Behaviour drives performance | Wijnand Nuijts | TEDxFrankfurt
Summary
TLDRThis 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.
Outlines
🛫 Aviation Disaster and Organizational Behavior
The first paragraph discusses the 1977 Tenerife airport disaster involving a KLM Jumbo Jet, highlighting the impact of fatigue, impatience, and poor visibility on the crew's decision-making. It emphasizes the dismissal of the junior flight engineer's warnings due to hierarchy, leading to a catastrophic collision with another plane. The analysis of the incident revealed a combination of structural and human factors, prompting measures to improve cockpit interactions and enhance aviation safety. The paragraph also touches on the 2008 financial crisis, suggesting that a behavioral perspective could have contributed to better organizational outcomes and financial strength.
🔍 Supervision of Behavior and Culture in Organizations
The second paragraph delves into the supervision of behavior and culture within organizations, particularly in the financial sector. It outlines the development of methodologies to examine leadership styles, decision-making processes, and the ability to adapt to change. The paragraph highlights the importance of challenging dominant behaviors and the risks associated with a lack of scrutiny in decision-making. It also discusses the role of trust in supervision, the use of multidisciplinary teams, and the necessity of building trust to encourage self-reflection and authentic behavior among individuals under supervision.
🤝 The Impact of Behavior on Performance and Cooperation
The final paragraph emphasizes the role of behavior in driving performance and the influence of organizational culture on decision-making. It discusses the supervisory approach to behavior and culture, including the use of traditional instruments and direct observations to identify behavioral patterns. The paragraph stresses the importance of trust in building cooperative relationships with financial institutions and the contribution of human factors to constructive decision-making processes. It concludes by stating that supervision of behavior and culture is not a standalone solution but should be combined with other aspects of financial supervision for maximum effectiveness.
Mindmap
Keywords
💡KLM Jumbo Jet
💡Air Traffic Control
💡Behavioral Impediments
💡Organizational Culture
💡Board Effectiveness
💡Change Effectiveness
💡Risk Management
💡Dominant Leadership
💡Groupthink
💡Supervision of Behavior and Culture
💡Trust
Highlights
In 1977, a KLM Jumbo Jet crash at Tenerife airport was a result of a combination of structural and human factors.
The crash was influenced by fatigue, impatience, bad weather, and poor visibility.
The junior flight engineer's warnings were dismissed due to hierarchy and seniority.
Behavioral impediments can significantly impact aviation safety.
The 2008 financial crisis led to the exploration of how human factors could contribute to organizational objectives.
Behavior drives performance, and integrating behavioral perspectives in supervision can prevent and solve problems.
Examinations are performed to identify behavioral patterns, particularly in top organizational levels.
Board effectiveness and change effectiveness are instruments used to analyze leadership styles and organizational adaptability.
The relationship between reward and risk, along with personal values and mindset, is crucial for decision-making.
A non-normative approach is taken, encouraging self-reflection on behavior and its impact.
No single superior culture is assumed; each culture has its virtues and risks.
Behavior must always contribute to prudent management and ethical behavior.
Supervision of behavior and culture involves identifying risks and promoting cooperation with financial institutions.
Boards often do not challenge proposals or discuss risks, leading to decisions without proper scrutiny.
Dominant leadership styles can hinder open discussion and create conflict within organizations.
Followers may conform to the majority even when they know the position is wrong due to fear of group scorn.
Change efforts are often superficial and not completed, leading to ineffective transformation.
Supervision of behavior and culture includes traditional instruments, behavioral observations, and multidisciplinary expertise.
Building trust is essential in the supervision process, ensuring objective and verifiable judgments.
The supervision of behavior and culture aims to contribute to better decision-making and mutual trust.
Behavioral supervision is not a magic pill but should be combined with other methods for effective financial supervision.
