Business Psychology

Article No. 367
Business Practice Findings, by James Larsen, Ph.D.

The Failure Trap

New research displays the futility of scapegoating.

Pretend for a moment that you are the CEO of the company that operates the Metro-North commuter rail train in the Bronx in New York. Early one morning in 2014, you are awakened by a phone call informing you of a terrible accident. One of your trains entered a station without slowing, jumped its track, and slammed into an escalator climbing it nearly up to street level before coming to a stop. Sixty people were injured and four people were killed. By the middle of the morning, police investigators determined that the train operator had dozed off and caused the accident.

You are the CEO, and you are devastated, but as the days go by, you realize that the best contribution you can make is to get to work and be a manager. It is your job to make sure your company learns from this experience and that similar accidents are prevented in the future.

Here's a possible response that may seem right: fire the train operator and write a new rule into the employee handbook outlawing employees sleeping on the job. This response feels right, and it should satisfy public outcry about the accident, but new research by Vinit Desai from the University of Colorado at Denver suggests this response may not be right at all.

The subjects raised by this example include organizational learning from failure and performance improvement - topics of interest to anyone with management responsibility. Desai's research investigated perceptions of leaders about the location of failure and their subsequent actions in responding to it - to improve performance and reduce future failures. He studied how hospitals in California responded to deaths resulting from failed CABG surgeries (coronary artery bypass graft).

In the hospitals, if leaders perceived the failure as isolated and responded on that level, failure events actually increased. Specifically, if individual surgeons were blamed for the deaths and fired, deaths actually increased. For the subway example, firing the inattentive employee would result in more accidents resulting from employees dozing off, not fewer.

When bad things happen, it is natural that people search for a cause. It is also natural that personal needs guide this search, needs such as not being personally to blame and personal values not being challenged. The failure trap waits for business owners and managers as this thinking unfolds, and isolating the cause of failure is a sure sign that learning from failure will yield a disappointing outcome. For example, an angry outburst by a clerk towards a customer could yield a wealth of insight about pressure building on all customer-contact employees because of abusive supervision, or punitive management policies, or intra-group competition. Or, the failure could produce nothing except a bitter former employee and a fearful and cautious group of clerks.

The challenge for business owners is to resist the seduction of the simple, uncomplicated, mistaken desire to scapegoat a failure and dismiss it. Desai found that not only are future failures assured, opportunities to improve performance aren't even noticed. In his research, when hospital administrators investigated deaths assuming multiple breakdowns across a variety of patient care contacts, they also noticed and adopted an improvement in surgical technique for CABG surgeries (using mammary veins) which led to dramatically improved outcomes and eliminated fatalities completely at one hospital. But executives at hospitals who viewed failure as isolated events didn't even notice this innovation.

Failures in most business settings aren't spectacular. They involve breakdowns in customer service, storing unsaleable inventory in warehouses, angry people making inadvisable choices, and the loss of assets or business, yet they offer the same opportunities to learn and improve, and they offer the same trap to isolate the location of failure, respond on that level, learn nothing, and miss opportunities to improve and to prevent future failure. We can do better.

Failure is an opportunity to learn. It is a signal to get to work to understand how it occurred and to devise ways to make it more difficult for the same failure to occur again. Firing the scapegoat won't do it.


© Management Resources

Keywords: scapegoating, failure, learning

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