Good managers have always understood that a company’s success is hugely dependent on its error culture. In a good one, mistakes are managed proactively and constructively. Scientific studies have convincingly shown that a company with a good error culture enables faster learning, the creation of innovative ideas, and higher quality levels.
However (as we all know), handling errors well is easier said than done – because mistakes still have negative connotations in our society, and no one wants to be viewed as ignorant, incompetent or stupid. This means that errors at work are not discussed, or may even be covered up. The Error Culture Report 2023 – a study (in German) in conjunction with EY and Hamm-Lippstadt University– also shows that 64% of German managers never or rarely address errors that have been made, a figure that rises to 82% for managers in the financial industry.
This raises the following question: How do you establish a good error culture within your company in a targeted, sustainable way? Building on work by Harvard professor Amy Edmondson, I propose an error-culture framework (see Figure 1). The framework helps you identify the current error culture in your team or company and use this to identify targeted measures for improving it. The framework distinguishes between four types of error culture using two key influencing factors. The good news: once you know the key levers, you will be able to have a major impact just by making small changes.
Error-management culture
A good error culture is what we describe as an ‘error-management culture’. This sees errors being tackled proactively and constructively. An error-management culture can be identified from five specific behaviour patterns: errors are anticipated, errors are corrected directly, errors are communicated quickly, people learn from errors, and people also run the risk of making errors (e.g. when experimenting with new things). Research shows that an error-management culture positively impacts companies’ profitability, target achievement, probability of survival, and return on investment.
An error-management culture can exist if a company has high performance standards and also offers high levels of psychological safety. Performance standards are expectations regarding the goals set and the willingness to take responsibility for achieving them. High, clear performance standards help to analyse mistakes. They encourage us to establish new behaviour and also to experiment with new things. If there are high levels of psychological safety, employees do not believe that they will be punished or humiliated if they ask supposedly ‘stupid’ questions, express concerns or address errors. This is therefore vital to enable mistakes to be discussed, which forms the basis for everyone to learn from errors that have been made.
Error-fear culture
If low psychological safety is paired with high performance standards, an error fear culture will often develop. In an error-fear culture, people feel frightened to talk about their own mistakes. They fear negative consequences if they fail to achieve their objectives (e.g. career setbacks, losing their job). Errors are exploited for political purposes. This fear causes a greater stress level if an error occurs, potentially resulting in dysfunctional coping strategies. For example, errors may be covered up or in some cases, the blame may be shifted to other people. An error-fear culture leads to a chain of (covered-up) errors, resulting in major scandals. Rings a bell?
The key to successfully moving from an error-fear culture to an error-management culture lies in improving psychological safety. Fortunately, leaders’ behaviour can have a major impact on this. One of the key findings of leadership researcher Amy Edmondson is that psychological safety can be significantly improved by seemingly trivial actions. Studies have shown that statements from managers such as ‘I don’t know’ or ‘I need help’ have a significant effect on whether employees believe that they can openly discuss their own errors. The tone is set from the top here.
An error-management culture can be identified from five specific behaviour patterns: errors are anticipated, errors are corrected directly, errors are communicated quickly, people learn from errors, and people also run the risk of making errors (e.g. when experimenting with new things).
Error-tolerance culture
The opposite of an error-fear culture is a so-called error-tolerance culture. In an error-tolerance culture, mistakes are accepted. A culture of error acceptance often creeps in over time. Time and effort are not invested in developing and reviewing clear, high objectives, and responsibilities are not clearly distributed. However, if psychological safety levels are high, this means that in principle anything can be discussed (which is well understood), but the goals and responsibilities are so vague that it is impossible to really identify any deviations. This prevents employees from remedying errors, learning from mistakes and experimenting with new things. People simply do what they have always done and see what happens.
The path from an error-tolerance culture to an error-management culture involves clearer, higher performance standards. High performance standards motivate people to proactively anticipate errors, learn from them, and run the risk of making them. This can for example be implemented via objectives and key results (OKRs). OKRs are an approach to setting targets (objectives) and measurable indicators for target achievement (key results). This is not a rigid waterfall planning process, but rather an agile, iterative one. Continually comparing the objectives set against the current situation means that the process of learning from errors, discussing errors and experimenting with new things becomes institutionalised.
Error-resignation culture
If performance standards and psychological safety are both low, an error-resignation culture will often develop. In an error-resignation culture, people are afraid to address things openly. There are numerous accusations, cynicism, often contempt for managers, and no shortage of gossip. In a culture like this, people have given up on changing anything – either because they are afraid of doing something wrong, or because they are exhausted and burnt out. Silent quitting is one of the consequences of this. A good error culture looks somewhat different.
You already know the way out of an error resignation culture: it requires increasing both performance standards and psychological safety. The question is, where should you begin? There is a strong argument for starting with performance standards. Common goals and responsibilities form the basis for cohesion, fairness and trust. Building on this, psychological safety can be tackled and improved within teams.
In summary, it can be seen that the error-culture framework helps with identifying and describing the four key error cultures and introducing potential courses of action. And now that you can do that, let’s work together to establish an error-management culture in companies. Because without an error-management culture, agility, innovation and intrapreneurship will be non-existent. And these are more than just buzzwords! To paraphrase Charles Darwin: ‘It is not the strongest of the companies that survives, nor the most intelligent; it is the one most adaptable to change.’
This article was originally published in German magazine IDW Life.
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