Transcripts
[Applaus]
in
1977 a KLM Jumbo Jet was Standing on a
Runway on tener airport in the cockpit
The Pressure was mounting The Crew had
been Waiting For quite a while and
fatigue and impatience was Kicking in
the airport was extremely busy There Was
bad weather Air Traffic Control Systems
work well and the visibility Was very
Poor and as a result The Crew did not
know that was other plane Standing on
the same Runway from Which The KLM Jet
Wanted to take
off Only The Junior flight engineer was
aware of that yet his warnings were
dismissed by the Captain due to
seniority and
hierarchy not Only was the Captain In
The Upper Ranks of the KLM organization
he also
Jer as Wars Junior flight engineer Dis
Easily and did not really influence The
Decision of the Captain to take
off and Just Before The Wheels Of The
KLM plane lifted from the Runway It
crashed into Another plane that Same
plane that was Still
Standing and it caused one of the major
Aviation disaster in history causing
enormous amount of
casualties exposed analysis revealed
that this terrible accident was caused
by a Combination of structural and human
factors and Following this
analysis
interaction measures were taken to
influence the interactions Within The
cockpit thereby trying to diminish the
influence of behavioral impediments such
as High
of Aviation
Safety The financial crisis Hit The
World In 2008 economic analysis was ini
dominant two of my colleagues wonder The
Human fact demst
absent
perspective Behavior and Culture could
contribute Our organizational objectives
Being enhancing The financial Strength
Of financial
firms and a couple of Years later and
Still after continuous development of
our methodology It is still based on
three very Simple ideas The First One is
is that Behavior drives
Performance the second
isan
Of
behi The Third was If are able
to integrate this behavioral perspective
in in supervision we Might be able to
better prevent and Maybe also solve
problems The Question Is How do We Get
More grip on behavioral patterns through
supervision the answer is we perform a
lot of examinations we try to identify
behavioral patterns mostly in the top of
the organization and we try to Figure
out what the Effects of these patterns
are And To do this we have designed
several Instruments one of them is the
instrument called Board effectiveness we
Look at boards and we try to get a grip
on Their behavioral patterns so we Look
for example at leadership
Styles dominant CEO negle The input of
others leadership
facs participate in discussions and
Bring perspectives
forward but we also Look at whether Or
Not institutions are capable of
successfully transforming Their business
model Their organization or Their
Culture for adapting To New
circumstances is Vital for sustained
Performance And For This we use Our
instrument Which We Call Change
effectiveness In Our R Culture ass we
How traders
deal relationship between reward and
Risk we want to know Their personal
values we want to know Their personal
mindset and we also Look at how the
Culture of the Group Might impact Their
personal Decision
making n Let Me emphasize That We Are
Not normative In Our approach We Do Not
pres How to behave Under All
circumstances
Nor do we work with checklists with
prefin criteria for good and bad
Behavior
to reflect on Their Own Behavior to see
what the impact of that Behavior is and
to adjust that patterns If
necessary and we do not work on this
assumption either that There is Only One
Superior Culture each Culture May have
Its virtues yet also Own risks and as a
supervisor we to identify Ris
them and SP of this all we do not have a
tot Neutral View on
Culture in our opinion Behavior must
Always contribute to prudent management
or ethical Behavior When we see that
institutions Take excessive risks or
display une ethical Behavior We will use
Our Powers to Fight against
that Let Me Some examples of what we
encountered in the supervision of
Behavior and
Culture what we Often see is that boards
do not really Challenge proposals that
they do not really discuss risks or
alternative
options as a results decisions are Often
taken Without proper scrutiny causing
damage to the institution and Its
customers Now this May have various
Reasons There May be structural Reasons
for example that the rules roles and
responsibility Between The Decision
Makers Are diffused
behavioral Reasons this insufficient
Challenge Board
level First of ambitious growth
strategy this create Minds
in aim
profit
man level entire organizations May
suffer From The Pressure of overly
ambitious
strategies dominant leadership Might be
Another Reason insufficient Challenge at
Board level because It frighten others
to speak up and to
share dom leadership
sty
leip ex Fair leadership
sty Fair leadership Styles CA urgent
decisions to be postponed and creates
room for interpersonal conflict and this
May result in
indecis or even distorted
cooperation in Challenge May Not Only be
the Cause Of Those Who lead also Those
Who
follows followers May be subject
ex
cons They assume very Easily The
position that is the Majority of the
Group even even when they know that that
position Is Wrong yet The Fear of Being
scorned by the Group prevents Them from
bringing Their Own
opinion other supervisory findings That
We have relate to the way institutions
Are dealing With Change And firms
encounter many
one of them
isu
What man employees in a new situation in
terms of New
Behavior as a result change is Often
superficial and is not really completed
Until The End and Another obstacle For
effective Change
Isard
lelan that mayed as Sign that This is
All In The End the result Might be that
the change effort is not really credible
and not really
finished how do we perform The
supervision of Behavior and Culture
These w The findings how do
weing we use Combination traditional
Instruments
level as levels immediately Below see
behavioral patterns levels
Are we also perard observations is new
appro we sit inard meetings to observe
the Dynamics with the
Group
Experience that meetings res
Natural Another very element in the
supervision of Behavior Culture is Trust
If is no Trust
Bet her experiences his personal
experiences with supervisor reflect on
Their Own Behavior and wey to start
building Trust by extens explaining What
We Will Be Doing That We will not put
Them on a Sofa to dig into Their past
but that We will Look at behavioral
patterns at the level of the Group so
not the individual level but the Group
level and furthermore we try to build
Trust by explaining That We will not
punish Them If goes wrong It's
rendering objective and verifi Judgement
this wef
expertise we multidisciplinary Team not
Only including govern specialist change
management specialist also Train
organizational
psychic
That We also Willing to challeng
ourselves That We Are open to the com of
others That We Are Willing to
Len We Started The supervision of
Behavior and Culture a couple of Years
AG I Had no
ide
People Under Pressure when they Feel
threatened They Often Lose Their
authentic Way of doing things They do
not see others as equal Partners Often
Only as obstacles to realizing Their
goals through the supervision of
Behavior and culture I to contribute to
cooperation with financial institution
introduce
Human financial
Organ
thats constructive Decision making
processes not Only contributes to better
decisions but also contributes to
respect cooperation and mutual
Trust summing up in four points Behavior
drives
Performance Organ
ofi
idavi influence institutions do
about Final com the f Point it's not
that this Type Of supervision is a magic
Pill that cures automatically cures
alls
isci structural pers that is of in
financial
supervision It is effective not in
Isolation but Only in Combination and
the reason for that is Simple because
two Is Always stronger than One thank
[Applaus]
you
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