A report on 'error management' from professor Michael Frese from the University of Giessen, Germany, finds that many companies have developed a 'no errors here' culture that frequently leads to workers being punished when they make a mistake. But this may not be the most sensible or practical way to run a business.
The study of error management focuses on the ways in which organisations deal with errors once they are made. According to Frese, all too often pointing the finger at the responsible party or sweeping a mistake under the carpet, can mean that nobody knows about the error or learns from it.
Frese claims that learning from errors and fostering a culture of communication about mistakes are alien concepts to many companies. But he says that the rewards for doing so could be big. Frese's own research suggests that a positive error management culture can increase profitability by 20%, while conversely a negative error management culture can decrease profitability by the same amount.
Source: Michael Frese
London Business School
Review by: Nick Loney