Human Error in Business Systems: Costly and Pervasive, but Avoidable

“Error is a hardy plant; it flourishes in every soil.”

Martin F. Tupper

With the current emphasis on positive thinking and affirmations, people often overlook one of the biggest drains on profit margins— human error. Outside of engineering circles, it rarely gets discussed. But acknowledging, understanding, and incorporating the problem of human error into strategic planning processes can be very good for the bottom line, no matter what business you’re in.

A costly example of human error

I recently had a conversation with a CEO whose business (installing swimming pools) suffered a $10,000 loss from an oversight on the part of a trusted employee. This CEO blamed himself for the incident, citing a pattern of management that he had slipped into as a contributory factor. 

In a sincere effort to foster a sense of “employee empowerment,” he had deemphasized his role in project management. An unfortunate by product, however, was confusion among his employees as to who was responsible for what. The result was that a key phase of the pool installation process (applying the proper sealant) was neglected in the confusion, and parts of the project had to be undone and reworked.

To avoid such errors in the future, he developed and implemented a strategic plan for project management that systematically factors in human fallibility as an integral component of the installation process. The benefits to his business have included increases in both customer and employee satisfaction, as well as noticeable improvements in his bottom line.

A constructive view of human error

I’ll be the first to acknowledge the value of optimism and positivity in business, but I’ve also seen too many cases in which preoccupations with positive talk have run amok and put businesses out of touch with reality. Human beings are prone to error, and denying that fact does nothing to improve a business. We can acknowledge this reality without being pessimistic and negative, and in fact turn it into an advantage. 

This has been done quite successfully by the military and in athletics. Past errors are carefully analyzed and the results of these analyses become the foundation for improving future performances. In like fashion, the best business leaders are masters at acknowledging problems and then using that knowledge in useful ways. Below is a simple example. 

During my college years I did electrical work under the supervision of a foreman, a devoutly Christian fellow, who never let his workers forget his simple credo, which was “Where there are human beings, there will always be imperfection.” Sounds like a grim view, but in actuality it was quite functional— he was able to apply this thinking on job sites in ways that made his crews exceedingly productive and all but error free.

Facing problems realistically

In some organizations, the mere mention of problems or errors is taboo, and that can be a bad sign. Prior to its declaration of bankruptcy a few years ago, this was one of the symptoms of decline in General Motors. Despite the serious erosion of the company’s market share due to bad management decisions, criticism of how things were being handled was actively suppressed. 

Young executives who expressed concerns regarding the direction in which GM was going were admonished not to express negative thoughts, and those that insisted on doing so jeopardized their futures. After the collapse, many senior executives admitted that errant thinking and action, coupled with denial, were significant inputs into the company’s decline.

Some limits of positive thinking

International business expert Leonard Goodstein, author of Consulting with Human Service Systems, points out that this is a classic symptom of troubled organizational cultures. People who point out real and obvious problems are typically criticized as cynics and naysayers, and suffer various forms of ostracism. In healthy organizations, however, “devil’s advocate” is a role that is typically encouraged.

Goodstein goes on to warn that in many cases, what is intended to be a culture of positive thinking is actually a culture of denial. Real problems exist, but are not being dealt with, either because of a lack of will or lack of competency.

The inadequacy of positive thinking alone may be one reason that the value of motivational speakers is increasingly being questioned by many business analysts.  Having an outsider come in and get employees revved up on positivity may produce a short term emotional high, but this quickly fades as nature takes its course and “business as usual” reasserts itself. If errant policies and practices are not corrected, the glow soon wears off.

Murphy’s Law applied to business

In all areas of human activity, things can, do, and will go wrong. The best business leaders are those who acknowledge and accept this reality. Such persons are not pessimists, they’re realists.  When things go well, they know how to make the best of it.  But they also anticipate problems.   

In many ways they remind me of “first responders” (firefighters, police officers, etc.), who are ready for emergencies before they happen.  And like those other professionals who are well prepared for what can go wrong, good business leaders also tend to be experts at preventing problems before they occur. What both of these groups have in common is that they are both well acquainted with the development and implementation of strategic plans.

Reducing error through strategic planning

Anyone familiar with business planning knows the importance of having clear conceptions of a mission, vision, values, goals, and objectives. There is no question that these need to be in order. What ultimately determines the success for failure of a business, however, is execution.   

How you idealize your business endeavor is a good start— but successfully realizing that vision is quite another matter. And that brings us back to the issues of Murphy’s Law and its close relative, human error. Strategic planning done independently of these two notions is a formula for failure regardless of how much optimism and positive thinking may be involved. 

At some point, every business leader has to confront the fact that human beings will never be perfect and how that fact applies within his or her particular business. Ignoring this step is almost invariably a prelude to problems.

“S.W.O.T. analysis” and human error

Beyond the basic elements of strategic planning lies that component in which the realities confronting a business must be taken seriously. Often referred to as “S.WO.T. analysis,” it includes assessments of the “Strengths,” “ Weaknesses,” “Opportunities,” and “Threats” associated with a given business endeavor, and how these pertain to its likelihood of achieving its goals and fulfilling its mission.

Human error is most appropriately dealt with in the “Weaknesses” component of the S.W.O.T. analysis. Unfortunately, this is precisely the area in which people are least likely to have open and honest exchanges. And if discussion of weaknesses, problems, and errors is actively suppressed, as is so often the case in troubled workplaces, there is little hope of maximizing organizational potential.

Positive thinking or “groupthink?”

Decades ago, psychologist Irving Janis analyzed numerous business and military snafus, and found that the active suppression of criticism of errant plans or practices was almost invariably involved. Janis identified the above as a symptom of what we now all know as “groupthink,” which has been associated with disastrous outcomes in all sorts of enterprises.

Today such patterns are defended under the popular rubric “positive thinking.” It’s surprising and disappointing how little we learn from either experience or textbooks.

A question of balance

If we’re to build better businesses, we need to get away from the kind of “all or none” thinking that sells a lot of books and seminars and learn to focus our thinking a lot more on what makes real businesses successful. Purely positive thinking is like sex— it sells.  But it offers few viable options for dealing realistically with the pervasiveness of human error in organizations.

I’m a big fan of optimism, but it must be combined with a healthy measure of serious mindedness. It also needs to include a willingness to face facts, be they pleasant or unpleasant. We’re in an age in which many businesses are struggling, governments are failing, and high rates of human error are more costly to us than any time in recent history. 

Defensiveness and denial are all too frequently confused with positive thinking. Such confusion can only perpetuate the problems that we all agree we’d like to see solved. Facing and realistically dealing with the human proneness to error can help us to clear the air and get on to the kind of positive thinking that can help us to improve the rates of success in our businesses— and in our society at large.