Aviation

Availability Heuristic: Our Preference for the Familiar

May 27, 2023 By Nagesh Belludi Leave a Comment

Availability Heuristic: Our Preference for the Familiar and Readily Available Information The availability heuristic is a cognitive bias that can lead people to rely on readily available information or emotionally charged and inherently interesting examples when making decisions or judgments. Essentially, individuals tend to overestimate the probability of events that are easy to recall or that they’ve personally experienced, while underestimating the likelihood of less memorable or less frequent events.

In other words, the ease of retrieval of a misleading cue may make people rely on evidence not because it is dependable but because it is memorable or striking and thus psychologically available to them. They may do so even if the evidence is not logically acceptable or does not logically support their decision.

Doctors often depend on recalling their past dramatic cases and mistakenly apply them to the current situation. People may overestimate the crime rate in their community based on news coverage, even though crime rates may be relatively low. People may dismiss the reality of climate change if they’ve recently experienced a cold winter or heard of a cold snap in a particular region, even though global warming is a long-term trend. Individuals are more likely to purchase insurance after experiencing a natural disaster than before it occurs. In each of these scenarios, the vivid and emotional evidence feels more persuasive rather than it being the most accurate or reliable information.

The availability heuristic can also shape people’s perceptions of air travel safety and lead them to believe that flying is more dangerous than it really is. Airplane accidents are often sensationalized and highly publicized by the media, making them more memorable and more prominent in people’s minds. This can cause individuals to perceive the risk of flying much higher than it actually is, leading them to avoid air travel even though it is statistically one of the safest forms of transportation. In reality, many less vivid and less memorable (i.e., psychologically unavailable) things are much more dangerous than air travel, such as falling down stairs, drowning, choking, and accidental poisoning.

Avoid falling prey to the availability heuristic and making serious misjudgments about the risks associated with different situations. Acknowledge that personal experiences and recent events may not accurately reflect the overall reality of the situation.

“Fly the Aircraft First”

December 29, 2022 By Nagesh Belludi Leave a Comment

Attention Prioritization: Lessons from Eastern Airlines Flight 401 Today is the 50th anniversary of the Flight 401 disaster. I’ve previously cited how the crew of the ill-fated Eastern Airlines Lockheed L-1011 got so single-mindedly preoccupied with tackling a nose landing gear indicator light malfunction that they didn’t pay attention to the fact that their airliner was descending gradually into the Florida Everglades.

In summary, the pilots were too distracted to fly the aircraft. Human factors, specifically cognitive impairments, can precipitate distractions away from vital tasks.

The incident led to a breakthrough called Crew Resource Management (CRM.) This “human nature innovation” actively orients pilots to prioritize tasks in order of operational safety. The adage “Aviate, Navigate, and Communicate (A-N-C)” reinforces the ‘fly the aircraft first’behaviors until they’re internalized and become routine.

The top priority—always—is to aviate. That means fly the airplane by using the flight controls and flight instruments to direct the airplane’s attitude, airspeed, and altitude. Rounding out those top priorities are figuring out where you are and where you’re going (Navigate,) and, as appropriate, talking to ATC or someone outside the airplane (Communicate.) However, it doesn’t matter if we’re navigating and communicating perfectly if we lose control of the aircraft and crash. A-N-C seems simple to follow, but it’s easy to forget when you get busy or distracted in the cockpit.

Idea for Impact: “Fly the aircraft first.” Know when to set aside the seemingly important things to accomplish the more vital ones.

Innovation’s Valley of Death

December 20, 2022 By Nagesh Belludi Leave a Comment

Bombardier's CSeries Commercialization Failure: The Innovation Valley of Death The discovery and development of an invention are usually easier relative to the creativity and resources required to make it a commercial success. Indeed, many entrepreneurs and intrapreneurs struggle to commercialize their idea meaningfully—establish the idea’s marketability to prospective backers, engage potential customers, and price and promote their product or service for a favorable return on investment. Consider this case study of the Bombardier CSeries jets—fated for misfortune for many years only to morph into the successful Airbus A220 series:

As a country, we habitually underinvest in R&D. And, when domestic champions like Bombardier do emerge, they often prove unable to turn their great ideas into commercially successful, globally dominant businesses.

In a knowledge economy, a country’s future prosperity is increasingly tied to its ability to generate and capitalize on innovative new ideas.

“The paradox is that while there is innovation going on in Canada, we do not observe the same level of commercialization and ownership of those innovations [as in other countries]. In many cases, inventions developed in Canada are then commercialized by foreign companies that keep much of that benefit.”

