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  • The characteristics of High Reliability Organizations

    The characteristics of High Reliability Organizations

    Today, companies are faced with ever-increasing complexity. On the one hand, companies themselves are complex, socio-technical systems, and on the other hand, they are embedded in a complex environment with numerous known and unknown factors. How can an organization successfully keep up with these constantly increasing demands?

    In this article, I will focus on High Reliability Organizations (HRO) and the related High Reliability Theory (HRT). The idea of High Reliability Organizations originally comes from organizations that successfully operate in high-risk industries. Examples include air traffic control, nuclear power plants, aircraft carriers, power grid operators, and similar fields of activity. However, I am personally convinced that the insights gained from HRO and the associated operational principles can be transferred to any organization and – like the classic HRO – will make them more successful.

    The emergence of the High Reliability Theory

    In 1984, sociologist Charles Perrow published his book “Normal Accidents: Living with High-Risk Technologies”, in which he introduces the Normal Accident Theory (NAT) using an analysis of the reactor accident in the nuclear power plant Three Mile Island in the USA in 1979. His reasoning was that complex and tightly coupled systems would have to lead to a catastrophic accident sooner or later. It therefore was irresponsible to operate such systems, for example nuclear power plants. This theory appears to be absolutely plausible; however, it holds a problem: it cannot be falsified. Because – and this several times was Perrow’s answer to criticism – even if there has never been an accident, it is just a matter of time before it happens. Who can refute a forward-looking statement?

    NAT has rightly received a lot of attention in safety sciences and Perrow has been cited thousands of times. But the question arose as to why there are still organizations that can successfully operate complex, tightly coupled systems with virtually no incidents. This question inspired the Berkeley scholars Gene I. Rochlin, Todd R. La Porte, and Karlene H. Roberts to study such organizations more closely and to publish an article on High Reliability Organizations in 1987 in response to Perrow’s NAT: the High Reliability Theory (HRT). Using a best-practice approach, the Berkeley scholars examined why operations on an aircraft carrier (in peacetime), where aircraft move at high speed and in tight space in the presence of dangerous goods such as fuel and weapons, do not (or did not yet) lead to a catastrophic accident.

    Like NAT, HRT received a lot of attention. As a result, it was followed by numerous publications, and there are still articles and books published today on this topic. Of course, Perrow’s answer to HRT did not wait. While the Berkeley scholars considered their work as complementary to NAT, Perrow didn’t agree with this assessment and contradicted directly. After 1987, numerous studies and surveys were conducted in different industries such as nuclear power plants, aircraft carriers (in peacetime), power grid operators, air traffic control, etc. These studies have contributed to the further development of the HRT. In 2001, Karl E. Weick and Kathleen M. Sutcliffe published the first edition of “Managing the Unexpected”, in which they broke down the findings to five HRO principles that I will explain further down. “Managing the Unexpected” was published in a second edition in 2007 and in a third edition in 2015.

    The five HRO principles

    The first three of the five HRO principles are primarily to be understood from a prevention perspective. The focus is on preventing serious incidents and accidents.

    Preoccupation with failure. To deal with possible failure means to think about what could go wrong and to look for weak signals in the system. These are activities that can be taken over by effective risk management but should also be firmly anchored in the everyday work routine of all employees. When analyzing risks, it is important to understand what could happen. However, it is even more important to get to the bottom of the question of why something could happen.

    Reluctance to simplify. We tend to look at something in a way that fits our personal worldview. This applies to both individuals and entire organizations. With the reluctance to simplify, the existing worldview is questioned, and situations are viewed from different perspectives.

    Sensitivity to operations. In an HRO, operational processes set the pace of the organization. The organization has a high awareness of details and identifies weak signals. The quality of relationships is strong. There is a culture of trust, which enables employees to speak openly about irregularities and concerns in connection with operational processes.

    But an HRO is also aware that, despite all efforts, mistakes cannot be completely avoided. The last two of the five HRO principles focus primarily on coping with errors so that they do not develop into a crisis.

    Commitment to resilience. Errors also occur in HROs. HRO do not try to be error-free, but on the one hand they have the ability to quickly recover from mistakes before a crisis arises, and on the other hand they have the ability – if a crisis does occur – to quickly get out of this crisis.

    Deference to expertise. If an HRO is in a critical situation or even in a crisis, the decisions to deal with this situation are made “at the front” by the relevant experts and not necessarily by the management. Figuratively speaking, the hierarchy pyramid turns upside down. Once the crisis has been overcome, the hierarchy pyramid will normalize again.

    Why become a High Reliability Organization?

    The five HRO principles support a company to become a mindful organization that is able to focus on operational processes, detect weak signals, learn from irregularities, and manage potentially dangerous situations before they turn into a full-blown crisis. The benefits that result from this are manifold. For example, losses in connection with a crisis – be it a production shutdown or a far-reaching scandal – can be avoided or limited, or a significant competitive advantage can be achieved by optimizing operational processes. If a company is perceived as an HRO from outside, this can have a positive impact on public perception and can also play a decisive role in the war for talent.

    In conclusion, it can be said that the concept of the High Reliability Organization not only supports companies in high-risk areas, but basically supports all companies in successfully sustaining themselves in their increasingly complex environment and in creating a competitive advantage.

