Surprising Stewardship Lessons from the Miracle on the Hudson

May 13, 2019 |
2 minute read
|

“When you’ve suffered a complete loss of engine thrust over the largest city in America, you must act quickly and independently to address the developing situation. But, you must also trust in the system that trained you and prepared you to handle such moments of crisis.” As Jeff Skiles elaborates on his website, his story of co-piloting U.S. Airways flight 1549, the “Miracle on the Hudson,” would not have had its perfect ending if it weren’t for the years of training and preparation that allowed Captain Sullenberger and him to work together as a team and maximize their time, communication, and effectiveness. While it may not seem obvious, investment stewards can learn important, relevant lessons from that heroic landing.

Skiles will be the keynote speaker at Commonfund Institute’s Investment Stewardship Academy, being held at the Yale School of Management from June 24-28, 2019.

Here’s a preview of some of the lessons investment stewards will learn from his talk.

  • Forward-Looking:  Commercial airliners rarely have rear view mirrors because, as one pilot wrote, “Because the world is changing rapidly, you need to look ahead, not back.” This is especially true for investment stewards who need to be thinking ahead for the long-term and preparing their institutions for the future.
  • Process and Procedure:  Both Skiles and Sullenberger have been quoted on how well-documented processes and procedures gave them the ability to act rationally the moment they faced danger. By deciding in advance what they would do, they reduced the margin for error. The same holds true for investment stewards who can protect themselves from market turbulence with a solid investment policy statement and structured decision-making process.
  • Managing Complexity:  According to Skiles, due to the extreme complexity of aircraft, operation, and environment, the aviation industry has been forced to develop layers of professionals, institutional and personnel procedural solutions, checklists, flows, and the teamwork, systems and procedures to integrate them all into a functional whole. Trustees, investment committee members and staff all have an important role to play in stewarding investment capital and need to develop the skills to handle it.
  • Barriers to Error:  Skiles says that like all human beings, pilots make mistakes. Airlines use mistakes not to place blame, but to prevent future errors. They even encourage pilots to self-report errors without threat of disciplinary action. Improving processes, learning from mistakes, and conducting rigorous self-assessments can give investment stewards their own barriers to error.
  • Delegation:  “As aircraft operations have gotten more complex, it has become far too difficult for any one individual to conduct operations,” says Skiles. An array of professionals – from dispatchers to flight attendants – all have a role in getting an airliner in the air and on the ground safely. “Each has experience and responsibility that must be respected.” In today’s world, investment stewards have the capability and the responsibility to delegate actions and decisions to specialized professionals. Even pilots like Skiles will defer to experts, knowing that systems and structures are in place to ensure everyone works together as a coordinated whole.

These are among the many surprising parallels between the work of investment stewards and airline crews. If the training and preparedness of the crew on U.S. Airways flight 1549 could save 155 lives, imagine what the proper training can do for your institution. The Investment Stewardship Academy provides this and the chance to meet this heroic steward of his passengers’ lives. To find out more about the program click here.

Sources:

  1. Skiles, Jeff, Miracle on the Hudson | Jeff Skiles. https://www.jeffskiles.com (accessed May 13, 2019)
  2. Silbaugh, Barry and Jeff Skiles. Landing on the Hudson River: Lessons for Health Care.https://docs.wixstatic.com/ugd/f9554c_7e5b9e2d85a84742880249a735d5fbea.pdf (accessed May 13, 2019)
Commonfund Institute

Author

Commonfund Institute

Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and the use of such logos hereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property.

To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Fund. Such statements are also not intended as recommendations by any Commonfund entity or any Commonfund employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information or statements. Past performance is not indicative of future results. For more information please refer to Important Disclosures.

Stay connected with the Insights Blog

Popular Blog Posts


Market Commentary | Insights Blog

Chart of the Month | U.S. Budget Deficit Hits Record Highs

In his first 100 days as President of the United States, Joe Biden has introduced three domestic funding proposals, totaling close to $6.0 Trillion, reflecting a desire to enhance the role of the...
Perspectives | Insights Blog

The Case for Using the Higher Education Price Index® (HEPI) to Define Inflation for Colleges

When calculating return targets for an endowment portfolio, a conventional piece of the equation is often the Consumer Price Index (CPI). CPI plus 5% is the common short-hand formula for institutions...
Market Commentary | Insights Blog

Chart of the Month | The Surprising Relationship Between Money Supply and Inflation

The potential for rising inflation is becoming a top concern for many investors and consumers. Many believe that inflation is already here as evidenced by price increases in commodities, homes,...

Disclaimer

Certain information contained herein has been obtained from or is based on third-party sources and, although believed to be reliable, has not been independently verified. Such information is as of the date indicated, if indicated, may not be complete, is subject to change and has not necessarily been updated. No representation or warranty, express or implied, is or will be given by The Common Fund for Nonprofit Organizations, any of its affiliates or any of its or their affiliates, trustees, directors, officers, employees or advisers (collectively referred to herein as “Commonfund”) or any other person as to the accuracy or completeness of the information in any third-party materials. Accordingly, Commonfund shall not be liable for any direct, indirect or consequential loss or damage suffered by any person as a result of relying on any statement in, or omission from, such third-party materials, and any such liability is expressly disclaimed.

All rights to the trademarks, copyrights, logos and other intellectual property listed herein belong to their respective owners and the use of such logos hereof does not imply an affiliation with, or endorsement by, the owners of such trademarks, copyrights, logos and other intellectual property.

To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated herein. Forecasts of experts inevitably differ. Views attributed to third-parties are presented to demonstrate the existence of points of view, not as a basis for recommendations or as investment advice. Market and investment views of third-parties presented herein do not necessarily reflect the views of Commonfund, any manager retained by Commonfund to manage any investments for Commonfund (each, a “Manager”) or any fund managed by any Commonfund entity (each, a “Fund”). Accordingly, the views presented herein may not be relied upon as an indication of trading intent on behalf of Commonfund, any Manager or any Fund.

Statements concerning Commonfund’s views of possible future outcomes in any investment asset class or market, or of possible future economic developments, are not intended, and should not be construed, as forecasts or predictions of the future investment performance of any Fund. Such statements are also not intended as recommendations by any Commonfund entity or any Commonfund employee to the recipient of the presentation. It is Commonfund’s policy that investment recommendations to its clients must be based on the investment objectives and risk tolerances of each individual client. All market outlook and similar statements are based upon information reasonably available as of the date of this presentation (unless an earlier date is stated with regard to particular information), and reasonably believed to be accurate by Commonfund. Commonfund disclaims any responsibility to provide the recipient of this presentation with updated or corrected information or statements. Past performance is not indicative of future results. For more information please refer to Important Disclosures.