Idea for Impact: Don’t let your idea fizzle because they can’t take your sizzle to market. Focus not just on overcoming internal barriers but also on how to commercialize your innovation. Hire outside capabilities if necessary.

Books in Brief: ‘Flying Blind’ and the Crisis at Boeing

September 24, 2022 By Nagesh Belludi Leave a Comment

Bloomberg investigative journalist Peter Robison’s thoroughly researched Flying Blind: The 737 MAX Tragedy and the Fall of Boeing (2022) offers noteworthy lessons about corporate responsibility and leadership problem-solving.

In a nutshell, starting in the late 1990s, Boeing shifted from a company run by engineers who emphasized product integrity to one run by MBA-types who prized shareholder value over long-term product planning. Inspired by General Electric’s Jack Welch, the company embraced cost-cutting, outsourcing, financial engineering, union-busting, and co-opting regulators. These miscalculated strategies culminated in the 737 MAX disasters and disgraceful corporate responses.

Recommendation: Read Peter Robison’s Flying Blind, but be wary of the author’s broad-brush political biases, which, I found, sidetracked from the storyline. The internal organizational tensions that led to corporate deception and the fateful consequences of federal regulators’ consigning design approvals to Boeing are particularly interesting.

Key Takeaway: Negligent engineering to minimize costs and adhere to a delivery schedule is a symptom of ethical blight.

Dear Customer, Speak Early and Have it Your Way!

September 12, 2022 By Nagesh Belludi Leave a Comment

Development of the Boeing 777 Program: 'Working Together' Initiative

At the heart of every successful product is the ability to address a real need or circumstance of struggle—a “job to be done”—in consumers’ lives. Identification of this “job” happens early in the innovation process, as it forms the core insight around innovation development and execution.

Feedback-Influenced Design is a Key Point of Differentiation

Long before its current mess, Boeing was once the pioneer in aspects of product development. No example illustrates Boeing’s inventive stills than the groundbreaking Boeing 777 program, particularly in its use of iterative, paperless computer-aided design, assembly process-planning, and agile product development. Not only that, the Boeing 777 program offers the most high-profile examples of companies tapping consumers as never before to help them create new products.

Knowing very well that the secret to long-term success starts very early in the innovation process, director of engineering Alan Mulally led a “working together” initiative to organize product development around customer input. (Mulally left Boeing after not being named CEO in 2006 and engineered a dramatic turnaround at Ford Motor Co.)

Alan Mulally: Boeing 777 Program's Director of Engineering and Later Vice-president and General Manager

Concept Testing at Every Stage of Development

In the late 1980s, just as the 777 program was being launched, Mulally made a consequential decision to involve its major potential customers in the development of the aircraft specifications. Mulally made up a “gang of eight” comprising All Nippon Airways, American Airlines, British Airways, Cathay Pacific, Delta Air Lines, Japan Airlines, Qantas, and United Airlines. At the group’s first meeting in January 1990, Mulally’s team distributed a 23-page questionnaire asking what each customer wanted in the design. Within two months, Boeing and the airlines decided on a basic design configuration.

The “working together” initiative was a radical departure from the bureaucratic project organization. Internally, Boeing had become bureaucratic and department-focused. Specialists in various departments would design their parts. Then, it was up to the manufacturing team (the system integrators) to figure out how to make it all come together. It was a “throw-it-over-the-wall” environment where the disconnect was a persistent problem.

Having customer input implied that development was centered on customer needs. This would also tear down the walls between departments—designers, suppliers, and assemblers usually separated by organizations or development phases would now be engaged collaboratively and talking and collaborating in real-time.

Boeing and the In an industry where manufacturers classically designed aircraft with only token customer input. Rather than presenting the market with what Boeing perceived as their idea of what was required, customers had direct input. Over the decades, the Boeing 777 became one of the world’s most successful commercial aircraft and continues to be the workhorse of many a customer fleet.

Idea for Impact: Create Something People Want

Whether selling products or services, fast food, or experiential travel, the most innovative companies organize their offerings around customers’ needs. From the very beginning, they tap consumers as never before to help them create new products, and they’re embedding customer knowledge into the business. Early and frequent feedback is one way to cope with the pressure for shorter product cycles and to be prudent about not investing time and resources in unpromising ideas. It also augurs well for the experiences-over-possessions shift in consumer values.