  • How good reporting makes your organisation safer

    How good reporting makes your organisation safer

    A reporting system combined with a positive reporting culture enables a company to learn from incidents and reduces the likelihood of further incidents or even accidents. But the way towards a good reporting culture is challenging and has many stumbling blocks. It is about addressing fears and creating trust. In this way, the organization can become safer and more productive in the long term with the positive effects of its reporting system and reporting culture.

    Today, numerous companies are subject to regulatory requirements to have an incident reporting system. A corresponding tool and the associated process can be introduced relatively quickly, which often means that the regulatory requirements are met. But even if a reporting system is physically available, this does not say anything about the reporting culture and thus about the quality of the reporting system.

    In this article I will look into the necessity and the advantage of a positive reporting culture and the pre-requisites for it.

    Of course, an incident reporting system is not only useful for companies that are legally obliged to do so. Every organization benefits from a good-quality reporting system and a positive reporting culture, in that it becomes visible what is happening in the organization and weaknesses can be identified and remedied. Depending on the industry, this leads to an increased level of safety and trust among stakeholders, or to higher efficiency and a decrease in production losses. With a positive reporting culture, a significant competitive advantage can be achieved. Furthermore, a reporting system is an important management tool for senior management.

    Companies are complex, socio-technical systems, the property of which is that it is not possible to know, let alone understand, all of the interactions within the organization. With reports directly from inside the system, that is, from employees at all levels, an organization receives important information from the various areas. These reports can provide information about existing processes, risks, established standards, hidden or open deviations from processes, uncertainties of employees, and so on. Such information enables the organization to identify weaknesses and thus to continuously improve and develop.

    For this it is important to get away from the attitude that humans are the weakest link in the chain and that mistakes are seen as weaknesses. Rather, it is helpful to consider that employees come to work to do a good job. If mistakes happen, it is important to understand why this action made sense to the person in this specific situation. If the employee is just punished for their mistake or – in an extreme case – excluded from the organization, the system has not learned anything from the mistake, and it is just a matter of time until some other employee makes the same mistake.

    The first step is the introduction of a reporting process, which is supported by a more or less extensive IT tool, depending on the situation. Unfortunately, many organizations fail in the following step of establishing a positive reporting culture. Reasons for failing are insufficient employee trust in the organization, fear of suffering negative consequences, or doubts about the effectiveness of incident reports.

    Employee trust

    At the beginning, voluntarily reporting errors is a difficult task for many employees. It is often our first reflex to look around to see whether someone has noticed our mistake or not. We would most like to sweep the mistake under the carpet, especially when nothing has happened, which fortunately is the case with most mistakes. This on the one hand out of shame, on the other hand out of fear of negative consequences, be it direct consequences in connection with our employment or negative reactions of our colleagues. Reporting an error means making yourself vulnerable to others – superiors and colleagues – and requires a high level of trust.

    Even if a colleague’s mistake is noticed, the hesitation to report it is often great. This may be due to a manager’s mistake, or you may not want to be perceived as someone who denounces the other person. There may also be the fear that someone else might report your own mistakes.

    In order to be able to deal with errors openly, a high degree of trust of the employees in the organization with all their employees must be present. It is important that errors are reported solely to improve the system and that the report does not contain any hidden personal agenda. Employees need to know that they will be valued and not punished for their reports.

    Anonymous reporting

    Of course, an organization may substitute trust by anonymity. However, no organization can fully guarantee this anonymity. Furthermore, anonymity significantly limits the organization’s ability to learn from a report, since a detailed analysis of the report is hardly possible. In a first step, such a substitution may make sense, but it should not stay that way. In a sustainable, positive reporting culture, anonymity hinders the organization’s ability to learn.

    Doubts about the effectiveness of a reporting process

    The step of submitting a report is not only associated with the expectation that the report will not have a negative effect on the reporter, but also that the report will be taken seriously. If there is no feedback from the reporting process, the reports will soon be viewed as meaningless and a waste of time. The number of reports will decrease.

    For the credibility of the reporting system, it is essential that the reporter receives feedback on the report. This can be a comprehensible reason why the report is not being followed up, or information about what will be done with the report. It is also important to connect changes that are introduced on the basis of a report in communication with the corresponding report – in a mature reporting culture even with the reporter themselves. This further underlines the meaningfulness of the reporting system.

    What needs to be reported?

    Reporting is often limited to reports of events that have already occurred. These are events that must be reported in accordance with the reporting process, or events where reporting is voluntary, i.e. at the discretion of the employee. These backward-looking reports are without any doubt useful and help companies to make adjustments to the system to make it more robust based on past events.

    It often happens that people in the organization say that they have seen this event coming for a long time and that it was only a matter of time for the event to happen. It could have been avoided proactively. For this reason, it is important to give employees the opportunity to express concerns and fears in the reporting system. Optimally, the employees also actively participate in problem solving through a suggestion for improvement.

    Conclusion

    The introduction of an effective reporting system is a challenge that should not be underestimated. The implementation of the process and, if necessary, an IT tool follows the demanding cultural change within the organization. In order to achieve this, numerous employee fears must be addressed, which initially stand in the way of this change. If the employees can be shown in a top-down approach that they can trust the organization and that the newly implemented reporting system will bring benefits to everyone together, the ideal conditions are created for a cultural change towards a positive reporting culture.