leaders know a problem exists and that the problem will not solve itself.

Organizational members recognize that a problem is getting worse over time.

Fixing the problem will incur significant costs in the present, while the benefits of action will be delayed.

Characteristics of Predictable Surprises Addressing predictable surprises typically

requires incurring a certain cost, while the reward is avoiding a cost that is uncertain but likely to be much larger.

Decision-makers, organizations, and nations often fail to prepare for predictable surprises because the natural human tendency to maintain the status quo.

A small vocal minority benefits from inaction and is motivated to subvert the actions of leaders for their own private benefit.

Cognitive Roots of Predictable Surprise We tend to have positive illusions that lead us to

conclude that a problem doesn’t exist or is not severe enough to merit action.

We tend to interpret events in ways that are self-serving.

We overly discount the future. We tend to maintain the status quo, and refuse to

accept any harm that would bring about a greater good.

Most of us don’t want to invest in preventing a problem that we have not personally experienced or witnessed through vivid data.

Organizational Roots Four critical information processing tasks.

Scan the environment and collect sufficient information regarding all significant threats.

Integrate and analyze information from multiple sources within the organization to produce insights that can be acted upon.

Respond in a timely manner and observe the results.

In the aftermath, reflect on what happened and incorporate lessons-learned into the “institutional memory” of the organization to avoid repetition of past mistakes.

Organizational Roots

Scanning failures. Selective attention. Background noise. Information overload.

Integration failures. Silos. Secrecy.

Organizational Roots Incentive failures.

Collective action problems. Conflicts of interest. Illusory consensus.

Learning failures. Organizational learning disabilities

(explicit versus tacit knowledge; individual versus relational knowledge).

Memory loss.

Political Roots

Special interest groups. Political action committees. Campaign funding.

Hurricane Katrina Knowing the problem existed.

U.S. GAO, 1976, 1982. New Orleans Times Picayune June 23-27,2002. Civil Engineering Magazine, 2003. National Geographic October 2004. FEMA, Allbaugh, three most likely disasters (New

Orleans, California, New York), 2001. FEMA, Hurricane Pam simulation, 2004.

Problem getting worse over time. Numerous articles on the destruction of

Louisiana wetlands.

Hurricane Katrina

High current costs, delayed benefits. $2 billion to complete, $1 billion to

upgrade to Category 4 or 5, 30 years. Certain costs, uncertain larger

rewards. Emergency management traditionally

suffers from discounting future events.

Hurricane Katrina Maintain status quo.

Incremental changes in New Orleans levee system brought on by individual disasters.

Subversion by vocal minority. Dominance of homeland security over

emergency preparedness. Corruption in Louisiana. Mississippi casinos and anti-gambling

lobbying.

Preventing Predictable Surprises Recognition.

Measurement system redesign. Intelligence network building. Scenario planning. Disciplined learning processes.

Prioritization. Structuring dialogue. Decision analysis. Incentive system redesign.

Preventing Predictable Surprises

Mobilization. Persuasive communication. Coalition building. Structured problem-solving. Crisis-response organization.

Preventing Predictable Surprises: Catastrophic Disasters

A representative set of natural and manmade disaster scenarios.

A flexible set of response modules to deal with expected scenarios or combinations of scenarios.

A plan that matches response modules to scenarios.

A designated chain of command. Preset activation protocols.

Preventing Predictable Surprises: Catastrophic Disasters

A command post and backup. Clear communication channels. Backup resources. Regular simulation exercises. Disciplined post-crisis review.