Behaviour drives performance | Wijnand Nuijts | TEDxFrankfurt

Summary

This script recounts the 1977 Tenerife airport disaster, highlighting how human factors and organizational hierarchy contributed to the tragedy. It then pivots to financial supervision, emphasizing the importance of understanding and influencing behavior within organizations to enhance performance and prevent crises. The speaker discusses tools like 'Board effectiveness' and 'Change effectiveness' to assess leadership, decision-making, and cultural impacts on risk management. The narrative underscores the significance of a non-normative approach, focusing on the contribution of behavior to prudent management and ethical conduct, and the role of trust in effective supervision.

Takeaways

• 🛫 The 1977 Tenerife airport disaster highlighted the dangers of human factors in aviation, emphasizing the need for clear communication and hierarchical respect within the cockpit.
• 🌫 Poor visibility and communication led to a catastrophic collision, showing the critical role of environmental conditions and air traffic control in flight safety.
• 📉 The 2008 financial crisis underscored the importance of integrating behavioral perspectives in economic analysis to enhance financial firm stability.
• 🔍 Behavioral patterns at the top of organizations can significantly influence performance and must be examined to prevent issues like the financial crisis.
• 🔧 The development of methodologies like 'Board effectiveness' and 'Change effectiveness' aims to identify and understand the impact of leadership and organizational behavior.
• 🤝 A non-normative approach to behavior encourages individuals to reflect on their actions and adjust patterns to contribute positively to management and ethical behavior.
• 🏦 Supervisory findings often reveal boards not challenging proposals or discussing risks, leading to decisions without proper scrutiny and potential damage.
• 🔄 Ineffective change management can result from superficial efforts or a lack of credibility, hindering true transformation within an organization.
• 👥 Dominant leadership styles can stifle board-level challenge, creating an environment where decisions may be postponed or conflict arises.
• 👥 Followers' conformity to groupthink can suppress dissenting opinions, even when they recognize the majority view as incorrect.
• 💡 Trust is a fundamental element in the supervision of behavior and culture, allowing for open reflection and improvement without fear of punishment.

Q & A

What was the situation in the cockpit of the KLM Jumbo Jet in 1977 at Tenerife Airport?

In 1977, the KLM Jumbo Jet was on the runway at Tenerife Airport with mounting pressure in the cockpit due to fatigue and impatience. The crew had been waiting for a long time in bad weather with poor visibility and malfunctioning air traffic control systems. They were unaware of another plane on the same runway, which led to a major aviation disaster.

Why were the junior flight engineer's warnings about the presence of another plane on the runway dismissed?

The junior flight engineer's warnings were dismissed by the Captain due to the Captain's higher rank and the hierarchical structure within the KLM organization. The junior engineer's influence was easily overlooked, which contributed to the accident.

What were the main findings of the analysis after the Tenerife airport disaster?

The analysis revealed that the accident was caused by a combination of structural and human factors, highlighting the need to address these issues to improve aviation safety.

How did the financial crisis of 2008 influence the approach to economic analysis?

The financial crisis of 2008 led to a dominant focus on economic analysis, with the understanding that human factors, behavior, and culture could significantly contribute to organizational objectives, particularly in enhancing the financial strength of financial firms.

What are the three simple ideas that the methodology for behavioral perspective in supervision is based on?

The methodology is based on three ideas: 1) Behavior drives performance, 2) Understanding the behavior of individuals in organizations is crucial, and 3) Integrating a behavioral perspective in supervision can help prevent and solve problems.

What is the purpose of the 'Board effectiveness' instrument used in supervision?

The 'Board effectiveness' instrument is used to examine boards and understand their behavioral patterns. It looks at leadership styles, the participation in discussions, and the ability to bring perspectives forward, which are crucial for prudent management and decision-making.

How does the 'Change effectiveness' instrument contribute to organizational performance?

The 'Change effectiveness' instrument assesses an organization's ability to successfully transform its business model, organization, or culture to adapt to new circumstances, which is vital for sustained performance.

What is the approach of the supervisory body when examining the relationship between reward and risk?

The supervisory body examines how traders deal with the relationship between reward and risk, looking at their personal values and mindset, as well as how the group culture might impact their personal decision-making.

Why is trust an essential element in the supervision of behavior and culture?

Trust is crucial because without it, individuals may not feel comfortable reflecting on their own behavior or engaging in constructive dialogue. Building trust involves explaining the supervisory process, ensuring objectivity, and demonstrating openness to feedback.

How do supervisory findings relate to the way institutions deal with change?

Supervisory findings often reveal obstacles to effective change, such as superficial implementation of new behaviors or a lack of credibility in change efforts, which can result in incomplete transformation and potential organizational risks.

What is the role of a multidisciplinary team in the supervision of behavior and culture?

A multidisciplinary team, including governance specialists, change management specialists, and organizational psychologists, brings diverse expertise to the supervision process. This team is open to challenge and willing to learn from others, enhancing the effectiveness of the supervision.

What is the significance of the supervision of behavior and culture in financial institutions?

The supervision of behavior and culture in financial institutions is not a magic pill but a crucial component in financial supervision. It contributes to better decision-making, respect, cooperation, and mutual trust, and is most effective when combined with other forms of supervision.