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Surprising Stewardship Lessons from the Miracle on the Hudson

May 13, 2019  | by Cathleen M. Rittereiser

Industry Knowledge

“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.

Source:

Skiles, Jeff, Miracle on the Hudson | Jeff Skiles. https://www.jeffskiles.com (accessed May 13, 2019)

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)

Authors

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Cathleen M. Rittereiser leads Commonfund’s educational, market research and professional development activities as Executive Director of Commonfund Institute.  She is the co-author of the books Foundation and Endowment Investing and Top Hedge Fund Investors: Stories, Strategies, and Advice. Prior to joining Commonfund, Cathleen was the Founder and Chief Executive Officer of Uncorrelated, LLC, a conference and thought leadership publishing platform for endowment, foundation and pension investors, and a frequent speaker and writer on the endowment model and Outsourced CIO (OCIO).  Prior to Uncorrelated, she spearheaded an annual endowment and foundation conference as the Executive Director of Institutional Investor’s conference division, and held investor relations and marketing roles with leading financial services firms and hedge funds.  She received an A.B. from Franklin & Marshall College, where she served on the investment committee, and an M.B.A. from NYU Stern School of Business.
Cathleen M. Rittereiser
Executive Director

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Disclaimer

Information, opinions, or commentary concerning the financial markets, economic conditions, or other topical subject matter are prepared, written, or created prior to printing and do not reflect current, up-to-date, market or economic conditions. Commonfund disclaims any responsibility to update such information, opinions, or commentary. To the extent views presented forecast market activity, they may be based on many factors in addition to those explicitly stated in this material. 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. Managers who may or may not subscribe to the views expressed in this material make investment decisions for funds maintained by Commonfund or its affiliates. The views presented in this material may not be relied upon as an indication of trading intent on behalf of any Commonfund fund, or of any Commonfund manager. Market and investment views of third parties presented in this material do not necessarily reflect the views of Commonfund and Commonfund disclaims any responsibility to present its views on the subjects covered in statements by third parties. 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 Commonfund fund. Such statements are also not intended as recommendations by any Commonfund entity or 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. Past performance is not indicative of future results. For more information please refer to Important Disclosures.