In this blog, you’ll learn:
- Asset management decision making can be based on facts or emotions
- One global company is facing big trouble because of an emotional decision
- Making asset management decisions based on facts and data also comes with problems
- There is a way to overcome decision-making problems with digital transformation
“All we want are the facts, ma’am.”
Baby Boomers and lovers of TV reruns will instantly recognize that famous phrase. Each week, stony-faced Detective Joe Friday would be tasked with solving another crime in 1950s Los Angeles. Few things irritated Friday more than a rambling witness. So, whenever a bystander ventured to offer an opinion, hunch or anecdote unrelated to the crime at hand, the seldom-emotional Friday would bite his lip and try to steer the conversation back to reality.
Industrial executives, directors and managers often face the same problem when making a key enterprise asset management decision. Some want just the facts. Others rely on opinion, intuition and experience. Who prevails? It depends on the people and the company culture.
A poor choice could have serious implications, including a drop in shareholder value, decline in reputation, loss of customers, lawsuits, shuttered plants and even having to go out of business.
For example, in December 2019, Boeing halted production of its flagship 737 MAX airliner amid two crashes and the deaths of nearly 350 passengers. Originally, the problem was traced to a faulty sensor. Then news came out about Boeing’s decision not to include information about a new automatic flight-control feature in pilot training manuals. This system, if deployed by pilots, could have prevented a crash. However, the pilots were never told about the feature. As 2020 dawns, investigators have now found additional problems with wiring. This wiring problem could cause a short circuit, resulting in a crash. If reports are right, the company will have to repair wiring on several hundred existing 737 MAXs in service.
The company has spent $8 billion on plane changes with no end in sight. The halt puts 12,000 jobs in jeopardy if workers cannot be reassigned to other Boeing plants. Boeing shareholders have seen their shares drop 25 percent in value between March and December 2019.
Some industry experts believe Boeing rushed production of the 737 MAX because it felt market pressure from competitor Airbus. The company may have gambled, hoping to fend off Airbus with its upgraded 737 MAX. However, the Airbus A320 has just passed Boeing’s 737 as world’s best-selling plane. This situation, combined with the crashes and wiring problems, shows Boeing lost its bet.
Why? Perhaps Boeing made its 737 MAX decision based on subjective fear and anxiety about a competitor rather than on objective fact. If so, Boeing wouldn’t be the first company to make a bad decision based on emotion. Incredibly, according to Ohio State University management science professor Paul C. Nutt, half of all decisions made by corporations fail. The reasons include executives and managers imposing solutions, limiting research on alternatives and taking shortcuts when under pressure.
Industrial assets are worth millions, even billions, of dollars. Thousands of jobs and people’s lives depend on those assets. In such cases, it pays to make an objective decision based on verifiable facts and thoughtful analysis rather than gut feelings. Digital transformation has helped many companies make better decisions based on data rather than emotion or intuition.
Of course, there’s information overload. Too much data may be worse than no data at all. Paralysis by analysis always poses a danger. A solid data sifter to distill information to the most relevant facts is necessary in the Information Age.
Innovapptive, a digital transformation provider, offers a platform of solutions designed to give industrial executives, directors and managers the relevant, verified data they need to make informed decisions. Whether it’s enterprise asset management, maintenance or inventory, leaders gain real-time electronic data verified by the field and reported to back-office systems.
This high-value data provides clear operational insight and visibility. Decision makers can:
- Find cost-savings opportunities.
- Respond quickly to trends or problems.
- Make better use of labor and resources.
- Reduce errors due to incomplete information.
- Get problems fixed the first time.
To learn more about Innovapptive and its digital enterprise asset management solutions, schedule a free demo today by calling 844-464-6668 or by clicking here.