Business Decision Making

Decision Making In Business


I recently read a book about making business decisions. The book applied mostly to the general populace. But it got me to thinking about how that could be applied to managers. One section in particular jumped out as an obvious application to business decision making in management.

A bit of background first. Between 1940 and 1990, the rate of plane crashes due to pilot error hovered steadily around 65%. No matter what kind of plane, or where the plane was going, the majority of crashes were due to pilot error.

But in the early 1990s, the trend started to change. Currently the number of aviation deaths attributed to flight crew error is under 30%. Why did it hold steady for 50 years, and then drop so much so quickly?

Two reasons: the advent of flight simulators, and CRM. Flight simulators sound like fun, but won’t help us unfortunately. But CRM can help.

CRM In Business

So what the heck is CRM, you may be asking? It stands for Cockpit Resource Management. It stems from a study by NASA that concluded that many cockpit mistakes were attributable to “a Godlike certainty” of the pilot in command.

If other crew members had been consulted or if the pilot had considered other alternatives, then some of the decisions might have been avoided. As a result, the goal of CRM was to create an environment in which a diversity of viewpoints was freely shared.

United was the first airline to implement CRM after a preventable crash spurred them to train all of their employees. The captain of the fatal flight had been so focused tracking down a faulty circuit that the plane literally ran out of fuel and crashed in a suburb of Portland.

Using CRM, no longer was the captain the dictator of the plane. Instead, flight crews were expected to work together and constantly communicate with one another. Everyone was responsible for catching errors. Effective team communication was crucial. Team communication saves lives.

If fuel levels were running low, it was the job of the flight engineer to make sure the pilot grasped the severity of the situation. If the copilot was convinced that the captain was making a bad decision, then he was obligated to voice his dissent. Flying a plane (or running an organization) is extremely complicated and it is essential to make use of every possible resource.

The best decisions emerge when a multiplicity of viewpoints are brought to bear on a situation. The wisdom of crowds applies to cockpits (and companies).

In recent years, CRM has moved beyond the cockpit. Many hospitals have realized that the same decision making techniques that can prevent pilot error can also prevent unnecessary mistakes during surgery.

Consider the experience of the Nebraska Medical Center, which began training its surgical teams in CRM in 2005. To date, more than a thousand hospital employees have undergone the training. The mantra of the CRM program is “See it, say it, fix it”; all surgical-team members are encouraged to express their concerns freely to the attending surgeon.

In addition, team members engage in post-operation debriefings at which everyone involved is supposed to share his or her view of the surgery. What mistakes were made? And how can they be avoided next time?

A recent analysis found that after six months of CRM training, the percentage of staff members who “felt free to question the decisions of those with more authority” had gone from 29% to 86%. More important, the increased willingness to point out potential errors led to a dramatic decrease in medical mistakes.

The number of “uneventful cases” in which nothing went wrong during cardiac surgeries went from 21 percent to 62 percent. If I were having cardiac surgery, I would sure hope that my hospital has embraced CRM!

The reason CRM is so effective is that it encourages flight crews and surgical teams to think together. It deters certainty and stimulates debate. In this sense, CRM creates the ideal atmosphere for good decision-making, in which a diversity of opinions is openly shared. The evidence is looked at from multiple angles and new alternatives are considered. Such a process not only prevents mistakes but also leads to startling new insights.

Don’t be afraid to consult your team or ask for their opinions. Your job is not to know everything. And your team can be a wealth of information if you trust them enough to voice their dissenting views. Making decisions with all of the relevant data makes for a stronger leader.