I hope this email finds you well! First and foremost, I want to express my sincere gratitude for the overwhelming support in the recent voting for a book title and who suggested case studies. Your input and engagement have been incredibly valuable, and I'm thrilled to have you as part of this journey.
As a thank you, I would like to express my appreciation by sharing an exclusive chapter from the book with you. This chapter delves into the story of the Titanic from a rarely discussed perspective that gives rise to a concept known as the 'Titanic Effect.' I'm confident that you will find this chapter both enlightening and engaging.
Before we dive into that story, although I'm very close to wrapping up the book of risk management stories, I would still welcome any case study suggestions.
Based on the votes so far, there is a clear winner. You can vote and see the likely title of the book of risk management stories at this link.
In the book, I aim to share valuable tips and tricks that will immediately impact and foster a shift in your perception of risk management. The aim is to empower you to believe in the possibility of transformation and equip you with practical steps to take action.
As the book comes together, it reveals some compelling case studies and offers fundamental teachings you can practice immediately. It's crucial to me you derive genuine value from our interactions, and I'm committed to delivering content that brings about tangible change.
With my 30 years of background in risk management models, I've been taking a fresh look at some well-known stories. The themes that emerge are sadly familiar, but there are layers to be teased out from even the most familiar tales - that's a hint about the likely title, by the way.
The warning signs from most disasters go back many years, as do the positive risk-taking that built global business empires like Microsoft, Apple, Google, and Ford Motor Company.
Thank you once again for being an integral part of this journey. I hope you enjoy the exclusive chapter and find inspiration there. Stay tuned for more updates, where we'll continue our exploration of risk management stories and strategies.
Wishing you a fantastic day ahead!
On the cold, dark night of April 14, 1912, the RMS Titanic embarked on its maiden voyage from Southampton, England, bound for New York City. The ship was the largest and most luxurious ocean liner of its time, and its passengers were a mix of wealthy business executives, socialites, and immigrants seeking a new life in America.
Captain Edward Smith was in command of the Titanic, and he was widely considered one of the most experienced seafarers of his time. However, as the Titanic sailed across the Atlantic Ocean, a series of human factors and errors would combine to lead to its tragic fate.
One of the key factors contributing to the sinking of the Titanic was the lack of communication and coordination among the ship’s crew. Despite carrying over 2,000 passengers and crew, there was no comprehensive plan in place for dealing with an emergency. The ship’s officers and crew were not properly trained in emergency procedures, and there was no clear chain of command for dealing with a crisis. This lack of communication and coordination would ultimately lead to confusion and chaos as the ship began to sink.
The confidence in the inability of a risk to eventuate can actually increase the chance of it happening, particularly if risk factors are not independent of each other or are correlated.
Another key factor contributing to the sinking of the Titanic was the lack of attention to safety and risk management. The ship’s designers and builders had not adequately considered the potential risks posed by icebergs, and the ship was not equipped with enough lifeboats to accommodate all of its passengers and crew. The ship’s officers and crew also failed to adequately monitor the ship’s course and speed, and they did not heed the warnings of other ships in the area about icebergs. As a result, the Titanic was sailing too fast and too close to the icebergs, and it was unable to avoid a collision when it encountered one.
As the Titanic took water, its passengers and crew faced a terrifying and chaotic situation. Many of the ship’s lifeboats were launched with only a fraction of their capacity, leaving hundreds of passengers stranded on the sinking ship. Some passengers, such as Molly Brown and John Jacob Astor, were able to escape in the lifeboats, but many others, including Captain Smith, were not so lucky. They were trapped on the sinking ship, and most would ultimately lose their lives in the icy waters of the North Atlantic.
The story of the Titanic is a tale of a tragic and avoidable disaster, resulting from a series of interconnected human factors and errors. The ultimate cause of the Titanic disaster must lie with the poor seamanship of the Captain. Sailing into a known iceberg field on a moonless night was unwise. But it was not the only factor. The lack of communication and coordination among the ship’s crew, the failure to adequately consider safety and risk management, and the inability to respond effectively to the emergency all contributed to the sinking of the Titanic.
The insufficient number of lifeboats and lack of drills can also be explained away if your risk analysis is based on the boat being ‘unsinkable’.
In his book The Titanic Effect, Kenneth Watt defined a related phenomenon where major incidents are often preceded by a belief they cannot happen. The confidence in the inability of a risk to eventuate can actually increase the chance of it happening, particularly if risk factors are not independent of each other or are correlated.
At face value, all the failures of that fateful night may appear independent. When we look a little closer, the incorrect engineering analysis about the safety and unsinkability of the Titanic resulted in overconfidence about its unsinkability. This unsinkability myth is likely to have contributed to the excessive speed and the lack of a proper watch.
The insufficient number of lifeboats and lack of drills can also be explained away if your risk analysis is based on the boat being ‘unsinkable.’ This myth of unsinkability meant that the Titanic's designers didn't see the need for 'wasting' valuable deck space with unnecessary clutter like lifeboats.
The additional pressure from the ship’s owners to establish the brand by setting a speed record for the crossing and to do so on a maiden voyage would only have compounded things. With the boat being perceived as unsinkable, the risk/reward equation of setting a speed record was fundamentally changed.
The collision occurred at night, making it difficult to spot the iceberg and abandon the ship. It was yet another factor that explained why the nearby ship’s operator was asleep.
The Titanic Effect also implies the inverse proposition. The magnitude of disasters decreases to the extent that people believe disasters are possible and plan to prevent them or minimize their effects. In the words of James Richards, “Future events are not independent like random coin tosses. They are influenced by what precedes them.”
At the organizational level, there were also several factors that contributed to the disaster. The owners of the Titanic, the White Star Line, were under pressure to set a speed record on the ship’s maiden voyage. This pressure may have led to a lack of proper planning and risk management, and may have contributed to the decision to maintain a high speed despite the ice warnings.
At the technical level, the Titanic was designed and built, with several flaws and weaknesses that made it vulnerable to sinking. For example, the ship was not equipped with enough lifeboats to accommodate all the passengers and crew, and the watertight compartments were not designed to withstand the damage from an iceberg.
Overall, the sinking of the Titanic can be seen as a tragic example of the Titanic Effect, in which overconfidence and a lack of planning and risk management led to a devastating disaster. The lessons learned from the Titanic and the Titanic Effect continue to be important today and serve as a reminder of the need to be prepared for the unthinkable and to prevent or minimize the impact of disasters.