In a large percentage of circumstances, organizations find themselves praising the narrow escape of a potentially massively harmful event.  A recent article in The Harvard Business Review describes how your organization can benefit from not simply marking these narrow escapes up to good luck but instead using the circumstances involved to prevent yourself from being put in the same situation some day in the future.  The article presents seven key strategies that your organization can use to keep track of the “near misses” and use that information to capitalize on preventing major harm from occurring at your organization. 

The information that you can obtain from the near misses can be used for statistical analysis to help decrease the likelihood of harmful events from occurring.  Because the majority of these disasters do not occur completely unexpectedly, organizations need to pay closer attention to the latent errors that are occurring whether it be part of the business decision or the just the environment surrounding them.  It is of dire importance that organizations learn from their mistakes instead of continuing to operate under the same circumstances, believing that what they are doing is correct when it is potentially waiting to be the downfall of their organization.

Real Life Situations

There have been quite a few scenarios that have occurred recently that would have all been avoided had the companies used the clear signs that right in front of them.  One great real life situation that just occurred within the past year was when Apple released their new version of their popular product, the iPhone.  Immediately after the product was released to the public, the consumers began to file complaints about calls being dropped and weak signal strength.  When this was brought to the attention of programmers of the product, they immediately knew what was causing this since they had noticed the same problem in most of the smart phones in the market over previous years.  Instead of repeating the same mistake, Apple could have directly addressed the issue and not released a product that they knew would garner complaints from the consumers.

Another great real life situation that occurred recently was when Toyota had to recall a large number of their Lexus brand vehicles due to a malfunction with the accelerator.  This problem unfortunately was brought to light due to the death of a family whose accelerator got stuck to the floor and led to a fatal car crash.  Once again, in this situation Toyota had received previous complaints about accelerators in their cars since 2001, which fortunately did not lead to death.  These thousands of near misses should have been a sign to Toyota to capitalize on taking care of the problem instead of allowing it to continue to occur and eventually lead to a family’s death. 

It is as simple as paying attention to the detail instead of patting yourself on the back when these near misses occur that can save your organization from facing potentially extremely costly litigation efforts and damages from being sued by consumers for a faulty product or lost reputation.

Seven Key Strategies

The article describes seven key strategies to consider:

  • Pay attention to high pressure situations
  • Keep track of deviations from the norm
  • Research the root cause of the issues
  • Force employees to be accountable
  • Role play worst case scenarios
  • Look at projects on a stage by stage basis
  • Reward people for taking responsibility for mistakes

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ERM Enterprise Risk Management Initiative 2011-04-01