Most of us are familiar with the metaphor of the downward spiral for swift and sure failure. It’s received an abundance of air and screen time amid the current economic crisis. In an extremely thought provoking and enjoyable post, the Epicurean Dealmaker not only describes the mechanics of the real life aeronautical disaster, but also makes the audacious (if not entirely facetious) argument that CEOs’ skills ought to be tested before being handed ridiculous amounts of power and more money than most of us will ever encounter. (I’d say this is especially true if the taxpayers are paying their salaries.)
He describes the graveyard spiral:
…usually happens when a pilot loses sight of the visual horizon and enters a gradual turn. After 20 seconds or so, the pilot loses all sense that he is turning, but rather feels that the plane is descending in a gradual straight line. If the pilot does not consult his instruments to check whether he is indeed level or in a turn, he will likely try to pull out of the dive by pulling back on the stick and applying power…. The right thing to do instead, apparently, is cut the throttle to reduce acceleration, check your instruments, and gently turn out of the spiral. This will feel weird, but the point is that you have to trust your instruments, not your gut, the seat of your pants, or your inner ear.
In other words, you must have a solid foundation of skills in order to maneuver a difficult situation.
The flying metaphor is extended to the management of Bear Stearns, Lehman Brothers, and others, whom he characterizes as amateurs taking lives in hand.
Give them a clear, cloudless day, gentle supporting thermals, and no other traffic in the sky, and these panjandrums were more than capable of piloting their tricked-out Cessnas the five hours from Reno to Orange County. They got paid ridiculous amounts of money for flying under perfect conditions, too, almost as if they were personably responsible for the favorable weather. But put them over unknown terrain, in fog, cloud cover, or at night, and let them drift into a gentle turn, and they fell apart. They had neither the sensitivity to tell when they were drifting into trouble nor the training and skill to recover from it.
Although I haven’t been reading his blog long enough to know if he’s serious about his proposed federally mandated ‘Financial Institutions Piloting’ course I am all for a system that identifies highly intelligent people, trains them, and then places them in real life positions of increasing responsibility before handing over the reigns to our economy. I don’t know what kind of credentials these financial CEOs possess, but they’re obviously lacking some crucial skills. Or is it ethics? Either way – I know it sounds old fashioned, but it seems to me that better, more experienced pilots tend to pull off smoother landings.
Thanks for the post, Dealmaker.