Learning from Rare Events

Accidents and other rare events can actually benefit a workplace by providing it with a ‘brutal audit’ of its strengths and weaknesses.  How can a disaster can be turned into an opportunity?
I studied the Baltimore & Ohio Railroad Museum, which provides a remarkable case study for those of us interested in resilience how an organization can not only survive but thrive in the wake of a catastrophe. Baltimore’s B&O Railroad -- familiar to anyone who plays the board game Monopoly -- is the birthplace of American railroading. In February 2003, a record-setting snowstorm resulted in a roof collapse in the main building of the museum, a historic round house.

It is difficult to describe the sheer size of this building, which is often compared to a cathedral, and the magnitude of the damage that occurred. The roof collapse resulted in the destruction of many of the Museum’s artefacts and presented some tough choices to its leaders: initially, they weren’t sure whether the Museum would be able to recover. However, in the end they were able to accomplish something remarkable, which was to use the disaster as an opportunity to step back and re-imagine the museum and create something even better than what existed before.

At each step of the recovery, potential problems were turned into positive outcomes. For example, they realized that although the trains were insured, the insurance fell short of what would be required to send them out for repair. The insurance money was instead spent to establish a facility where the trains could be repaired on-site. This facility is now used by other organizations for their trains as well, and can be visited via a moving tourist train that is itself a popular attraction.

These days, if you ask staff about the disaster, they will tell you it was the best thing that ever happened to their organization. The Museum is now much larger, and the new round house is now accessible, both wheelchair and stroller friendly. The Museum has increased and diversified its attractions and activities, and as a consequence of these changes, its revenues have increased substantially.

Describe how this amazing recovery was accomplished.
To make sense of the roof collapse and the very unusual turnaround story that followed, we viewed the disaster as an interruption rather than as a one-time-only rare event. It is difficult to learn from rare events because they almost never recur. It is more helpful to view disasters as just magnified versions of the sort of interruptions that take place all the time in an organization. An interruption allows an organization to step back and ask what it is doing and where it is going. In the case of the museum, it was transformed from a place that children were forced to visit on their school trips to being a lively and up-to-date attraction.

In addition to providing an occasion to reflect and recalibrate, crises provide plenty of attention to an organization. Through the media coverage that followed the roof collapse, staff had an opportunity to find out what people thought about their institution, and this feedback them reinvent it.  Also beneficial was the fact that, at the time of its near destruction, the museum was already gearing up for an important event, the ‘Fair of the Iron Horse’, to mark the 175th anniversary of American railroading.  As part of the preparation for the fair, the Museum had audited its own strengths and weaknesses, and discovered a number of problems: the telephones were not connected to each other, the computer systems were completely outdated, there was insufficient staff to handle a large-scale event. By fixing these problems, and by improving ties with the media and the public, the museum was in a better position to deal with the large-scale crisis of the roof collapse.

Framing the collapse in positive terms was an important first step in emerging from the disaster. The senior leadership and board of directors were quick to decide that the museum would survive, and put in place measures to ensure that the comeback could occur. Simple things mattered, like the decision by one manager to list her own phone number on the Museum’s website to give media a central contact, or the changes made to the website to channel donations and offers of support from the community.

In the ensuing months, the museum’s leadership did an admirable job of making sense of the situation and sharing updates with staff and the public at large. The executive director, in particular, was praised for his ability to manage his emotions during a difficult time in order to project an image of strength. Other steps included starting a blog to provide constant updates on the rebuilding efforts. From a human resources standpoint, the staff was entirely reorganized to best accomplish the recovery of the Museum’s holdings from the rubble.

What leadership style is best suited to managing such a crisis?
Leaders have many different styles of interacting with people. There are a core set of behaviours that are effective in a crisis, but leaders can enact these in whatever way is most comfortable for them.  The first crucial stage is noticing that there is a problem or crisis and viewing that problem from both the perspective of the organization and that of the customer. One of the critiques levelled against Toyota during its recent troubles is that the company was not sharing information with the public as quickly as it might have.

In addition to formulating a plan to deal with a crisis, leaders must also think of how to keep the organization functioning during bad times. Because of the way we are biologically hardwired, people tend to react to a threat with the ‘flight or fight’ response: we narrow information processing, conserve resources and try to protect ourselves at the very moment we would be best served by remaining open and flexible. Resilient organizations, on the other hand, are capable of adapting to the circumstances of a crisis. When it comes to leadership behaviour, acting with integrity and doing everything possible to regain trust are crucial at this stage.

The final stage involves learning from the experience, and embedding the wisdom of best practises back into the organization. This is where many companies run into trouble: they do not develop new routines and protocols, but make the assumption the future will be problem free.

