Listen to this article
To err is human, or so the saying goes. But given that management errors can be dangerous and expensive, it is no surprise that business schools have begun to highlight error management.
What is error management?
It is not about preventing errors, begins Kathleen Sutcliffe, professor of management and organisations at Michigan Ross. “We can try to design systems so humans don’t make mistakes, but mistakes are ubiquitous.”
It is also different from crisis management, she says. “This is about not getting into a crisis!”
The best managers, says Bruno van Pottelsberghe, dean of Solvay Business School in Brussels, are those that best manage identified mistakes to prevent further errors being made.
Why is it becoming fashionable?
The financial crisis of 2008, rogue traders and the Libor rate-fixing scandal, as well as crises in hospitals and healthcare, have concentrated the mind. Error management practices are spreading from high-hazard areas such as aircraft cockpits and nuclear power plants, to healthcare and finance. “Organisations are just coming to grips with the idea that you can’t say any more that you didn’t see it coming,” says Prof Sutcliffe. “Things that never happened before are happening all the time.”
What is best practice?
Amy Edmondson, professor of leadership and management at Harvard Business School, says that in organisations failures caused by blameworthy acts are rare, but a common management response is to treat failures as if someone were to blame.
The best leaders, says Prof Edmondson, are those who “don’t think they have the answers. They think they have the right questions and they know how to ask them.”
Lessons can be learnt from high-risk areas such as the airline industry, says Jan Hagen, director of open enrolment programmes at ESMT, in Berlin. “If you have a team of pilots in the cockpit they work flawlessly together, even if they don’t know each other. The captain is always the leader but is most efficient when asking for advice. We think of visionary leaders as giving direction but they get direction by talking to people.”
John Carroll, professor of organisation studies and engineering systems at MIT Sloan, says companies need measurement systems in place and ways to communicate up and down the organisation. “You have to know what your hazards are. You have to know what you are protecting against.”
For Prof Sutcliffe, the identification and analysis of errors is critical. “Errors are important because they audit our strengths and our weaknesses.”
Why is it difficult to implement?
Managers find change very difficult, says Prof Carroll. “Often it is not just the written procedures that are wrong. It is about people.” What is more, people often find it difficult to speak out when they make mistakes or see others do so.
“Nobody likes to talk about things that go wrong,” agrees Prof Hagen. “You need to create transparency to make it easier for people to share information. If you make an error, it is better to create the learning environment to prevent people making the mistake again.”
Even managers who realise this are often reluctant to discuss errors publicly. “When people see errors, they think they should talk about it in a one-to-one environment. Then only two people have the learning, not everyone in the organisation.”
Corporate or national culture can also prevent errors being adequately addressed, says Prof Carroll. The financial sector is one example, because the competitive pressures are so high. People cut corners to make money, he says. “Safety is a cost in the short term, or at least it can be seen that way …In the short-run it is very tempting to cut a corner.”
Hiding mistakes is a problem that pervades management even at the highest level, says Prof van Pottelsberghe at Solvay, which is setting up a research group in error management. “When you talk to chief executives they admit they make mistakes. But they will not go public.”