The Leader's Guide to Managing Risk: A Proven Method to Build Resilience and Reliability

What People Are Saying About The Leader’s Guide to Managing Risk

"When did you last learn something so novel, so brilliant, and so helpful that you could hardly wait to share it with others? The Leader’s Guide to Managing Risk is a book that has given me new eyes, providing clarity to a pattern for understanding and seeing things that now seem so obvious."

—DAVID BOYCE,

manager of human performance improvement at Battelle Energy Alliance/Idaho National Laboratories

A must-read for those in healthcare safety and performance improvement.

—JACK COX, MD,

senior vice president/chief quality officer at Providence St. Joseph Health and former Air Force flight surgeon

"I thoroughly enjoyed the book! The Leader’s Guide to Managing Risk should be required reading of anyone desiring to understand modern safety principles."

—JOHN ALLEN,

vice president and chief safety officer at JetBlue Airways

This is one of those books you can’t put down . . . a must-read for all aviation and high consequence industry safety professionals.

—NICK SABATINI,

associate administrator for regulation and certification at the Federal Aviation Administration (retired)

This book takes the spaghetti diagram of complex thinking about risk mitigation and makes it accessible to the reader on the first pass. The use of memorable stories to accentuate the points really works and makes the book a quick and interesting read.

—JEFF BRUNDAGE,

senior vice president of human resources at American Airlines (retired)

Today’s leaders must be prepared to navigate through levels of uncertainty in all industries. In this remarkable book, K. Scott Griffith will challenge and prepare aspiring and current leaders to enhance their risk skills.

—CHIEF CHET EPPERSON

Department of Justice (retired), court-appointed monitor, author, and police practice consultant

"The medical community must demonstrate high reliability as part of its social contract with society. K. Scott Griffith’s work, manifest through The Leader’s Guide to Managing Risk, offers an easy-to-understand approach that aligns nicely to that contract and the osteopathic profession’s focus on interconnectedness, holism, and prevention."

—ROBERT A. CAIN, DO, FACOI, FAODME,

president and chief executive officer at the American Association of Colleges of Osteopathic Medicine

Healthcare delivery is complex, serving multiple values in an everchanging environment. Griffith makes the sequence of reliability understandable and achievable with everyday examples.

—PEGGY DUGGAN, MD,

executive vice president and chief medical officer at Tampa General Hospital

COPYRIGHT

© 2023 K. Scott Griffith

All rights reserved. No portion of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, scanning, or other—except for brief quotations in critical reviews or articles, without the prior written permission of the publisher.

Published by HarperCollins Leadership, an imprint of HarperCollins Focus LLC.

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ISBN 978-1-4002-4379-2 (eBook)

ISBN 978-1-4002-4378-5 (HC)

Epub Edition OCTOBER 2023 9781400243792

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To Sean, Sam, Sophie, Farhin, Joey, and Omar

Contents

Cover

Title Page

Copyright

Introduction: Blind Spots

Hiding in Plain Sight

A Better Way

Prologue: Flight 191

Rocked by the Invisible

The Report

The System

The Human Component

The Weather

A Pattern in the Chaos

1: A Better Business Model

A Road Less Traveled

Words to Live by . . . Or Not

Apples to Oranges

Beyond Quality Management

Introduction to Reliability

A Hidden Science

Murphy’s Myth

Risk Is Proportional and Personal

The Sequence of Reliability®

2: Seeing and Understanding Risk

The Iceberg Model

Seeing and Understanding Risk

A Scorpion Story

Ulcers

Influenza

A Predictable Pandemic: COVID-19

Antimicrobial Resistance

The Foods We Eat

Driving Apps and Autonomous Vehicles

Brain Injuries

A Service Animal Story

3: System Reliability

What System Reliability Means

System Factors

A Checklist Story

An Everyday Example

System Design

Barriers

Redundancies

Recoveries

A Hospital Story

4: Human Reliability

The Fallible Human

A Drunk Driver

A Medical Mistake

What Human Reliability Means

The Sequence of Human Factors

Hidden Patterns

Two Modes of Thinking

Human Errors

Managing Human Errors

Why Won’t Humans Just Follow Rules?

