Wednesday, 25 November 2009

When things go wrong: Collective learning

Unless you have successfully eliminated a risk, there is always a probability, however, small, that negative outcomes will happen.  The impact can range from the highly specific and individual (such as personal injury) to the general and communal (damage to the reputation of the business).  Any negative consequences are regrettable, but we can make them worse if we don't learn from them.  By failing to learn the lessons of our mistakes, we allow negative outcomes to extend into the future, instead of limiting them to the present.

The learning that comes from considering the outcomes of decisions is likely to be collective rather than individual.  Individuals who frequently make a large number of decisions that are similar in nature, and stay around to observe the results, are best placed to learn from them.  Weather forecasters and poker players are examples of this rare breed.  Managers, unfortunately, are much less likely to make frequent decisions of a similar type and be able to learn from them.

In business, individuals are likely to move on, get promoted or retire before the consequences of their most significant decisions play themselves out to a conclusion.  This makes it vital to embed the learning from major decisions in the organisation, rather than leaving it to individuals:
  • record the information that supports decisions
  • document the decision making process
  • document responses to problems arising
  • share information between decision makers

Measures like these help to prevent information about how decisions were taken from being lost when the decision makers leave the company.  Losing such information could potentially pose a major strategic risk to the organization, since it could result in big mistakes being made again and again.

The recording of information about decisions needn't be a huge undertaking.  Even brief notes on how a decision was taken can be illuminating when returned to a later date.  As we've seen, people have a strong tendency to 'edit' their memories to fit their own perspective.

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