KEY CONCEPT

Not only can people learn from errors, but errors are an important part of the innovation process. However errors can have significant costs and the fear of the negative aspects of error can lead to an exclusive focus on prevention policies. Recent research emphasises the need for companies to embed within their culture ways to reduce the negative consequences of errors and enhance the positive through effective error management.

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IDEA SUMMARY

Learning from errors is central to human development. Learning in a business context occurs best when there is a mind-set of acceptance of human error, and furthermore the experimental trials that lead to successful innovation, new processes and better performance necessarily entail errors on the way.

Due to the potential costs and negative, sometimes disastrous, effects of errors, organizations often focus entirely on error prevention as a strategy for dealing with errors. This can be a mistake as prevention needs to be supplemented by ‘error management’ – an approach directed at effectively dealing with errors after they have occurred, with the goal of minimizing negative and maximizing positive error consequences (examples of the latter being learning and innovation).

In their review Michael Frese, from NUS Business School, and Nina Keith, from Technische Universität Darmstadt, start by defining goal-directed ‘action errors’ as distinct from inefficiencies and violations, and review research on error-related processes affected by error management (error detection, damage control). They then consider empirical evidence on positive effects of error management in individuals and organizations, along with emotional, motivational, cognitive, and behavioural pathways of these effects.

Previous research undertaken by Michael Frese, and others, confirmed that a high organizational error management culture (one that included good practice in communicating about errors, detecting, analyzing, and correcting errors quickly), is pivotal to the reduction of negative and the promotion of positive error consequences and was positively related to company performance. In one study data from 65 Dutch organizations revealed that organizational error management culture was significantly correlated with both organizational goal achievement and economic performance. This finding was confirmed in a second study, using change of profitability data from 47 German organizations.

People do not like to be seen making errors, which are associated with poor performance and often a cause of shame. Organizations typically attempt to prevent errors from occurring in the first place by blocking erroneous actions. In contrast, the error management strategy starts after an error has occurred and attempts to reduce negative error impact through systems design and employee training. Error management involves controlling damage quickly, and reducing the occurrence of particular errors in the future, while at the same time optimizing the positive consequences of errors, such as long-term learning, performance, and innovation.

The error management process involves:

1. Error detection – this is the most important part, because without error detection, there cannot be any useful error management. This is a complex area involving both individual and team responses to errors and the necessary trust and transparency needed for the effective reporting of errors.
2. Damage control – timing is crucial here. A long time frame can mean feedback is inadequate to provide warning signals; however, the longer time frame allows the active development of early warning signals.
3. Reducing the chances of error cascades – one error leading to the next.
4. Systems damage control – systems can make it easier to control damage. Computer programs have been developed for this purpose.
5. Organizations’ and teams’ damage control – when errors are not communicated quickly, wrong decisions may be taken and organizations will be are put under strain.
6. Damage control within the social realm – re-establishing trust and gaining forgiveness. Errors can affect the social relationships of a team or organization; so it can be important to repair trust by apologizing for making an error.

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BUSINESS APPLICATION

This research should encourage organizations to introduce error management strategies as a way to foster learning and innovation, and boost performance.

The research shows that error management training leads to learning and improved performance. To bolster the positive effectives and to ensure learning from error, controlling negative emotions after an error is important. Error management training can be used to help participants switch from a (self-) blaming mind-set to a learning-oriented mind-set.

Emotional processes associated with making errors can affect individual, teams and organizational performance. So organizations should foster an environment that accepts human errors and supports learning from errors.

Organizations should also develop an effective error management culture to improve their capacity for innovation. In doing so they should bear in mind that:

• Innovation processes are inherently contradictory and chaotic: Innovative processes involve so much information that is unclear that errors are frequent. Creative ideas sometimes appear by chance and errors help this serendipity during the innovation process.
• Experimentation is crucial for innovation: Since there is no prior knowledge of what constitutes a useful innovation, experimentation is necessary. However experimentation should be done methodically, rather than at random, so that mistakes are made quickly, and their impact controlled.
• Errors lead to exploration: Errors make people more aware of their actions and their environment, which can in turn spark exploration and lead to new areas of inquiry and innovations. It takes an open mind to make the link, turning an accidental or surprising phenomenon into an innovation. A closed mind that views errors as only negative will simply discard the results and move on.
• Entering uncharted territory raises the likelihood of errors: New ideas, innovative products or services imply entering new and unchartered territory. Inherent to this is that there will be less knowledge and therefore more errors are likely. Entrepreneurs in particular have to explore and improvise as they seek to build their business and connect with customers.
• Errors and creativity are related: Some creativity techniques such as brainstorming are precursors of error management. Brainstorming begins with a phase in which one should voice whatever comes to mind.  Only in the second phase of evaluation is the value of ideas put to the test. Such creativity techniques implicitly differentiate between errors and error consequences, allowing and enabling errors as important for creativity.
• Error management is closely tied to performance ambidexterity: An organization that is ambidextrous is one that is able to both experiment with new products while at the same time refining its existing products or services. This requires an organizational culture that is open to and accepting of errors. 

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REFERENCES

Action Errors, Error Management, and Learning in Organizations. Michael Frese & Nina Keith. Annual Review of Psychology (January 2015).

Organizational Error Management Culture and Its Impact on Performance: A Two-Study Replication. Cathy van Dyck, Michael Frese, Markus Baer & Sabine Sonnentag. Journal of Applied Psychology (2005).

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