An online monthly research publication by the Ivey Business School 

Volume 14, Number 10
October 2008

To err is human

Fernando Olivera finds ways for organizations to learn from mistakes

It’s a well accepted notion that people learn from their mistakes. Yet most organizations fail to take advantage of the learning opportunities that arise from the mistakes of their employees.

Mistakes routinely happen, says Ivey Professor Fernando Olivera, whose recent research focuses on error reporting in organizations. Sometimes the consequences are severe: medical error, for example, is one of the leading causes of death in the United States. But even small mistakes can hurt a firm.

Most existing research looks at group and individual learning in the context of positive reinforcement. Learning from errors is more complicated, says Olivera. “Mistakes are hard for people to talk about. There is a tendency to ignore them, blame others, or pretend they’re irrelevant. Whenever that happens we give up a learning opportunity.”

Olivera and co-author Bin Zhao recently published a paper in the Academy of Management Review that sets up a theoretical framework for error reporting. Since then Olivera has been collecting qualitative data from the restaurant business, actually observing at first hand errors that occur as orders are taken from customers, passed on to the kitchen, and delivered to the table. “The way people experience error in the restaurant business is strikingly similar to other service industries,” he says. “When people make mistakes they experience many negative emotions, such as embarrassment, guilt, and even fear that they are going to lose their jobs.”

If individuals don’t report their mistakes, it’s difficult for organizations to know they occurred. But getting people to talk openly about errors they can hide is not easy, says Olivera. “We are conditioned from early childhood to feel badly about our mistakes,” he says. “To get positive results, we need to figure out ways to help people cope with these negative emotions.”

Training is one way to help employees experience mistakes and learn from them. The airline industry, for example, has systems that create conditions for people to make and experience mistakes during the training. Another approach is to develop a culture that promotes candid discussions when things go wrong. This creates an environment in which people feel positive about reporting mistakes, rather than worrying about being punished.

Olivera also finds from his research that errors are not reported because people often don’t know they make them. Organizations sometimes set up their systems so that the consequence of making an error shows up elsewhere, with no feedback loop. For example, a travel agent might make a mistake that turns up when the customer arrives at the airport. If the mistake is solved by the airline, the agent might never know about it unless the customer subsequently complains.

Some employees are not aware of their mistakes because they don’t have sufficient knowledge about their jobs. “In places where there is high turnover, like the restaurant business, people sometimes learn work-arounds – ways to do things quickly but against protocol,” says Olivera. “These are often passed from one employee to another, but detection doesn’t occur because people don’t realize that what they are doing is wrong.”

There are ways for organizations to detect errors other than relying on employees to report them. Errors and their solutions often leave traces. In restaurants the system often captures data about mistakes that occur through orders being cancelled or discounts agreed upon. Customer satisfaction surveys, if designed well, can often pick up important information.

Organizations must help employees to recognize when they might have created the conditions for someone else to make a mistake. “Employees need to be aware of how their actions relate to the actions of others,” says Olivera. “We often don’t train them to do that because we want them to be very good at doing their job and not get distracted by anything else. Understanding the sequence of steps in any kind of production process is important.”
 

Professor Olivera's Homepage

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