The MacWhirr Syndrome

Even accessible and level-headed politicians and senior executives occasionally take ill-considered and unnecessarily risky decisions.  Why is this?

The answer to this question is personified by Captain MacWhirr in Joseph Conrad's Typhoon who chose to sail straight through a devastating storm because he recognised that his employers would criticise him for delaying their cargo if he sought to sail round it:

"Suppose", he says, "I went swinging off my course and came in two days late, and they asked me 'where have you been?' 'Went round to dodge the bad weather,' I would say. 'It must have been dam' bad, they would say. 'Don't know,' I would have to say, 'I've dodged clear of it.'"

The armed forces have often taken similar decisions:-  illogical verging on crazy in the view of outside observers but logical in the eyes of the decision-maker.  

Andrew Lambert, discussing the 1812 loss of HMS Guerriere and the deaths of 21 seamen, noted that "Facing an opponent 50% more powerful in guns, tons and men, [the captain's] only hope of avoiding defeat lay in running away, a tactical choice that would have seen him cashiered, or shot." But the classic case was perhaps the sinking of HMS Victoria in 1893 with the loss of 358 lives, following a collision which resulted from Admiral Markham following an order which he knew to be catastrophic. As another admiral wrote some time later: "Admiral Markham might have refused to [obey the order but he would] have been tried by court martial, and no one would have sympathised with him as it would not have been realised that he had averted a catastrophe".

Modern executives who mimic MacWhirr do so because company Boards and stakeholders are very likely to criticise delay and expense, even if the organisation eventually achieves its objective. Executives therefore prefer to take uncertain and dangerous risks rather than face certain (unjustified) criticism.

There was a classic example in late December 2012 when Shell chose to tow the Arctic drilling rig Kulluk through treacherous waters all the way from Alaska to Seattle in the middle of winter, at least in part to ensure that they avoided a $6m Alaskan tax charge which would otherwise have fallen due on 1 January.  The loss of the rig cost Shell around $200m.

It is too soon to be sure, but it looks as though the Captain of the Viking Sky was emulating Captain MacWhirr when he set sail down the Norwegian coast in March 2019, imperiling the lives of 900 passengers and 400 crew. An intense storm had been forecast, and the Captain chose a course close to the coast and through Hustadvika, notorious for its rough seas as there are no outlying islands which might take the brunt of strong winds. The turbulence of the seas appears to have caused the engines to cut out, leaving the ship in grave danger of joining many others in this ships' graveyard. Many elderly passengers had to be lifted off by helicopter before the seas calmed down enough for the engines to restart.

There were a number of senior financiers who understood that they were running their companies into serious trouble in the years before the 2008 financial crisis, but felt they would face unacceptable criticism if they were to follow a less risky course.  Citibank's Charles Prince famously told the Financial Times that "As long as the music is playing, you've got to get up and dance. We're still dancing." This led the same paper's John Kay to conclude that "The man who held the most powerful position in the financial services industry was the prisoner of his own organisation." And Andrew Ross Sorkin, in Too Big to Fail notes that Lehman's Dick Fuld "had known for years that Lehman Brothers' day of reckoning would come ... But, like everyone else on Wall Street, he couldn't pass up the opportunities."

The MacWhirr syndrome is just as common in politics. US Congress Representative Barney Frank commented as follows, when talking about Hank Paulson's dilemma in the middle of the Lehman crisis: "The problem in politics is this: You don't get any credit for disaster averted ... Going to the voters and saying, 'Boy, things really suck, but you know what? If it wasn't for me, they would suck even worse.' That is not a platform on which anybody has ever gotten elected in the history of the world".

The implementation of the Brexit referendum strikes me as an excellent example of the syndrome, whatever you thought of the original decision. Ministers appeared much more concerned to avoid being criticised for delay in implementing the referendum result than interested in getting to a safe and sensible future relationship with the EU 27. And others have noted that if Margaret Thatcher had acted to deter Argentina from invading the Falklands, rather than ordering a taskforce to remove the occupying forces after they had landed, she would probably have been remembered as an unsuccessful one-term Prime Minister.

But there are some interesting examples of individuals and organisations refusing to succumb to the MacWhirr Syndrome, even though they were bound to be criticised for avoiding the likely disaster.

On the other hand, here is a confession from a railway engineer who risked breaking a new law and got away with it:

[MacWhirr-like behaviour was first identified by economist John Kay.  The above note adds detail to the substance of his original article.]

 

Martin Stanley

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