At-Risk Choices

Steve Irwin

Managing At-Risk Choices

Sequenced Solutions

When No One’s Watching

The Model Penal Code

Beyond Reckless Choices

Justice and Reliability

Human Reliability Summary

A Spaghetti Story

5: Organizational Reliability

What Organizational Reliability Means

Organizational Factors

Multiple Values

Leadership

Culture

Beware the Biases

Justice with a Purpose

The NASA Space Shuttle Stories

6: Predictive Reliability

What Predictive Reliability Means

Simple Models

Predictive Risk Modeling and Analysis

A Train Accident Story Revisited

Uncovering the Hidden Science

A Big Trucks Story

7: Big Challenges

War

Peace

Climate Instability

Parenting

Surviving a Dangerous World

8: Flipping the Iceberg

After Flight 191

The ASAP Story

Aviation’s Dramatic Improvement

Zero Accidents?

Applying the Scientific Method

Preventing Employee Burnout

Collaborative Just Culture®

Collaborative High Reliability®

Building the Reliability Management System (RMS)

RMS Inclusion Criteria

Initiative Categorization Within Each RMS Attribute Management System

Qualification and Certification

Epilogue

Key Takeaways

About SG Collaborative Solutions

About DNV

Further Reading

Acknowledgments

Endnotes

Index

About the Author

INTRODUCTION

BLIND SPOTS

HIDING IN PLAIN SIGHT

We see and understand the world through the lens of our experiences. We have unique pathways in life. How we interpret our experiences depends on our biology, our ancestors’ DNA ingrained in our consciousness,¹ our environment and culture, and the specific circumstances of a situation.

Sometimes our interpretations help us survive, such as avoiding predators, learning to hunt and gather, mastering fire, or winning a war. Understandably, we celebrate our successes: profitable financial results, good grades in school, getting to work on time, meeting our obligations, and enjoying our personal lives. We work with colleagues who share our mission, vision, and values. We strive to produce results that last by focusing on what we do well.

But sometimes we learn the wrong lessons from our successful outcomes. Our risky systems and behaviors produce dividends until they don’t, and we pay for our miscalculations with our fortunes, our lives, and sometimes the lives of others.

There’s a hidden pattern to how bad things unfold and a sequence to preventing them. This book will illuminate that science and show us how to apply it in our business and everyday life.

Leading a business is typically about focusing on what we do well—serving marketplace needs through the efficient delivery of products and services. In fact, many top leaders are hired or promoted because of their operational experience and expertise—being good at serving the mission. But how many are experts outside the core business?

A founder and CEO may understand that IT support is essential to product delivery and revenue, but the expertise to ward off a cyberattack likely lies beyond her direct experience. After all, the thrill and gratification of starting a new company comes from managing our successes—not from thinking about the negative consequences of running the business.

The unexpected outcome might be from forces beyond our control, such as a pandemic, natural disaster, economic downturn, or supply chain disruption. Or sometimes harm comes from our own hand, doing what we’re good at doing, only this time with a different result, such as a breach of customer privacy. Either way, it’s the menace lurking below the surface that doesn’t go away, despite our past successes.

It’s the harm that takes place in any organization—a result of unintended consequences. Sometimes the harm is catastrophic, a seminal event such as an industrial accident. It could be the ongoing cost of injuries or damages to employees or clients—a problem that simply won’t go away. It can be seen as the cost of doing business, although no one in the organization wants that to be the case. Despite our best efforts, the numbers aren’t getting better, and we’re beginning to wonder if the problem can be solved. We’ve benchmarked against our competitors, and no one seems to have found the magic bullet. Even organizations with some success admit the problem is far from solved. It keeps us awake at night thinking about what would happen if things got worse, or if people start wondering if a change in leadership might produce better results.

In a dangerous world, blind spots are everywhere. Many of the things you and I do in our everyday lives—drive to the store, send our kids to school, fly in an airplane, get treated at a hospital, manage a business—come with inherent risks. Another driver could swerve in front of us, our child could fail a final exam, the nurse could give us the wrong medication, or we could lose a contract with a major client and declare bankruptcy. There are also global risks we didn’t anticipate, such as the COVID-19 pandemic. And who knows what else lies ahead as our world becomes more complex and potentially dangerous?

