Facing Ambiguous Threats

On February 1, 2003, the world watched in horror as the Columbia space shuttle broke apart while reentering the earth's atmosphere, killing all seven astronauts. Some have argued that NASA's failure to respond with appropriate intensity to the so-called foam strike that led to the accident was evidence of irresponsible or incompetent management. The authors' research, however, suggests that NASA was exhibiting a natural, albeit unfortunate, pattern of behavior common in many organizations. The foam strike is a prime example of what the authors call an ambiguous threat--a signal that may or may not portend future harm. Ambiguous threats differ from threats with obvious causes--say, a fire in the building--for which the response is clear. They also differ from unmistakable threats that may lack straightforward response paths (such as the frightening oxygen-tank explosion aboard Apollo 13). However, when the warning sign is ambiguous and the threat's potential effect is unclear, managers may choose to ignore or discount the risk. Such an approach can be catastrophic. Firms that do a good job of dealing with ambiguous threats do not improvise during a crisis; rather, they apply a rigorous set of detection and response capabilities that they have developed and practiced beforehand. In this article, the authors outline how to put such capabilities in place long before a crisis strikes. First, companies need to hone their teamwork and rapid problem-solving skills through practice. Second, they must learn to recognize weak signals, amplify the threat, and encourage employees to ask disconcerting "what if" questions in a safe environment. Finally, they should explore possible responses to threats through quick, low-cost experimentation.

• Risk analysis