COMPLEX PROBLEMS CLASS 6

1. COMPLEX PROBLEMSCLASS 6 Can We Really Learn From Failure? Failure Analysis as a Problem Solving Tool

2. Background on Failure Analysis • Engineering Roots (hyperlink to learning from engineering disasters) • NTSB as Example • Sports Example -- “Truth in Video” • Expanding into Organizational Influences • PTD or PED -- Primary Technical (usually Engineering) Decisions • PMD -- Primary Management Decisions • See Failure Analysis Resource Library

3. Failure Analysis as Problem Solving • Works back and forth between analytical and heuristic problem solving techniques • Modeling components: simplifying, organizing … • Heuristics: backward-forward; experiments; careful observation ... • Process-Specific Lessons • Solving problems that have occurred: remedies-improvements indicated that are limited to the particular case at hand and the process, company, or people involved -- often technical in nature • General Lessons • Avoiding problems before they happen: remedies-improvements suggested for application to other processes, companies, and people • This is the reason for studying failures of non-related companies and industries

4. Levels of Failure Analysis • Physical Causes • Tangible causes at the point of failure that explain how something happened, e.g. machine part that fails • Responses: redesign; sanction, training ..of engineer • Human Causes • Point of Failure: Improper intervention by person directly linked to the problem (operator, pilot, …); focus on how failure occurred • Responses: sanction of decision maker closest to problem • Organizational/Management Influences: Considering the factors (systems, incentives, policies) behind the point of failure that may have contributed or almost determined the point of failure causes; focusing on “why” the failure occurred • This opens the widest possibility for generalizing beyond the specific failure to help avoid other failures

5. 1986 Challenger Disaster • Basic Facts -- see Case Western Website • Past flights -- known O-Ring Problems, scorching, erosion, partial burn-through • Contractor written recommendation of no launch below 53 degrees because of loss of O-ring elasticity -- sealing capacity • July 1985, Thiokol engineer memo warning Flawed design of pressure seal (O-Ring) • Jan 27-28: Cold temperatures; Thiokol engineers advise against launch; management backs the decision • Thiokol management reverses -- they & NASA decide to launch • Jan 28, 1986, NASA Shuttle Challenger Explodes about 150,000 ft. above Earth

6. 1986 Challenger Disaster • Physical Causes: • Failure of the pressure seal (O-Ring)on right solid rocket booster O-Ring Blow-out; • Booster-Strut Burn-out; • Booster Impacts Hydrogen Tank … • Flawed design of pressure seal (O-Ring) • Solution: Redesign O-rings + reconsider design of Shuttle in general

7. Challenger Con’t • Human Causes • Point of Failure: Launch decision over objections in view of low temperatures • Solution: Sanction Thiokol & NASA decision makers …

8. Challenger Con’t • Org Policies-Systems-Incentives: why would a manager & NASA make such a decision? • At least 2 answers given: • Incentives to launch • NASA key customer; NASA pressure to launch because of slow pace of shuttle missions • “Normalization of deviance”

9. NASA -- Back to the Future • 1967 Fire on Apollo 1 • Pure oxygen system; North American Warnings; Deaths; Tangible cause focus; NASA & NA point managers lose jobs; no focus on why or changes based it • 2003 Columbia Shuttle Disaster (in progress) • Foam debris; Loss of tiles; Decisions not to investigate further at time; More discussion as to why. Results…?

10. Other Failures with Interesting Org Components • Structural Failures • Kansas City Hyatt Regency ... • Detroit Northwest Airlines Debacle • Planes on Tarmac for 8+ hours out of food, water, toilet capacity, ... • Groopman (Harvard M.D.) Second Opinions

11. Organizational/Managerial Causes • Going beyond superficial (Harvard B-school Max Bazerman) • Organizational Incentives • Org goals • Customer pressures • Cost pressures • Flawed links incentives-behavior • NOTE: Although sometimes portrayed in the media as improper, these kinds of concerns are legitimate and enter into business as well as personal decisions (even for reporters) • Flawed Decision Processes • Lack of Information Sharing -- lack of “informativeness” principle • Org Politics: Conflicts, Rivalries, Poor Leadership Direction; • Compartmentalized Decisions (breaking problem into parts), but Tightly Coupled Systems -- Highly Complex Interactive Systems not fully recognized • Normalization of Deviance

12. FAILURE ANALYSIS & BUSINESS • Why is failure analysis not more common in business? • Threat to leaders, employees, ... • Ignorance of role-benefits • Organizational Culture

13. Organizational Architecture for Meaningful Failure Analysis • Buy-in from top leaders • Analysis team with technical expertise but not necessarily led by expert from field • Boiler problem & chemist example • Tradeoff: Punishing failure -- promoting truth • Obviously, price to pay for bad decisions • People looking over shoulder perform poorly • Recognize that some factor(s) beyond reasonable foresight -- cannot become witch hunt • WTC Collapse; OK City Bombing Collapse;

14. Critical Lessons • Failure analysis is not just an engineering matter • Technical, Decision, Managerial Issues • Failures frequently surface from organizational flaws • Incentives out of balance • goals; consumers; costs; incentives-behavior linkages • Decision Processes • lack of information sharing-transparancy • decisions compartmentalized-systems highly integrated • normalization of deviance

15. Mini-Assignment • Find an example of a workplace failure • Try to identify the point of failures (physical; decisons) • Consider whether the failure is linked to organizational incentive or decision process problems