Similarly, the homeowner standing on the top rung of the ladder reaching too far to clean the gutters or the teenage driver weaving in and out of traffic aren’t thinking about falling or colliding with another car. Most of us are wired for success, until we fail. What we all have in common is that our optimism and direct experience often outweigh our risk intelligence—the ability to perceive and calculate situational danger. Humans are driven by aspirations and consequences, and if we’ve never experienced a bad outcome, we believe it won’t happen to us. Until it does.

We’re human, you might say, and accidents will happen. But wouldn’t it be better if we could understand the causes of these unintended outcomes and keep them from happening?

The best strategy highly reliable organizations use is to not focus exclusively on what the organization does well, but to devote equal attention to what the organization lacks: expertise in preventing the potential negative consequences of running the business.

Certain high-consequence activities, such as military combat operations and the nuclear power industry, are steeped in principles of catastrophic risk management and are typically funded appropriately to meet the level of risk. But most businesses are not similarly resourced. Sometimes the cost of running a business isn’t recognized until it’s too late, then our attention turns to loss control and mitigation rather than prevention. Insurance can cover part of these liabilities, of course, but the costs can be enormous. Healthcare, aviation, manufacturing, and finance are examples of industries that at times struggle with preventing harm to customers and employees. In the past, the strategies organizations employed in these sectors were based on reactive response. But that’s changing.

A BETTER WAY

The trick is to see, understand, and manage socio-technical risk—the everyday systems and human interactions in the world around us—in a specific order. In this book I will reveal the Sequence of Reliability and how I developed it. This secret to managing risk and preventing catastrophe is a simple, straightforward strategy that works for any endeavor—from crashes and pandemics to avoiding medical mistakes, to improving workforce morale, to achieving better results in our everyday lives.

How is this done? It’s simple but not always easy or intuitive. These concepts and the skills to apply them are within our grasp. This book will illuminate the secret to that success. Anyone can learn it, from CEOs to frontline workers to parents and students. It’s governed by the laws of physics—but instead of atoms and molecules, it’s the science of how people and systems interact to produce results. This sequence of managing risk is essential to keeping our households, our businesses, and our public institutions safer and more productive.

We’ll start by looking at a plane crash I witnessed years ago, and the lessons I learned from it. I’ll explain how this accident shifted my perspective on how bad things happen in our everyday world. We’ll explore the quirky path that led me to devote my professional life to organizational improvement, and I’ll share a few stories along the way to help anchor the principles in everyday experience.

We’ll learn from common occurrences—waking up on time and getting to work, driving to the store, helping with homework, managing our diet and exercise regimens—and from examining catastrophes of Titanic proportions. From these, a strategy to help us improve will emerge.

If we’re running a business, this strategy will help us navigate the turbulent waters of competition, weather the changing external environment, and perhaps most important, to see, understand, and respond to the risk of employee burnout every organization faces today.

We’ll build on these experiences together and learn the Sequence of Reliability in successive chapters. Each one builds to the final chapter, where I will describe how I developed the Aviation Safety Action Program, a transformational approach adopted in the airline industry that led to a 95 percent reduction in the fatal accident rate. This program, which has been replicated more than 767 times, transformed an entire industry through collaboration among businesses, labor associations, and their regulators.

We’ll learn how to see and understand risk through different lenses, manage systems and people more effectively, and improve organizational performance. We’ll discuss ways to identify the environmental and organizational contributors to employee burnout and a collaborative strategy to respond accordingly. We’ll learn how to improve company morale and reduce turnover, resulting in enhanced customer service and satisfaction.

Finally, we’ll explore the world’s first independently audited high reliability standard known as Collaborative High Reliability®—a program I developed as a culmination of the experiences and lessons presented throughout the book. We’ll examine how this standard can be replicated and is available to any business aspiring to sustain high-reliability performance.

But first, we must recognize that what we see ahead may disguise the dangers below the surface. We must flip the iceberg.

