Risk, Routines, and Ripple Effects: What the Hindenburg Can Still Teach the Boardroom

by Philipp Willigmann

In May 1937, the German airship Hindenburg burst into flames above a New Jersey airfield. The disaster, widely assumed to be an act of gross negligence, was anything but. It was the product of cold logic. The smoking lounge, a seemingly absurd feature on a hydrogen-filled dirigible, existed because first-class passengers demanded it. In a commercial world, passenger comfort trumped theoretical risk.

This is the lens Edward Tenner applies in Why the Hindenburg Had a Smoking Lounge, a sharp and quietly subversive examination of unintended consequences. His message: systemic failures are rarely the result of one bad call. They come from compounding rational decisions, often well-intentioned, sometimes brilliant, that interact in unpredictable ways. Boards, founders, and investment committees would do well to take note.

Risk, Misread

Over the past 20 years, working in Fortune 500s and advising growth-stage ventures alike, I’ve seen this play out across industries and continents. Innovation strategies that look pristine on paper fall apart in practice, not because the ideas are flawed, but because the systems absorbing them are unprepared.

One investment I supported involved a fast-scaling AI company focused on computer vision in the mobility space. The strategic intent was impeccable: unify payments and customer insights across gas stations, EV chargers, and car washes. Yet despite the investment's potential, the corporate organization choked on integration. Misaligned incentives, channel conflict, and legacy systems rendered the innovation inert. What could have been an internal $1–2B transformation now risks becoming an external disruption.

This is textbook Tenner. What looks rational from one vantage point can unravel when confronted with a wider system. Boards often chase performance metrics while ignoring foundational frictions, employee distrust, inertia, and mismatched values. They optimize cost structures and inadvertently erode collaboration and morale. Bold innovation roadmaps collapse under operational drag.

The Limits of Linear Thinking

The Hindenburg’s lounge didn’t cause its destruction. But it symbolized a deeper flaw: optimizing for the wrong variable, underestimating downstream effects. In boardrooms, this is a familiar pattern. Think of layoffs during COVID. Many firms, anticipating a recession, trimmed headcount in 2020. When the rebound arrived, they found themselves understaffed, reputationally damaged, and slow to adapt.

I led some foresight modeling with Andrew Blau, Gopi Billa, and Peter Schwartz at the time. We encouraged a more tempered approach: cut costs judiciously, yes, but also prepare pathways for rapid reinvention. Scenario planning allowed our clients to test divergent outcomes without panic. Those who followed this logic didn’t just recover faster; they re-entered their markets stronger, with better positioning, talent retention, and strategic clarity.

At the time, I introduced this thinking to the leadership of a Fortune 500 company. The CEO and several business unit leaders dismissed it as too theoretical. Three of the scenarios we laid out, supply chain constraints, inflationary pressure, and geopolitical fragmentation, have since played out almost exactly. Instead of being prepared, the company is still focused on defending its core, with little visible progress on transformation. The stock hasn’t just stagnated—it’s underperformed its peers.

The lesson? Scenarios aren’t predictions. They are tools to expose blind spots and surface better decisions—before reality forces them.

The Boardroom's Blind Spot

Tenner doesn’t offer prescriptive solutions. But he leaves readers with an urgent implication: boardrooms are not adequately equipped to manage systemic complexity. Most remain dominated by finance, legal, and audit backgrounds. Essential, yes, but insufficient.

What’s missing are directors who:

• Have built and scaled complex systems—and know when to evolve, split, or streamline them without eroding momentum. Hewlett-Packard, for instance, managed multiple large-scale transformations, spinning off Agilent, later separating its consumer and enterprise divisions—without triggering chaos or disengagement. They maintained internal alignment and agility even through structural overhaul.
  

• Understand the tensions between strategy and culture, speed and structure. One global mobility player I worked with prioritized top-down strategy rollouts, but ignored deep-seated cultural resistance—resulting in widespread attrition and stalled execution. When they finally invested in change leadership and bottom-up feedback loops, transformation efforts gained real traction.
  

• Have advised or founded ventures operating in volatile, ambiguous environments. Look at Grab or Uber, companies born in highly uncertain markets with shifting regulations and fragile infrastructure. Their leadership developed muscles in adapting fast, testing small, and evolving models in real time. These are the instincts missing in most boardrooms.

These aren’t theoretical strengths. They’re practical survival tools. The absence of systems thinkers on boards isn’t just a missed opportunity; it’s a liability, especially in geopolitically turbulent times. According to Spencer Stuart, only 12% of Fortune 100 board members bring firsthand experience scaling a company from inception to growth. And even fewer have led transformation inside large legacy organizations.

From Zeppelin to Zoom

Tenner’s framing is deceptively simple. The Hindenburg didn’t fail because of incompetence. It failed because a set of rational actors followed their incentives, without stepping back to assess the system they were creating.

That dynamic hasn’t changed. From generative AI rollouts to ESG mandates to corporate venture investments, risk today is more often embedded within our logic than opposed to it.

