High-Stakes Decision Making: The Lessons of Mount Everest
August 26, 2002
Michael A. Roberto
On May 10, 1996, five mountaineers from two teams perished while climbing Mount Everest. Is there anything business leaders can learn from the tragedy? HBS professor Michael A. Roberto used the tools of management to find out. Plus: Q&A with Michael Roberto
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Editor's Note: What went wrong on Mount Everest on May 10, 1996? That day, twenty-three climbers reached the summit. Five climbers, however, did not survive the descent. Two of these, Rob Hall and Scott Fischer, were extremely skilled team leaders with much experience on Everest. As the world's mightiest mountain, Everest has never been a cakewalk: 148 people have lost their lives attempting to reach the summit since 1922.
Newspaper and magazine articles and books—most famously, Jon Krakauer's Into Thin Air: A Personal Account of the Mount Everest Disaster—have attempted to explain how events got so out of control that particular day. Several explanations compete: human error, weather, all the dangers inherent in human beings pitting themselves against the world's most forbidding peak.
A single cause of the 1996 tragedy may never be known, says HBS professor Michael A. Roberto. But perhaps the events that day hold lessons, some of them for business managers. Roberto's new working paper describes how. Here follows an excerpt from "Lessons From Everest: The Interaction of Cognitive Bias, Psychological Safety, and System Complexity." Implications for leaders
This multi-lens analysis of the Everest case provides a framework for understanding, diagnosing, and preventing serious failures in many types of organizations. However, it also has important implications for how leaders can shape and direct the processes through which their organizations make and implement high-stakes decisions. The Everest analysis suggests that leaders must pay close attention to how they balance competing pressures in their organizations, and how their words and actions shape the perceptions and beliefs of organization members. In addition, the case provides insight regarding how firms approach learning from past failures. Balancing competing forces
The Everest case suggests that leaders need to engage in a delicate balancing act with regard to nurturing confidence, dissent, and commitment within their organizations. First, executives must strike a balance between overconfidence on the one hand and insufficient confidence on the other. Leaders must act decisively when faced with challenges, and they must inspire others to do so as well. A lack of confidence can enhance anticipatory regret, or the apprehension that individuals often experience prior to making a decision. High levels of anticipatory regret can lead to indecision and costly delays. 71 This anxiety can be particularly problematic for executives in fast-moving industries. Successful management teams in turbulent industries develop certain practices to cope with this anxiety. For instance, some leaders develop the confidence to act decisively in the face of considerable ambiguity by seeking the advice of one or more "expert counselors," i.e. highly experienced executives who can serve as a confidante and a sounding board for various ideas. 72 Naturally, too much confidence can become dangerous as well, as the Everest case clearly demonstrates. To combat overconfidence, leaders must seek out information that disconfirms their existing views, and they should discourage subordinates from hiding bad news. Leaders also must take...
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