PROLOGUE

FLIGHT 191

ROCKED BY THE INVISIBLE

On August 2, 1985, I began a routine walk-around inspection of a Boeing B-727 airliner, preparing to fly from Dallas/Fort Worth International to New York’s LaGuardia Airport. As a young pilot about to complete my first year with American Airlines, everything in life seemed to be falling into place. I had grown up with family and friends around me, I worked hard, and now I had the dream job I always wanted. The world made sense to me.

In the cockpit of a modern airliner, a pilot might fly at any time with pilots who live somewhere else. So all pilots must be trained until they are proficient in system and human performance standards, such as using checklists and following procedures. This focus on standardization makes aviation very reliable.

Or so I thought.

As the flight engineer on this flight, it was my job to check the outside of the plane before the captain and first officer arrived. Starting at the nose and walking around the fuselage, I repeated the inspection exactly as I was taught. The process was second nature. As I made my way around, my mind began to wander, thinking about what I would do later that evening when I arrived in New York, one of my favorite cities in the world. Where should I eat? I thought as I inspected the nose gear inside the wheel well, looking for potential hydraulic leaks and debris. Continuing down the starboard side, I glanced up to make sure the pitot tubes and static ports were free and clear, providing accurate inputs on airspeed, altitude, and barometric pressure. Maybe I’ll try to get tickets to a play, I thought as I walked in front of the right wing.

The smell of jet fuel filled my nostrils. A quarter of the way into my walk-around, I was next to the fuel truck that was filling our plane. Jet fuel is mostly kerosene, engineered for its combustion properties. The B-727 I was flying that day would contain more than fifty thousand pounds of explosive power.

Our aircraft was parked at the northeastern terminal. Standing under the tip of the right wing, I could see that clouds had moved just north of the airport. The weather patterns in north Texas generally move from west to east, along the southern edge of a corridor known as tornado alley. But these clouds didn’t look tornadic. It was a typical summer day in north Texas—billowing clouds and threatening rain, but easy to see and avoid when flying a modern airliner. I wonder if these clouds will bring rain to the area, I thought. We could sure use it.

Then something caught my eye. State Highway 114, just north of the airport, was thick with afternoon rush hour traffic. It was the road I had taken to work today, I thought. The southern edge of a developing storm cell, with a column of rain pouring from the dark clouds, appeared to be almost touching the highway. Suddenly, a wide-body jet burst through the clouds. But this plane wasn’t flying normally.

I had never seen an aircraft so low on final approach, at least not that far from the runway. Something was wrong. For a moment, the plane appeared to be sinking in the nose-up attitude I knew indicated the start of a stall. I heard the plane’s power surge, engines roaring over the din of the airport vehicles around me.

I could see the plane was a Delta Air Lines Lockheed L-1011, a wide-body workhorse. The L-1011 can carry more than 250 passengers, 90,000 pounds of cargo, and 200,000 pounds of fuel. But at this moment, the L-1011 wasn’t just an airplane with technical specifications—it was a colossal machine in distress, and 163 people’s lives were depending on it.¹

My eyes were riveted on the descending plane. It plummeted out of my sight and, I later learned, slammed onto a car on Highway 114, killing the unsuspecting driver instantly. The plane then bounced back into view. Stunned, I slowly realized what was happening. This plane is about to crash.

The pilots were steering the plane toward the runway, although the flight path was still erratic. They might make it, I thought, stuck in my tracks. The plane appeared to be gaining momentum. Without being conscious of the process, my brain automatically estimated the projected flight path: energy, lift, drag, thrust. And the final, most unforgiving force of all: gravity.

At this moment, I was losing proportion among time, experience, and visual interpretation. What I was seeing wasn’t familiar. I couldn’t process it in the normal way we live our daily lives. I was performing a familiar task, but what I saw didn’t make sense. I could perceive what was happening, but I had no data bank of experience to prepare me for the emotional and psychological impact of what came next.

