At 11:37 a.m. on Jan. 28, 1986, the space shuttle Challenger lifted off from Cape Canaveral. Seventy-three seconds later, it broke apart, killing all seven of its crew members.
The night before the launch, a conference was held at Morton Thiokol headquarters outside Brigham City between NASA officials and five Utah-based engineers. The engineers pointed out that this mid-winter launch would happen when cold overnight temperatures would stiffen the rubber o-rings designed to keep burning propellant from leaking out. They pleaded for a postponement. Remembering that meeting, one engineer said, “I fought like hell to stop that launch!”
Motivated by its ambitious launch schedule over the coming months, NASA was undeterred by the engineers. One key official responded, “My God, Thiokol, when do you want me to launch? Next April?”
In retrospect, we recognize that the Challenger disaster could have been prevented if the judgment of lower-ranking employees had been heeded. It raises two critical questions for all leaders: Why do we make bad decisions? And how can we avoid making them?
Harvard psychologist Dan Gilbert suggests that we start with understanding a decision-making formula offered by the Dutch polymath Daniel Bernoulli in 1738:
Expected Value of Success =
(Probability of a Good Outcome) X
(Value of that Good Outcome)
Gilbert suggests that we subconsciously apply this formula to most of our decisions, but that we routinely do it badly. Why? He points out that the formula only works effectively when we very objectively provide the answers to the two factors involved.
In the case of deciding to launch Challenger, NASA officials undoubtedly based their decision to proceed on the fact that this was the 10th trip for Space Shuttle Challenger. With nine successes under their belt, a 10th one seemed like a surety — or 100 percent probability of a good outcome. The Thiokol engineers, on the other hand, put the odds of a good outcome at zero. Engineer Bob Ebeling told his wife later the night before the launch, “It’s going to blow up.”
Looking at the second factor, the value of a good outcome, NASA insisted that staying on schedule trumped all other considerations. They put the value of the launch as very high. The engineers felt that a postponement did little to harm the shuttle program, thereby assigning a much lower value to the urgency of a Jan. 28 launch.
Doing the simple math, Bernoulli’s formula gave diametrically opposed conclusions. NASA fully expected a great success that would advance the U.S. space program, while the engineers fully expected a disaster. Hindsight allows us to see that the engineers were far more objective, and, therefore, were vindicated. Sadly, seven lives were lost — and the U.S. space program was irreversibly harmed.
So, how can we, as leaders, avoid making such bad decisions? There are three types of biases that we need to be aware of and address in our decision-making processes. By doing so, our answers to Bernoulli’s two factors will be substantially more objective. These are: 1. Ego bias, 2. Confirmation bias, and 3. Optimism bias.
Ego bias extends from the fact that you are in charge and, therefore, you subconsciously attribute more merit to your perspective than that of anyone else. Should you be confident in your ideas? Of course, but you should also be sufficiently humble to listen to and consider other perspectives!
Confirmation bias is a function of having already made up your mind. You interpret information in a way that confirms your preconceived notions, rejecting anything that fails to confirm those perspectives.
Optimism bias is pervasive among entrepreneurs. It is the tendency to believe that the odds of failure are very small, not because empirical data doesn’t demonstrate that failure is somewhat likely, but because “I’m different; I’m smarter or better than the rest.”
To avoid these biases, the best leaders have learned to seek out those who are strongly opposed to their positions with an eye to sincerely understanding that opposition. To this end, I recommend a process I learned many years ago as a high school debater: Force yourself to be ready to argue for your opponent’s position. This exercise will help you gain better understanding of how someone can disagree with you.
Finally, with your opponent, search for a common interest. This tends to transform the decision from who is right to what is right. With regard to Challenger, perhaps the decision would have changed if all parties had agreed that the highest common interest was the safety of the astronauts.
Richard Tyson is the founder, principal owner and president of CEObuilder, which provides forums for consulting and coaching to executives in small businesses.