What Leaders Can Learn From Pirates

By USDR

Somali piracy is on the rise again, according to the news. But the truth is, the pirates never really  went away. They were effectively thwarted — until complacency set in. It’s a valuable lesson for leaders.

Back in 2011, piracy was a front-page story: pirates were holding crews for ransoms as high as $13 million. The maritime industry went on high alert, installing extensive security systems, lobbying for pricey navy patrols, and establishing protocols that sent ships on longer, less risky routes and at higher speeds. From higher fuel costs to hefty increases in ransom insurance rates, the tab for this reached $7 billion a year.

But the vigilance worked. Piracy dropped from a peak of 488 incidents in 2011 to just 36 incidents each in 2015 and 2016, according to data from Oceans Beyond Piracy (OBP), a nonprofit that studies maritime security. Here’s where the leadership lesson starts.

The industry knew that the numbers were incomplete: the data could not tell the whole story. Companies were notoriously reluctant to report piracy. Investigations take time and cost shipping companies up to $1000 per day in lost income; reporting can push up insurance rates by 30 percent; and the rates of prosecution are low. So while knowing on some level that correlation is not the same as causation, the industry chose to focus on piracy’s apparent downturn, and relaxed. The tab for industry security fell to $1.7 billion in 2016.

It is true that better threat assessments for different kinds of vessels lowered some insurance rates. But more true is that the industry chose to forget. With fewer incidents, international naval patrols stopped, private security forces declined, and shipping companies started resuming riskier, slower routes that put them right back in dangerous proximity to the Somali coast.

The result: In March, pirates hijacked the Aris 13, a Greek fuel tanker, on its way from Djibouti to Somali’s capitol, Mogadishu. Pirates chased and boarded the vessel as it was traveling — well below the recommended speed — through the Socotra Gap, a dicey shortcut between Ethiopia and Yemen. It was the first hijacking of a large commercial vessel in five years — and it was a wakeup call.

The moral for leaders: Don’t get complacent. Piracy only dropped because it was thwarted by a costly but effective international and coordinated effort. During the lull, the maritime industry missed key new information and insights, letting cognitive bias take over. It concluded, wrongly, Since there isn’t activity, the situation must be better. This pesky mental shortcut may help with everyday decision-making, but it’s also a well-worn pathway that narrows our thinking.

Crises can happen in all forms. So here are three tips to keeping your employees vigilant, and open to new information and insight:

  1. Build strategic stops into the  workflow.

Insight doesn’t come from collecting information alone; it comes from brainwork. Vary the pace of work and build in stops so employees have a chance to think. In a rush, we tend to narrow our thinking; given time, we thoughtfully reflect. At chosen intervals, ask employees to write up what they know so far: what they have learned, its implication, what it means. The act can generate some powerful ‘Aha moments,’ and the time investment up front will save you time later on. By encouraging employees to reach conclusions on discrete sections of research and work, you are encouraging them to not only collect information, but also synthesize and analyze their work along the way.

  1. Insist that employees back all assertions with  evidence.

Ask your employees to prove it—literally. Can they distinguish between hypotheses that appear to be disproved and those that are simply unproven? Unproven hypotheses should be kept alive until disproven, and all significant arguments for and against each hypothesis should be laid out. But be careful in deleting hypotheses that you are not falling prey to the very biases you are trying to control. One of the points of this exercise is to consider hypotheses, so crossing them off in a biased way defeats the point.

  1. Teach employees to go beyond document-based work.

Teach employees to ask the right questions of the right people and appreciate first-hand sources. Getting beyond document-based sources creatively upgrades an employee’s traditional material by mining the insights and perspectives of real people. When employees learn to identify good prospects to speak with, and ask them great questions to elicit clear, concise, and cogent answers, they can better address the issues related to the tasks you ask them to complete.

Cheryl Strauss Einhorn is the creator of the AREA Method, a decision-making system for individuals and companies to solve complex problems. The founder of CSE Consulting, she’s the author of Problem Solved: A Powerful System for Making Complex Decisions with Confidence and Conviction. She teaches as an adjunct professor at Columbia Business School, and has won several journalism awards for her investigative stories on international political, business and economic topics. To learn more about Cheryl, visit areamethod.com. Follow her on Twitter: @cheryleinhorn.

 

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.
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