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Guido Stein, Professor, IESE, University of Navarra

When it is too late

Mon, 19 Apr 2010 07:48:34 +0000 Published in Expansion (Madrid)

During this Easter week I had the opportunity to watch again the movie Titanic. Although it has not gone down in the history of cinema as a work of art, it contains useful lessons for managers and leaders in general.

Everyone thought that the Titanic was a technical marvel impossible to sink. At the beginning of her first voyage across the Atlantic, the owner of the business shipping company decides to reward the captain with a substantial amount of additional money and public fame if he achieves the goal goal of halving the crossing time by doubling the speed of Wayside Cross. The captain has some professional doubts that this is the best decision; however, external motivation quickly dispels them.

When asked about the possibility of encountering ice blocks, the answer is that it is very rare during that time of the year. The history of data is incontrovertible. From the command post the horizon looks clear and the sun is shining brightly. However, that same night the small tip of the iceberg is sighted. Then it is too late. Although the collision is dodged on the surface, the huge submerged mass of ice dramatically cracks the hull. Only the engineer who created it knows that the ship will be sunk within the hour.

Peter Drucker, the founder of management, has a reputation, even after his death, for predicting trends; however, he explained that he did not like forecasting: "I just look out the window, then I see what is visible, but has not yet been seen". Even airplane pilots who enjoy the most sophisticated flight technology find it useful to look out the window.
Effective decisions rest on more than data statistics, however accurate and meaningful they may be. Statistics and empirical science gave their best support to the captain's behavior; and yet the Titanic sank.

When in the world of business we make decisions focusing only on the tip of the iceberg, we focus on managing by "tweaking" commercial, financial or staff policies, changing organizational charts or reorganizing resources, and we forget about what lies underneath, the reasons why we are where we are, and the values: what goals we are pursuing. We lose sight of the important part of the iceberg. Policies, resources, strategies, etc. are undoubtedly relevant, but they are not something derivative, secondary.

The Titanic's owner managed to alienate the intelligence of an expert captain, and the captain was easily persuaded. Losing sight of the passengers and his fellow crew members, he dug the hole. It was only a matter of time before he fell in.

Any resemblance with what is happening in the social, political or staff world of the last hour of our time should make us meditate. We only emerge from crises after we have really hit rock bottom, that is, after having reviewed what we have done with our priorities, which are none other than our values. In the end, we get what we are looking for, whether we deserve it or not. Like the captain of the ship that would never sink.