Looking for the Next Black Swan Instead of Chasing the Last One - Vicki Bier University of Wisconsin

Looking for the Next Black Swan
Instead of Chasing the Last One

           Vicki Bier

    University of Wisconsin

Looking for the Next Black Swan
• Anticipate adverse events that are not
getting attention.
• Take potential black swans seriously.
• Manage the risk of black swans.

Anticipating Adverse Events
      That Are Not Getting Attention
• Identify events that bring lots of energy
together with lots of people.
• Focus on “existential threats.”
• “Garden variety terrorism…does not
constitute an existential threat.”

Was September 11 Unimaginable?
• Attempted jet attack on Eiffel Tower.
• Employee tried to crash a plane into HQ
of Federal Express.
• Hijackers caused triple-digit death tolls.
• Suicidal pilots crashed jets in the 1990s.
• Terrorists tried to destroy U.S. jets.

Taking Black Swans Seriously

• Pathological safety culture:
   •Messengers are “shot.”
• Bureaucratic safety culture:
   •Messengers are compartmentalized.
• Generative safety culture:
   •Messengers are encouraged.

Taking Black Swans Seriously
• Bureaucratic organizations:
   • Highly susceptible to “overload”.
   • Take on tasks that they can’t do well
   (e.g., NASA before Columbia disaster).
• Generative organizations:
   • Are alert for early signs of trouble.
   • Even warnings coming from outsiders.

Columbia Space Shuttle

• NASA had an impossible mission:
   – Operate safely with a difficult technology and an
     inadequate budget
• Main lesson learned after Challenger:
   – Heed early warning signs of problems
   – Avoid “normalization of deviance”
• NASA could not AFFORD to do this:
   – Did not have enough money to fix its problems!
• Bureaucratic organizations:
   – Highly susceptible to “overload”
   – Take on tasks that they can’t do well

Columbia Space Shuttle

• Furthermore, preservation of budget required
  good public relations:
  – Schoolteachers in space
  – Science experiments for grade schools
• This required NASA to give “illusion” of safety

Design for Safety

• “Organizational culture” has at least as much
  effect on risk as design of components,
  subsystems, software!
• Examples:
  –   Nuclear power
  –   Railroad safety
  –   Space shuttle
  –   Gulf oil spill

Davis-Besse Nuclear Power Plant

• In March 2002, workers detected severe
  degradation of the reactor vessel head
• The degradation had gone on for years
• Leakage from the reactor vessel head flanges
  and nozzles had become a chronic problem,
  releasing boric acid
• A modification to improve the ability to
  inspect had been indefinitely deferred

Davis-Besse Cavity

Davis-Besse Nuclear Power Plant

• Many plants experienced problems with boric
  acid corrosion:
  – The NRC required a control program
• Nevertheless, rust stains and deposits were
  dismissed as coming from flange leakage:
  – Rust also caused fouling, filter plugging

Davis-Besse Nuclear Power Plant

• The staff “stumbled” onto the problem in the course
  of another repair:
   – When one of the nozzles “leaned over”
• Corrosion of the reactor vessel head had taken place
  from the outside:
   – Stopped when it hit the stainless steel liner
• The degradation covered about 30 square inches:
   – Removed about 70 pounds of material!

Davis-Besse

• Well known technical weaknesses caused reactor
  vessel head nozzle cracking
• The cracking allowed corrosive boric acid to attack
  the reactor vessel head
• Leadership defects caused:
   – Weak and ineffective protective measures
   – Missed opportunities to find the problem early

NRC Perspective

• The responsibility rests on the organization’s
  leadership:
   – To establish priorities
   – To make the commitment to safety real
   – To create a climate in which such a commitment
     can flourish

Railroad Safety

• Organizational culture adversely affected safety after a merger
   – 3 fatal accidents and 7 fatalities in 7 months after the Union
     Pacific/Southern Pacific merger
   – “Union Pacific’s by-the book culture clashed badly with Southern
     Pacific’s, …making do with chewing gum and baling wire”
       • (Peter Passell, 1998, New York Times)

Gulf Oil Cleanup
• “Most of BP's production and pipeline employees in the USA have
  attended at least one booming school. Many have attended two or three…
  BP's production employees have attended the best booming schools. I
  know this. I've seen them there.”
• “BP's drilling folks have mostly not attended booming school… Because for
  Drilling Hands, booming is for pussies. This is a generalization. Not all
  drilling hands think that…”
• “I guarantee BP's drilling executives think that booming is for pussies --
  and that's if they think about booming at all or even know what it is…”
    – http://www.dailykos.com/story/2010/5/11/865387/-Fishgrease:-DKos-Booming-School

Gulf Oil Cleanup
“…if you understand it, and all these production employees understand it
(we're talking tens of thousands of people here), then why is most or all of
the booming along the Gulf... being done wrong?”
1. “The booming is being run by a company that concentrates on drilling
     and booming is for pussies. Production employees were not invited
     because they would just cause trouble. This is a drilling operation…”
2. “There's not enough boom, rope nor anchor on this planet to properly
     boom the Northern Gulf of Mexico. There should be! It's not that much
     an expense! Really! It's not! They said they were ready!”
3. “…you can just lay a single line of…orange boom out parallel to the shore,
     for miles, with anchor points every quarter-mile to where a good part of
     it washes up onto the shore… Where it manages to stay off the bank, a
     little two-foot chop… will send all the oil either over or under it! …So
     what!”

Why the Problem Is Difficult
• There is no one “right” management style, corporate culture,
  or organizational structure.
• Rather, the various elements must be consistent with each
  other and the external environment.
• Example--Admiral Rickover’s nuclear navy:
   – Rickover’s management style is not recommended!
       • Dictatorial, capricious, etc.
   – But, it combined inspirational leadership, hand-picked personnel,
     coherent goals, attention to detail, technical expertise, etc.
       • And achieved superlative performance!

Managing the Risk of Black Swans
• Black swans are inherently rare:
   •Can’t defend against every eventuality.
• Need overarching forms of protection:
   •Emergency preparedness, intelligence,
   border security, public health, etc.
   •All-hazards protection.

Role of Probabilistic Risk Analysis (PRA)
• PRA can be used to inform decisions and priorities.
• PRA enables the exploration of “what if …” scenarios.
• PRA encourages the generation of alternatives.
• PRA avoids the “problem-of-the-week” syndrome:
   • By putting new concerns (e.g., the fire at Browns
   Ferry in 1975, or the tsunami at Fukushima in 2011)
   into perspective with other risks.