When It Hits the Fan: How to Handle a Crisis from the Top

Career Climbers / 30th April 2020

Zhike Lei

Regardless of safety policies, industry regulations, education, or other measures institutions put in place, errors are inevitable. As modern operations and collaboration around the globe become increasingly dynamic and complex, organizations need to tackle errors quickly and effectively before they mushroom into major crises. The COVID-19 crisis has shown not only the U.S. but the world how quickly a situation can spiral out of everyone’s control. When organizations and individuals are put into high-pressure situations they must ensure the most effective, ethical, and economical solutions are developed and executed. High-pressure professions carry a heavier weight when errors are made and can result in serious outcomes. In fact, medical errors are the third leading cause of death in the U.S. according to a Johns Hopkins study.

Managing errors in real-time requires errors to be reported in a timely manner. Yet, culturally, the default is to react to the immediate issue or, worse, cover up errors, which is understandable because employees tend to fear the repercussions of reporting an error, whether or not it was their fault. Moreover, employees simply implement a short-term fix for the overwhelming majority of errors in a race for resolution. However, to avoid future errors, CEOs and other senior-level executives need to understand and learn from errors and must first understand the error in depth. This requires institutions to take time, conduct a root error analysis and implement a culture where errors are not only tolerated, but studied. 

In my most recent research, Fast, Slow and Pause: Understanding Error Reporting via a Temporal Lens, I suggested the behavioral options in organizations and across cultures, as well as the elements of time when reporting errors. I discussed how the cultures of time and cultural norms affect the very nature of error reporting behaviors. From my findings I can say it’s time to rethink and reframe error reporting, especially for chief executives.

Timing is everything. When an error is reported timely and declared, CEOs and executives can gain enough “recovery window” to stop the looming catastrophe. They can readily instruct employees to formulate interpretations, correct choices and mobilize resources. Consider the COVID-19 crisis, which is a race against time in many ways. CEOs need to be alerted to the side effects of emphasizing speed over content. In some situations, reacting to an error too quickly can lead to the problem-solver incorrectly rejecting the correct diagnosis. Organizations must learn to  pause, reflect, and explore aberrant observations, concerns, and questions. Understanding the side effects of the quick solution does not fix the root of the original error. A report in Anesthesia and Analgesia by Rudolph, J.W. & Raemer, D.B. studied a set of doctors and analyzed how they problem solved under high-pressure situations. The research showed that doctors that jumped from one action to another without utilizing multiple action steps of treatment, established a plausible but erroneous diagnosis. Rudolph was able to determine the speed of which doctors responded had a direct impact on cultivating the proper solution.

Organizational failures rarely have a single cause. Most crises and accidents result from multiple, smaller errors in environments with serious underlying system flaws. In his famous “Swiss cheese” model, Reason notes that hazards will result in harm when individual defensive barriers are incomplete and contain random holes, like the holes in slices of Swiss cheese. Occasionally these holes line up, allowing those hazards to create harm and create failures. 

Yet some errors are latent and difficult to surface. To make matters worse, these latent errors often persist over time and organizational members incorrectly learn to accept such deviations as normal and fail to see the need for remaining vigilant. The collapse of Baring Investment Bank in 1995, the losses of the Challenger and Columbia Space Shuttles, and the crashes of Boeing’s 737 Max are a good illustration of the power of latent errors because they failed to signal and amplify early warning signs and break the normalization of deviance.  

Encourage feedback loops. Feedback loops occur when outputs of a system are routed back as inputs as part of a chain of cause-and-effect that forms a circuit or loop. These system checks can serve as error amplifiers (positive feedback loops) or error correctors (negative feedback loops) and serve as an internal reflection and reframing. To put this in plain English, organizations should implement “pause and learn” processes in which teams discuss at each project milestone what they have learned. During these discussions, team members examine perceived success, uncover mishaps, and design decisions for the next phase. NASA often uses the “pause and learn” approach which has uncovered some latent errors, tracing mishaps to a series of small signals that went unnoticed at critical moments. In the aftermath of COVID-19, organizations should take time to “pause and learn” before continuing business as usual.

Every error counts, even the smallest ones. CEOs and senior-level managers who learn to be more proactive instead of reactive will be successful in performing under high-pressure situations. CEOs must also encourage a culture that does not support errors but supports accurate reporting of errors. At the end of the day, organizations must maintain their DNA while evolving into an organization that allows for open dialogue on mishaps, error tracking, and managing errors.

Zhike Lei is an Associate Professor of Applied Behavioral Science at Pepperdine Graziadio Business School, where she is also the Director of the Center for Applied Research.

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