What are some other examples of organizations that have become stronger as a result of surviving a serious mishap?
This will be a short answer because most organizations do not fare well in the face of a crisis. Many are able to recover and get back to the same spot where they were before, but few actually improve, as the Railroad Museum did. A rare positive example is the Johnson & Johnson response to the Tylenol poisonings of 1982. After a number of people in the Chicago area died from cyanide deposited in Tylenol capsules, the company recalled all 31 million bottles in circulation, at great cost, and put out ads in the national media cautioning the public not to consume any acetaminophen products. The company’s clear, thorough and authoritative response prevented further deaths, and has gone down in history as pitch-perfect crisis management. Johnson & Johnson returned to profitability within the year, and is still one of the world’s most successful and respected firms.

How can organizations learn from and tap into the transformational opportunities offered by a crisis without having to undergo a major disruption?
Many organizations devise crisis-management plans by thinking through potential problems before they happen. What is interesting is that the process of developing the plan is often more valuable than the plan itself. In the case of the Railroad Museum,  the papers outlining its crisis response plan were locked in the building and inaccessible. Staff, however, remembered the lessons from the planning exercise: they had developed capabilities that were suited to any crisis situation.

Organizations can also improve their ability to handle disasters by managing smaller disruptions. Some firms even create interruptions – called ‘autogenic crises’ – to teach their staff crisis-management skills. Years ago, one of the heads of Visa was famous for shaking things up for his employees, in a manner that was perhaps more stressful than strictly necessary. The value lies in trying to stretch employees’ abilities to do things differently. Learning from other organizations and their experiences is also greatly beneficial.

In addition to crises or disasters, errors in organizations -- particularly in health care -- have begun to receive significant attention. What are some ways these errors can be reduced?
Medical error is an urgent problem. In fact, I left my practice as a family physician to go back to school to learn more about how to reduce errors. We all know that errors in health care are prevalent. In 2000, the Institute of Medicine released a report that suggested that 44,000 to 98,000 patients were dying every year because of preventable medical error – a staggering number that is the equivalent of three jumbo jets crashing every two days. Because human beings are involved in the delivery of health care, and because people are fallible, we will likely never be able to reduce the margin of error to zero.

The work of health care is complicated, and it is often difficult to detect and prevent errors as they occur in real time. Some errors are only apparent in hindsight; others are detectable in real time, but little can be done to prevent harm to patients, either because the time between the error and its consequence is so brief or because there is nothing that can be done to remedy the error. It is the errors that are detectable in real-time and tractable – whereby something can be done to minimize harm – that we need to focus our attention on.

There are usually many different points along the way where errors can be detected. At each step, there is the potential to stop the error. Errors only harm the patient if they manage to get through all of the defences put in place: this is sometimes described as the ‘Swiss cheese’ model of error, where all the holes need to line up for harm to reach the patient. Yet, for errors to be detected, people need to speak up when they notice something has gone wrong in the care of the patient. In a recent study that my colleagues and I conducted at a large U.S. teaching hospital, we discovered that residents spoke up about preventable errors only about 40 per cent of the time. We can do better.

Reducing error rates means, in part, creating a culture where people feel safe in speaking up about issues of concern, by training staff to recognize and report errors. Leaders set the tone for the organization. There are people serving as leaders throughout an organization, and each must make it permissible to bring up issues of concern. They can do so by asking employees to voice their concerns, and then modelling behaviour by reacting to criticism without a sense of recrimination or grievance, so that others see that it is safe to speak up.

Why don’t people more often speak up about issues of concern?
The moment in which a person decides whether or not to voice a concern is a fragile one. A great degree of individual confidence is needed, since much of the time, the error is not in plain sight. Organizations do well to encourage their employees to speak up -- even on a hunch -- in keeping with the old classroom adage, ‘there are no stupid questions’.  

“If I speak up now, will something bad happen to me or my colleagues?” is usually the first question a person asks when they detect a problem. In a learning environment like a teaching hospital, you want people to ask questions; on the other hand, there is a premium placed on appearing confident and in control. There may be negative consequences for the employee, the supervisor, the boss and the fellow employees if the unit’s reputation is put into question.
 
“If I voice my concerns, will anything come of it?” is the second logical question a whistleblower will ask. Studies show that in most organizations, those who speak up once or twice and see nothing come of it will become quiet the next time an error occurs. This is why it is so important for those around that person to respond immediately and with proper diligence.

Marlys Christianson is an assistant professor of Organizational Behaviour and Human Resource Management  at the Rotman School of Management.  She is also on the faculty of the University of Toronto Centre for Patient Safety and is an associate of the Rotman Collaborative for Heath Sector Strategy. Previously she was the chief of medical staff at the Olmsted Medical Center Hospital in Rochester, Minnesota.  Rotman faculty research is ranked #11 in the world by the Financial Times.

[This article has been reprinted, with permission, from Rotman Management, the magazine of the University of Toronto's Rotman School of Management]