Profitability & Growth
Most managements aim at doing all they can to understand what exactly went wrong, and what exactly should be done to prevent traumatic failures from repeating. They suffered enough financially and morally. They can do that by triggering a lessons-learned study – there is nothing new about it. But surprisingly, lessons-learned studies are not always carried out, and if they do, they are often led by parties who are not likely to produce objective and unbiased conclusions and are inherently prone to conclude that external parties should be held responsible. For example:
| What happened? | Who led the study? | What was concluded? |
| Major losses generated by a high-volume project | The Head of the business unit who sold and now delivers the project | The client failed to make third parties cooperate. |
| Material amounts of inventory turned out to be inflated in the financial statements | The CFO | The external accounting office was negligent in auditing company inventory. |
| A major information-security incident | The Chief Information-Security Officer (CISO) | Information-security resources are insufficient and should be increased. |
Would you feel comfortable with such conclusions, and embrace them without any doubt? Would you go ahead with rigor, high-profile corrective actions that derive from such conclusions? Would you now feel that you have taken the right actions to prevent such incidents from happening again? Probably not. And you only have this opportunity to go down to the bottom of organizational defects and fix them before history hits again.
The first message is clear: Make sure you hire an external, independent, unbiased, senior party to check what exactly went wrong and what exactly should be changed. Then make sure that the lessons-learned study is going meet the following guidelines:
- Root-reasons must be identified. Do not accept findings that leave you with the question: “But what caused that?”.
- Keep the process constructive: Address the processes and organizational units, rather than individuals.
- Conclusions must lead to a clear, corrective-action plan, including specific articulation: Who needs to do What and When.
- Corrective actions must, among other, relate to organizational policies and procedures and required changes enforcement.
- A company’s top-management or Board should approve Lessons-learned studies before finalized and win their support. Such support is the key to keeping the while process effective.
- Consider how that process can contribute to a deeper learning culture, enrich the organizational DNA, and strengthen its immune system.
The opinions expressed on this website are not suitable for all business circumstances.