The Loss Aversion Mental Model: A Case Study on Why People Think Spirit is a Horrible Airline

August 11, 2022 By Nagesh Belludi 1 Comment

Why People Think Spirit is a Horrible Airline---Loss Aversion Mental Model

When Spirit Airlines pivoted to competing on price in the late 2000s, it quickly gained a reputation not only for operational inefficiencies but also for its in-your-face, take-it-or-leave attitude towards customer service.

Where other airlines charged by-the-package fares for the flight experience, Spirit pared back service and introduced an a la carte pricing model. Charging for the “ancillaries”—i.e., everything optional, including water—allowed Spirit to keep ticket prices down and appeal to price-sensitive travelers willing to sacrifice the usual amenities for a lower ticket price.

In the ensuing years, the unconventionality of this business model did not go down well with customers. Much of the flying public’s frustration with Spirit had to do with Loss Aversion. That’s the notion that the emotional disappointment of a loss is more extreme than the joy of a comparable gain. If finding a cheaper fare on Spirit felt delightful, giving up some—or all—of the savings to purchase ancillaries and surrender the savings felt utterly miserable.

Passengers felt ripped off by these seemingly hidden fees, especially when the true cost of flying Spirit ended up greater than what the initial ticket price led them to believe.

Spirit 101---Spirit Airlines Perception Problem Spirit became quickly convinced that there was a perception problem—its customers didn’t fully understand how its fares work. Particularly, first-time customers blindly presumed that Spirit Airlines works the same way as other airlines. In reality, there were no hidden or excessive fees, and passengers could only pay for what they need or want. In 2014, the airline introduced its “Spirit 101” campaign to educate customers and alter their perceptions. With time and the increased adaptation of the “Basic Fare” model and curtailed customer service by every other airline, passengers’ expectations have since been right-sized. Spirit Airlines has come a long way, and its customer service has improved vastly.

Further studies on loss aversion have shown that a cascade of successive fees is worse than the cumulative: i.e., three ancillary fees that add up to, say, $70, feel a lot worse than a single $70 fee. Appropriately, Spirit offers a “Bundle it Combo” package.

Nothing Unites Like a Common Enemy

December 14, 2021 By Nagesh Belludi Leave a Comment

On a recent Airlines Confidential podcast, former CEO of Airbus-America Barry Eccleston discussed how Airbus has grown over the years to dethrone Boeing as the world’s largest commercial aircraft maker.

Airbus began in the late 1960s as a consortium of pan-European companies connected by a shared crusade to counter American industrial prowess. Once aviation’s leaders in innovation, these European underdogs had been surpassed by Boeing, McDonnell Douglas, and Lockheed in the ’50s and ’60s.

Once Airbus got started and was standing on its own feet, the concept of ‘Beat Boeing’ became the Airbus mantra. Indeed, it brought together the French, the Germans, the Brits, and the Spanish. If you think about it, Europe had been trying previously to do joint venture programs successfully for quite a while, but most of them didn’t happen. But this one did. And, I believe, it happened, not solely, but in large part, because everybody rallied around a flag, and the flag was called Beat Boeing. Do you remember, in the old days, the Avis slogan was “We are number two, and we try harder?” That kind of like, was where we were at in Airbus. We knew we were number two; we knew we could become number one, and we tried harder.

Idea for Impact: Nothing unites a team like a common enemy. The adversary doesn’t have to be a person, a team, or a competitor. It can be a being-the-underdog mindset or an against-the-the-odds challenge. It can even be a system that has resisted change.

How to See Opportunities Your Competition Doesn’t

November 19, 2021 By Nagesh Belludi Leave a Comment

Harvard strategy professor Youngme Moon’s Different: Escaping the Competitive Herd (2010) describes how many companies pursue the same opportunities that every other company is chasing and thus miss the same opportunities that everyone else is missing.

In category after category, companies have gotten so locked into a particular cadence of competition that they appear to have lost sight of their mandate—which is to create meaningful grooves of separation from one another. Consequently, the harder they compete, the less differentiated they become … Products are no longer competing against each other; they are collapsing into each other in the minds of anyone who consumes them.

Moon argues that the companies and brands that see a different game win big. Such innovators don’t just try to outcompete their rivals at the margin. Instead, they redefine the competitive landscape by embracing unique ideas in a world crammed with me-too thinking.