This is where the modern boardroom mirrors the smoking lounge, prizing optimization over systems thinking, and confidence over curiosity.

Tech KPIs vs. Cultural Misfit: Boards chase performance metrics while ignoring foundational frictions, employee distrust, inertia, and mismatched values. KPIs are easy to measure. Culture is not. But it’s often the invisible force that determines whether a strategy sticks—or implodes. Misreading this terrain means missing the early warning signs of decline. In M&A, up to 90% of failed integrations cite culture clash as a core reason—proving that even perfectly priced deals collapse if the underlying system isn’t ready to absorb change.

Efficiency vs. Incentive Friction: Optimizing cost structures can inadvertently undermine collaboration, loyalty, and morale. In volatile times, cost-cutting feels safe. It’s tangible. It fits neatly in board minutes. But it’s often the innovation teams, venture bets, and transformation leaders who get cut—because their value is future-facing and hard to quantify. I’ve seen companies cancel internal ventures that later re-emerged from competitors at 10x the acquisition price. What looks like prudence can turn into strategic self-sabotage. Studies show that companies using broad layoffs as a first resort often lag behind competitors in revenue growth and innovation output for years.

Innovation Roadmaps vs. Execution Gaps: Bold bets collapse under operational reality. Ambitious visions make headlines. But what gets less attention is the slow grind of building support, integrating with legacy systems, and realigning incentives. One global study found that 76% of executives cite internal politics—not capital or capability—as the biggest blocker to innovation. Which means bold ideas don’t fail for lack of vision, but for lack of internal permission. This is where most transformation efforts die—not in ideation, but in the bottleneck between strategy and execution. And when execution fails, so does belief.

What looks rational can break the system it touches.

The Cascading Logic of Innovation Gone Wrong

Then comes the domino effect:

1. Invest in Innovation X: Strategy looks solid on paper. Most innovation efforts start with logical frameworks, glossy decks, and alignment meetings. Everything makes sense until real-world dynamics hit.

2. Customer Growth: Demand surges, straining internal ops. If the innovation succeeds early, ops often aren't ready. Legacy systems, unclear ownership, and internal silos get exposed fast.

3. Cost Overruns: Complexity blooms, budgets bloat. New solutions usually require integration, customization, or unexpected support. That “pilot budget” grows quietly but steadily.

4. Operational Friction: Frustration festers inside. Teams juggling their day jobs now have to absorb new workflows, tools, or mandates. Most weren’t part of the design and it shows.

5. Regulatory Pushback: New models raise scrutiny. Innovations often outpace the rules. Once regulators notice, companies either scramble to retrofit compliance or retreat.

6. Team Burnout: People leave, or check out. Internal champions get overextended. If they’re unsupported or underrecognized, attrition kicks in, starting with the best talent.

7. Channel Conflict: Incumbent teams resist the change. Sales doesn’t want cannibalization. Ops doesn’t want disruption. If incentives aren’t realigned, protectionism takes over.

8. Customer Churn: Promises fall short. Trust erodes. The result? Delivery gaps, clunky support, and half-baked features are leading early adopters to feel misled or disappointed.

This isn’t hypothetical. It’s observable and avoidable if boards widen their aperture.

The Call to Boards

It’s no longer enough to rely solely on industry veterans or oversight specialists from finance, legal, audit, or compliance. These profiles bring needed rigor—but they often default to control when what’s required is navigation.

Today’s environment demands systems navigators—people who understand ripple effects, friction points, geopolitical impacts, and the interlocking routines that quietly shape transformation success or failure.

These failures—whether in M&A, product launches, or board-level decisions—often stem from three overlooked forces: misread risk, unquestioned routines, and unexamined ripple effects. This isn’t semantics. Risk isn’t just about volatility, but about logic gone unchallenged. Routines, especially in large firms, become invisible constraints. And ripple effects are what turn small misjudgments into systemic breakdowns. Understanding all three is what separates boardroom oversight from true foresight.

I’ve spent the last 20 years building innovation roadmaps, incubating new ventures across Fortune 500, investing in startups, challenging assumptions, and helping organizations think in decades, not just quarters. If this kind of conversation is missing in your boardroom, maybe it’s time to widen the lens.

Special thanks to Claudia Heimer (IMD) for her input and to Edward Tenner for writing this book and joining us on the Inside CVC podcast. (coming soon)

References

[1] Tenner, Edward. Why the Hindenburg Had a Smoking Lounge. American Philosophical Society Press.
[2] CB Insights. “Fools Rush In: 37 Of The Worst Corporate M&A Flops.” October 30, 2018.
[3] Capgemini Consulting. “Innovation Leadership Study.”
[4] Spencer Stuart. “2023 Board Index.”
[5] Wharton Business School. Prof. Peter Cappelli on the long-term costs of layoffs.
[6] Harvard Business Review. “Culture is the key to M&A success.”