Sunday, April 11, 2010

Size Doesn't Guarantee Quality

On 15th April, 2010, it was 98 years since the Titanic sank and some large corporations should remember and reflect on the comments of the captain, Edward. J. Smith, before the fateful voyage. When asked how he could best describe his, nearly, 40 years at sea, he replied, “Uneventful. I have never been in an accident and I have seen but one vessel in distress in all my years at sea. I have never seen a wreck and have never been wrecked, nor have I ever been in any predicament that threatened to end in disaster of any sort.”

In the 21st century shouldn’t the biggest and most profitable organisations be the guiding example for the rest of the business community to follow and learn from - lessons in best practice and business excellence, for example? Yet isn’t it true, in today’s corporate world, that large organisations fit into one of two extremes – there are the large organisations that exude excellence – in leadership, in customer service, job satisfaction and overall best practice.

Then, sadly, there are those large organisations, who, on the one hand are profitable, but who use their size to bully all comers and who hide their weaknesses behind corporate arrogance and denial.

It’s nothing new, “for organisations to deceive themselves is neither rare nor random. Charles Frankel, Assistant Secretary of State in President Johnsons Administration in the US (1965-67) concluded that self-deception was not simply a passing problem, but a permanent condition facing all organisations,” (Landau, M. and Chisholm, D., 1995, p.72).

Organisations, in accepting bullying and self-absorbent cultures, forget the bad influence their leaders can have on their staff, as an example, a steward on the Titanic when asked if it was true that the ship was unsinkable, replied “Madam, God himself could not sink this ship.”

So what can these organisations and leaders learn if they open their eyes to history and the Titanic?

The Titanic was warned in advance of the increase in ice and the potential for icebergs, but chose to ignore the warnings. Large organisations with poor cultures know, deep down, the impact of their arrogance but, up to now, have chosen to ignore them, enjoying the feelings of power and control – the feelings of invincibility.

After setting sail the Titanic restated its objectives and decided to attempt to beat the record for crossing the Atlantic to impress its shareholders. There was no immediate reward for beating this record (held by its sister ship) since the Titanic was receiving publicity on both sides of the Atlantic. Power and arrogance led to this decision and contributed to the upcoming disaster. Best practice organisations focus on business principles such as sustainable growth and putting the customer first; on transparency and creating cultures that lead to job satisfaction and retention at all levels – an organisation that will provide a ‘luxurious and safe passage’ for all those who embark on the journey.

Finally, the capacity of the Titanic's lifeboats was only 1,178, while the ship was built to carry 3,000 passengers and crew. There was simply no way any more than half the ship's complement would survive should the unthinkable happen. So when the tragedy occurred, only the few survived - only 705 out of about 2,220 escaped to the safety of these craft. The lessons should be self-evident, plan for all eventualities; accurately analyse, assess and manage your organisations risk.

In those large organisations that currently embrace a culture of denial and self-worth, within their ranks, it’s time for their strategic leaders to ‘step-up’ and learn some humility. Critical self-evaluation is a basic requirement of excellence in leadership – it takes courage and self-belief – and that is what will distinguish between the great leaders of tomorrows great organisations and those organisations who are wondering where the iceberg came from – and who’s the idiot who didn’t see it coming!

As Pamela Waymack states in her 2006 article, “management’s overconfidence and failure to see its own vulnerability contributed to the sinking of the Titanic. Neither historic track record nor size and prowess are a match for a market in flux. We cannot assume that our organisations are invincible. A seaworthy captain with a spotless record for 40 years was no match for this field of icebergs.” (p.41).


Landau, M. and Chisholm, D. (1995). The Arrogance of Optimism: Notes on Failure-Avoidance Management. Journal of Contingencies & Crisis Management, Vol 3, Issue 2, p.67-80.

Waymack, P. (2006). Managing the ice in the waters ahead: Lessons from the Titanic. HFM (Healthcare Financial Management). Vol 60, Issue 7, p.38-41.

1 comment:

  1. Nice one Nigel. A call for “all hands on deck” and take note of the warning signs. Keep sailing your course, we are all in this boat with you. Carl