European airline Ryanair unleashed a new wave of relentless cost- and price-leadership by charging customers extra for everything beyond a seat itself. If you want to check a bag, you pay extra. If you want an airport agent to check you in and print your boarding pass, you pay extra. If you want food and drink, you pay extra. Later on, Spirit Airlines took the price-obsession further by charging for carry-on bags too. After a rough rollout and customer defiance, paying for carry-on bags has become the new normal.

Idea for Impact: Being different is what makes all the difference. If you do things the same way everyone else in your field does things, why would you expect to do any better? What are you doing to raise your game—not just to stay in place, but to get ahead?

Many Hard Leadership Lessons in the Boeing 737 MAX Debacle

August 24, 2021 By Nagesh Belludi Leave a Comment

The U.S. House committee’s report on Boeing’s 737 MAX disaster makes interesting reading on contemporary leadership, particularly the pressures of rapid product development.

The rush to market and a culture of contributory negligence and concealment conspired to ensure that a not-yet-airworthy plane carried passengers into service, resulting in two fatal accidents and a long grounding.

Boeing’s design and development of the 737 MAX was marred by technical design failures, a lack of transparency with both regulators and customers, and efforts to downplay or disregard concerns about the operation of the aircraft.

Many Hard Leadership Lessons in the Boeing 737 MAX Debacle Of particular importance are the “management failures,” “inherent conflicts of interest,” and “grossly insufficient oversight” at both Boeing and its regulator, the Federal Aviation Administration (FAA.) Boeing failed to offset the design limitations and cost- and schedule-pressures in favor of attention to customer safety. Leadership was fixated on fending off the runaway success of the Airbus A320neo program.

The company relied on too many technical assumptions—and they couldn’t make themselves the space and time to be reasonable about any of this. Boeing’s “culture of concealment” and an “unwillingness to share technical details” are the report’s most damning indictment. Employees spoke but went unheard; indeed, their voices were suppressed.

Lessons from David Dao Incident: Watch Out for the Availability Bias!

August 23, 2021 By Nagesh Belludi Leave a Comment

In the weeks and months after the United Airlines’ David Dao incident and the ensuing customer service debacle, news of all kinds of disruptive airline incidents, coldblooded managers, and inconsiderate airline staff showed up everywhere.

The United incident raised everyone’s awareness of airline incidents. Expectedly, the media started drawing attention to all sorts of airline incidents—fights on airplanes, confusion and airports, seats taken from small children, insects in inflight meals, snakes on the plane—affecting every airline, large and small. However, such unpleasant incidents rarely happen, with thousands of flights every day experiencing nothing of the sort.

Lessons from David Dao Incident: Watch Out for the Availability Bias Parenthetically, the underlying problem that led to the David Dao incident wasn’t unique to United. The incident could have happened at other airlines. All airlines had similar policies regarding involuntary-denied boarding and prioritizing crew repositioning. Every other airline, I’m sure, felt lucky the David Dao incident didn’t happen on their airline.

In the aftermath of the incident, many people vowed to boycott United. Little by little, that negative consumer sentiment faded away while the backlash—and media coverage—over the incident diminished.

Availability bias occurs when we make decisions based on easy or incomplete ideas.

The David Dao incident’s media coverage is an archetypal case of the Availability Bias (or Availability Heuristic) in force. Humans are inclined to disproportionately assess how likely something will happen by how easy it is to summon up comparable–and recent–examples. Moreover, examples that carry a fierce emotional weight tend to come to mind quickly.

The availability heuristic warps our perception of real risks. Therefore, if we’re assessing whether something is likely to happen and a similar event has occurred recently, we’re much more liable to expect the future possibility to occur.

What we remember is shaped by many things, including our beliefs, emotions, and things like intensity and frequency of exposure, particularly in mass media. When rare events occur, as was the case with the David Dao incident, they become evident. Suppose you’re in a car accident involving a Chevy, you are likely to rate the odds of getting into another car accident in a Chevy much higher than base rates would suggest.

If you are aware of the availability bias and begin to look for it, you will be surprised how often it shows up in all kinds of situations. As with many other biases, we can’t remove this natural tendency. Still, we can let our rational minds account for this bias in making better decisions by being aware of the availability bias.

Idea for Impact: Don’t be disproportionately swayed by what you remember. Don’t underestimate or overestimate a risk or choosing to focus on the wrong risks. Don’t overreact to the recent facts.

Aviation

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Feedback-Influenced Design is a Key Point of Differentiation

Concept Testing at Every Stage of Development

Idea for Impact: Create Something People Want

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Wondering what to read next?

Availability bias occurs when we make decisions based on easy or incomplete ideas.

Wondering what to read next?