how to avoid catastrophe
TRANSCRIPT
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HOW TO AVOID
CATASTROPHE
A presentation
By G-10:
Shruti Gupta
Guldeep Singh
Satyam Kumar
Puneet Jain
Karuna Miglani
Mohit Gupta
Prajwal Menon
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INTRODUCTION
Near misses are not just close calls that could have been a lot worse but they c
be unremarked small failures that penetrate day to day business that cause no
immediate harm.
People commonly misinterpret and ignore the warnings embedded in these fail
Each near miss, rather than raise alarms and prompt investigations, was instead
as an indication that existing methods and safety procedures worked.
Various researches showed that every disaster was preceded by a number of ne
misses and most of these misses were ignored or misread.
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COGNITIVE ERROR
Research shows that particularly 2 cogni tive biasesconspire to blind managers misses.
The first one is: Normali zation of deviance. It is the tendency to accept anomal
particularly the risky ones as normal over the time.
The second cognitive error is Outcome Bias. When people observe successful
outcomes they tend to focus on the results rather than focussing on the process t
to it.
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ROOTS OF CRISIS
Organizational disasters do not have a single cause.
These disasters are triggered by latent errors.
Latent errors are seemingly small, unimportant human errors, technological failu
or bad business decisions.
These latent errors when combined with enabling conditions lead to significant
failures.
Near misses also arise from the same preconditions but in absence of enabling
conditions, they produce only small failures and thus go undetected.
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EXAMPLES
BAD APPLE
Immediately after the launch of Apples iPhone4 in June 2010, customers bcomplaining about dropped calls and poor signal strength.
Apple initially blamed the users only for holding the phone in a wrong way
covering the antenna.
Customers found Apples posture disrespectful and also filed a lawsuit aga
alleging defective design.
This reputation crisis of Apple reached crescendo when consumer reports dto recommend iPhone4.
They eventually had to acknowledge software errors and offered updates to
owners.
If apple would have recognized this latent error and responded, it would ha
avoided this crisis.
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SPEED
WARNING
On August 28,2009, California Highway Patrol officer
Mark Saylor and 3 family members died in a fiery crashafter the pedal of the Toyota Lexus Sedan he was
driving stuck and thus accelerating the car to 120 miles
per hour.
Before that Toyota had received about 2000 complaints
of unintended acceleration among its cars.
Ultimately Toyota halted the sales of its eight models
sustaining an estimated $2 billion loss in North America
alone and a huge damage to its reputation.
Toyota could have averted this crisis by paying
attention to customers complaints and reacting within
time.
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JET BLACK AND BLUE
Since the time of operation jet airways has taken aggressive steps against bad weat
Instead of cancelling flights it asked it pilots to pull away from gates in severe wea
be near the front of the line when runways were cleared for takeoff :even if that me
planes would sit for some time on the tarmac.
For many years it was working fine, but on feb 14,2007 a massive ice storm at Ne
F. Kennedy International Airport caused widespread disruption.
Pilots found themselves stuck on the tarmac and with no open gates to return. Passe
several planes were trapped for upto 11 hours in overheated, foul-smelling cabins wi
or water.
Jet Blue managers ignored the risk and saw only successful launched flights. This w
combined with the enabling condition ie the ferocious ice storm, turned the latent err
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RECOGNIZING AND PREVENTING NE
MISSES
Heed high pressur e
Greater the pressure to meet performance goals such as tight schedules, cost, or produ
more likely managers are to discount near-miss signals or misread them as signs of soun
making.
When people make decisions under pressure, psychological research shows, they ten
heuristics, or rules of thumb, and thus are more easily influenced by biases.
Organizations should encourage, or even require, employees to examine their decisio
pressure-filled periods.
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Learn from deviations
Managers should seek out operational deviations from the norm and examine wh
reasons for tolerating the associated risk have merit.
Eg: As the Toyota and JetBlue crises suggest, managers response when some asp
operations skews from the norm is often to recalibrate what they consider acceptabl
Research shows that in such cases, decision makers may clearly understand the st
represented by the deviation, but grow increasingly less concerned about it.
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Uncover root causes
When managers identify deviations, their reflex is often to correct the symptom rathe
cause.
Eg:Apples response when it at first suggested that customers address the antenna pro
changing the way they held the iPhone.
Eg: A near miss at Delnor-Community Hospital, in Geneva, Illinois. Two patients shar
room had similar last names and were prescribed drugs with similar sounding namesC
Cytoxan. Confused by the similarities, a nurse nearly gave one of the drugs to the wrong
Luckily, the mistake was caught in time .The hospital immediately separated the patients
policy to prevent patients with similar names from sharing rooms in the future.
Demand accountability
Even when people are aware of near misses, they tend to downgrade their importance
limit this potentially dangerous effect is to require managers to justify their assessments
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Worst-case scenario
People tend not to think through the possible negative consequences of near misses
Apple managers, for example, were aware of the iPhonesantenna problems but pr
imagined how bad a consumer backlash could get. If they had considered a worstcase
might have headed off the crisis, research suggests.
Evaluate projects at every stage
When things go wrong managers evaluate it.
When they go well, only few do formal reviews of the success to capture its lesson
misses can look like successes, they often escape scrutiny.
Eg:Edward Rogers, chief knowledge officer at NASA instituted a pause and learn
which teams discuss at each project milestone what they have learned.
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Reward owning up
Seeing and attending to near misses requires organizational alertness, but no am
attention will avert failure if people arent motivated to expose near misses or eve
are discouraged from doing so.
E.g.: An enlisted seaman on an aircraft carrier.
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THANK YOU