British Airways offers two flights a day from London City Airport to Kennedy International Airport in New York. The planes, two Airbus A318s, contain just 32 seats—all business class. From Westminster (roughly central London) it takes less than 35 minutes to get to London City Airport, the closest of the five airports that service London. With so few passengers, the BA flight boards in a few minutes—ideal for travelers who commute between New York and London.
Yet secretaries and corporate travel agents—business class tickets are rarely purchased by the traveler—typically book flights out of Heathrow or Gatwick. The reason is an example of “defensive decision making.” If something goes wrong at Heathrow or Gatwick—the busiest of the five London airports—it’s the fault of the airlines or the airport. Not so at London City Airport. By selecting the unusual option, secretaries and corporate travel agents risk getting blamed for a delay, so they simply stick with the status quo.
A few months ago, Rory Sutherland, the vice-chairman of Ogilvy Group UK, spoke to Brighton Business School about defensive decision making, citing flights out of London City Airport as an example. We opt for the safe and justifiable option, especially at work, to protect ourselves if something goes wrong, even when a superior option is available. Just as legal ramifications influence the decisions of doctors, people in business make decisions that may not benefit the company but guarantee that they won’t get into trouble.
Like Sutherland, I worry that the rise of big data could worsen the problem of defensive decision making. Viktor Mayer-Schonberger and Kenneth Cukier, co-authors of Big Data: A Revolution That Will Transform How We Live, Work, and Think, expound the ways big data is improving business. In the media, data determines the content on popular sites like Huffington Post and Buzzfeed; compared to writers and editors, it’s is more effective in terms of racking up pageviews. The-Numbers.com uses data to predict the income of movies by considering budget, genre, cast and crew. It’s a valuable resource for big blockbusters than run the risk of losing millions. (Remember John Carter and The Lone Ranger?)
No doubt, big data is an exciting new genre of economic output. But innovation emerges from what data does not reveal—from what people don’t talk about. Henry Ford famously quipped that customers would have demanded faster horses. Big data, if it existed at the beginning of the 20th century, would have never recommended cars. That took the human mind. Imagine executives, middle managers, or data scientists deciding between what the data says and advocating a potentially innovative position that the data does not support. With your job on the line, which would you pick?
Defensive decision making is costly, which makes this question all the more pressing. In one study, decision making researcher Gerd Gigerenzer asked 36 executives how often they picked the second-best option to protect themselves, instead of advocating for what they believed was best. A dozen managers admitted a few defensive decisions, and a third said half of their decisions were defensive. As Gigerenzer writes in his new book Risky Savvy, “defensive decisions are not a sign of strong leadership and positive error culture”—essential traits of a healthy business.
“In a world of big data, it is our most human traits that will need to be fostered—our creativity, intuition, and intellectual ambition—since our ingenuity is the source of our progress,” Mayer-Schonberger and Cukier conclude. This paradox puts leaders in a difficult position. Do I go with the innovative idea that’s impossible to justify? Or do I make a safe bet and go with the data? The future of a company might depend how its leaders approach this question.