A key aspect of real options is knowing when to make a decision. If you are facing the need to decide, determine when you have to make the decision and use the intervening time to gather as much information as possible. That way, when you
An excellent example of decision timing is the flight of Friendship 7, John Glenn’s Mercury flight in February of 1962. The flight was planned for three orbits. At the end of the first orbit, Mission Control was just about to patch President John F. Kennedy through to John Glenn when Mission Control received a “Segment 51” warning and John Glenn began having altitude control problems. Mission Control told the President that they were a little busy at the moment and would have to call him back. The team then turned to figuring out what Segment 51 indicated.
Segment 51 is meant to indicate that the landing bag had deployed. The landing bag is a rubber bag that inflated on the Mercury capsule following reentry which prevented the capsule from sinking when it landed in the ocean. The landing bag was situated behind the heat shield which protected the Mercury capsule from the intense heat of reentry. If the landing bag had truly deployed, that also meant that the heat shield had been pried loose from the capsule, which was not a good thing for John Glenn. Basically it meant that if they were to believe what the data was telling them, the Mercury Capsule could burn up during reentry.
Mission Control immediately began reviewing options. As it turned out, the Mercury Capsule had a retropack strapped on to the bottom of the capsule that fired to slow the capsule into a reentry velocity and then was jettisoned before the capsule entered the atmosphere. The retropack was attached to the capsule by three metal straps and if left on would theoretically hold the heat shield on during the crucial point of reentry. But Mission Control was not sure if the retropack burning up would also cause damage to the heat shield. They also weren’t sure whether the Segment 51 alert was actually valid. Some on the team thought the issue was actually a false alarm caused by an electrical failure.
With two orbits left, Mission Control began a series of activities at once. Some controllers began identifying tests that they could perform to determine whether the indicator was an electrical issue or if the heat shield had actually dislodged. Others started trying to figure out what would happen if the retropack stayed attached to the capsule, and still others were figuring out how the reentry procedures needed to change if in fact they decided to leave the retropackon. All the while, no decisions had been made whether to leave the retropack on, Mission Control in fact had two more orbits to figure that out, and they were using every bit of that time to explore their options, and gather their information to help make their decision.
Chris Kraft, the flight director for the mission was convinced that the problem was an electrical issue, and stalled making the decision to leave the retropack on until the last moment so that he could have as much information as possible:
“Kraft was still holding out until the last moment, so that he had a complete understanding of the final instructions before he radioed up to John Glenn. The mission was turning into a horse race. Kraft wanted answers from one final test to be performed over Hawaii before he turned the discussion to the entry procedure modifications.” Failure is Not an Option p.74
Finally after hearing that the retropack rockets fired and were not a risk to explode during reentry, Walter Williams, the Operations Director and Kraft’s boss made the decision to leave the retropack on at the point in time where Mission Control and John Glenn had enough time to alter the reentry procedure to not jettison the retropack.
When Glenn reentered the atmosphere, the retropack burned up, followed by the heat shield sufficiently protecting Glenn from the heat of reentry. After Glenn landed and analysis was done on the recovered capture, it was determined that the Segment 51 reading was invalid.
In this case Chris Kraft knew that his options started running out when Friendship 7 was over Hawaii during it’s last orbit. He therefore waited to make a decision until that point so that the mission control staff could gather information and try to determine what was really going on.