The flight turned catastrophic. The left wing struck a water tank northeast of the runway’s centerline, cartwheeling the plane into a second water tank, breaking the fuselage into pieces. Violent impacts continued as inertia carried the plane forward. Then came ignition—explosions and fires erupting in the fuselage, beginning at the fuel tanks and spreading rapidly throughout the cabin and surrounding areas. Except for the aft fuselage and tail section, the entire plane disintegrated.

The human experience was horrific. Inside the airplane, 163 passengers and crew felt g-forces that few people have ever encountered. Many were ejected from the plane, still belted in their seats. Some died from blunt trauma, internal organs colliding with skeletal barriers. Others died from explosions, fire, and smoke inhalation. The smell of kerosene, hydraulic fluids, cleaning solutions, and other caustic liquids permeated the air. By the time emergency crews arrived, most passengers were dead.

Less than half a mile away, where I was conducting my inspection, there was relative calm. Few people could see what had happened, and the storm seemed unremarkable unless you were in its path. Many of the airport workers outside were wearing ear protection and didn’t hear the impact. People inside the terminal could have confused the explosions with thunderclaps. The busy drone of airport activity continued. The fueler was finishing filling my plane. Workers were loading bags onto the conveyor belt that glided luggage into the cargo holds. People in the terminal were ambling to their gates and checking departure and arrival times.

I was caught between two worlds: one that made sense, with people and systems moving according to plan, and another I had never seen, where things go unexpectedly, catastrophically wrong.

Aviation was familiar, a logical framework I had come to understand through experience. Sure, there was risk involved, I thought, but human aspiration and engineering had taken us to the moon and back. Flying is the safest mode of transportation in the world. It’s my chosen profession. The thought of a plane crashing was something I instinctively suppressed. Our brains have evolved to learn most effectively from direct experience. And what I had just seen was beyond my comprehension.

Suddenly, the air pressure where I was standing dropped. The downburst of wind that only moments before brought down the L-1011 now rumbled over me. A violent gust knocked my hat off and slammed me to the concrete. My flashlight rolled away. Looking up, I could see fear on the fueler’s face. He had just disconnected from the plane’s tank and ground supply but had not reeled in the hose. Picking myself up, I could see him trying to recoil it. But before I could move, a torrent of rain engulfed me. The plane began rocking violently. The passengers must be boarding, I realized.

Though it was hard to see in the rain, I ran over to the jet bridge and up the stairs, fumbling for my keys, without my hat and flashlight. As I stumbled onto the plane’s entryway, I could see the flight attendant’s look of disbelief. What’s happening? she screamed.

Without answering, I ran onto the plane and down the aisle to see how many people were aboard. The plane was more than half full and thick with tension. When people are packed inside a confined space, and one person believes lives are threatened, panic grows exponentially. At first, people were alarmed that violent winds were rocking the plane. Then a passenger looked out the starboard window and saw the aftermath of what I had just witnessed. He shouted: There’s been a plane crash!

The viral panic was overwhelming. People were rushing to the emergency exits. I knew if I didn’t act quickly, passengers would eject right into the forces of wind and rain that had just brought down the Delta L-1011. And I knew anytime people evacuate by the emergency exits, injuries are bound to happen, even in the best conditions.

I grabbed the passenger address system handset: "This is your pilot. We’re experiencing a sudden rainstorm. Do not, I repeat, do not move toward the emergency exits. The safest place to be right now is on this airplane."

But people were shouting at me, asking questions I couldn’t answer. The captain had not yet arrived. I was shaking.

Then, as quickly as they had begun, the rain and violent winds subsided. The plane was no longer rocking, but conditions inside were anything but calm. Outside, the airport alarm had sounded, and within seconds firefighters were speeding across the tarmac. The gate agent ran down the jet bridge and asked me what I wanted to do.

Let’s get these passengers off the airplane through the jet bridge. This plane isn’t going anywhere right now, I said.

But my mind was racing.

What had just happened? How could this occur? My brain was having difficulty processing what I had just witnessed. I was soaking wet and numbed by the experience.

Accidents don’t just happen randomly, I thought. Or do they? There must be an explanation.

Slowly at first, then with greater clarity as time went by, the answers began to appear—not just in this plane crash, but in other catastrophes around the world, past and