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Operations

Error management: A pre-emptive move that can reap long-term gains

If Murphy’s Law is to be believed, we should be doing a lot more to prevent mistakes from happening in the first place, especially when such errors can potentially turn into disasters. Take Chernobyl or the more recent NASA Columbia catastrophe, events that will long be remembered, but for the wrong reasons.

At an organisational level, errors are usually less dramatic, but undesirable nonetheless.

Dave Hofmann, Associate Dean and Professor of Organisational Behaviour at the University of North Carolina, thinks that error management is underrated, and says that has the effect of hurting the organisation where it matters.

“I think from a leadership standpoint what you need to do is to create first a mindset that these things are important,” he said in an interview with INSEAD Knowledge.

A compelling argument

He revealed that among the research conducted in computer science and information systems, where between 20 per cent and 50 per cent of spreadsheets within organisations contain errors, one notable study unearthed a seven million dollar fund transfer that happened by mistake.

With errors so commonplace within organisations, it’s surprising that more isn’t being done to eliminate them. Part of the reason for this could be that it’s frowned upon within many organisations for employees to report errors, whether self-made or otherwise.

“Some other research, that we're doing in a slightly different context but we think has implications for error management, deals with who should be the source of that message and what should be the content of that message,” Hofmann says.

“(What) we're doing actually suggests that leaders may not be the best source of that message, that it may be people who have had first-hand exposure to the ramifications of errors. So people that have made a mistake and suffered the consequences may make a much more compelling argument in terms of the importance of this issue for organisations than a leader who is distant, saying this is important you should pay attention to it,” he explains.

Creating a safe zone

After establishing who should communicate the error, Hofmann says leaders should then create systems and structures within organisations, so that if someone sees another person making an error, it’s actually safe to approach him or her about it.
He also advocates formally designating a person as a ‘unit consultant’ to deal with new employees who don’t have a lot of experience around the company, so if they think they may have made a mistake and need help diagnosing what happened, help is at hand.

Hofmann believes that the virtues of setting up a formal system to manage errors will go a long way towards preserving the integrity of the company.

“If you understand that not engaging in error management and error recovery is an important part of your job, and if you understand through some of these real salient examples of what are the potential ramifications of this, in terms of human life or organisational reputation and harm to customers, then I think you're more likely with that mindset to say ‘hey, this is important.’”

To ensure the system can work, Hofmann says correct behaviour needs to be positively reinforced.

“You need a broader organisational culture that really balances fairness and justice and accountability, such that if someone reports an honest mistake that they're not hung out to dry for it. But rather they're rewarded for discussing it, so that they can help the organisation recover from it before it creates a real negative problem in a much bigger sphere.”

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