As part of our series of Friday night articles on Before and after thinking, I thought I would adapt some ideas from one of A4G’s favourite books Black Box Thinking by Matthew Syed.

For those of you who don’t know who Mathew Syed is, he is a features writer for the Guardian, ex-British and Commonwealth table tennis champion and known as “the ping-pong guy” on a radio show with Freddie Flintoff and Robbie Savage.

More significantly, he has written a number of books which are inspiring simply because of how logical they are about everyday life and events. One of our clients told me that his first book “Bounce – why talent is made and not born” inspired him to start his business.

“Black Box thinking – the surprising truth about success”, compares the airline industry’s approach to failure with that of our own NHS.

Syed’s book came to mind in early February when the news reported that the NHS has paid out £4.3billion in legal fees in 2019. It also has outstanding compensation claims of £83billion (some of these rumble on for years) which is the same as the amount it costs to run the entire NHS for 8 months! Those are terrifying numbers and even more so now that we face the biggest economic downturn of our lifetimes.

If only they could avoid these things going wrong.

Part of the NHS’s problem lies in what we might call “blame culture”. And although it might be rampant in our health service, we see it in every aspect of our lives and dare I say it in your own business as well. We are so surrounded by the finger-pointing search for someone to blame that rational analysis can go out of the window.

And it’s always someONE, which is usually a mistake in itself because most things that go wrong are down to a series of mistakes by a number of people.

Think about something that went wrong in your workplace. This is how some of your team might have thought and the order of priority that they will go through when trying to apportion the blame:

  1. Can I blame someone who no longer works here?If one of your team employs this tactic then they are in notorious company as it was regularly used by Stalin! Poor old Trotsky got the blame for everything.
  2. If not, then I’ll try and pin it on someone who works for the company but in a different location. It’s bit awkward otherwise if I throw someone under the bus then have to bump into them in the kitchen.
  3. Ok, the kitchen might be a problem but maybe I’ll go for someone who works here that I don’t like. This could be an opportunity to see if we can rid of that annoying so and so.
  4. Someone who works here that I do like but who’s expendable. Jamie, you’re a nice lad and your apprenticeship was progressing well but it’s you or me.
  5. Anyone else here apart from me.
  6. The government, the system, the liberal elite, China.
  7. Unforeseeable events. “It’s just one of those things”. It was caused by forces outside of our control.
  8. Me.

Most people never make it to 8.

That’s because most people will attribute success to themselves and failure to others.

As they say “Success has many parents and failure is an orphan” or maybe failure’s parents just happened to go and work somewhere else!

This is all part of what we would call Whitewash thinking. Finding reasons to explain away failure rather than identifying the true causes (note the plural in there) wastes huge amounts of energy but more significantly can lock in poor practice.

And it’s easy as business owners to get drawn into that kind of thinking as well. Even perhaps just to protect our own ego from admitting that we were part of the cause. Or maybe to avoid confrontation.

But with the right mindset, it is possible to reduce errors, catastrophes, losses or basically anything that takes you further away from, rather than towards, your chosen goal.

Here are a few techniques you can use to avoid these things before they happen:

  • Strategic planning. I’ve covered the strategic planning process in a few previous articles so I won’t repeat myself other than to say that stepping away from the coalface gives you a chance to anticipate all the things that may go wrong with your business
  • Use systems as a plan. If you were going on a complicated trip, you would probably do a list of all the things you would need, the times and dates that you needed to work to. You wouldn’t dream of writing the plan after you got home. But that’s what often happens in business. People just try something without ever thinking about it. Sometimes its something really big. And then they wonder why it went wrong.Write the system first. Think it through. It will be more likely to go well if you do. And then you also have something to adapt to create an even better system for the second, third, fourth time you do it
  • Pre-mortems. This is great exercise that really gets everyone thinking. Before something big, get everyone involved to sit round a table and come up with ideas about what can go wrong. And then think about what you need to do to avoid those things going wrong.
  • Even if you’re only picking up litter, if you work at Disney you have a four-day induction. McDonalds staff go to Hamburger University. How long do you spend on an induction for new staff at your company?But yet new staff not familiar with your processes are a major cause of things going wrong.

The challenge with “before the event” techniques is getting people to take things seriously. They have no evidence of what can go wrong so don’t think about the consequences. Your job as leader is to create a sense of potential catastrophe to get everyone focussed on what they need to do so that catastrophe never happens.

Perhaps if there had more of a sense of potential catastrophe in February, as there was in places like South Korea and Vietnam, we would all have acted a little differently.

This might make your team uncomfortable but it’s crucial.

But sometimes things do go wrong. And here’s a few techniques that you can utilise after the event in order that everyone learns from it:

  • Management accounts. Trust me on the management accounts. You don’t need to spend hours on them. And they don’t have to massively complicated. If your bookkeeping is up to date and basic controls have been done, then the management accounts are 90% complete.The key activity is to spend a couple of hours per month, looking at the numbers, digging into the detail, discussing them, arguing about them but most importantly making all those little 1% changes to your business that over time add up to a completely different end result.
  • Post-mortems. As you might expect, these can be a little gruesome. Investigating one small problem can send you off on a journey that identifies all sorts of things that are happening (or not happening) in your business.For an owner-manager, this sort of exercise can be quite demoralising as you realise you have far more problems than you ever thought. But its necessary if you are to avoid the slow decline associated with blissful ignorance
  • Systems! I know, I’m always banging on about systems and the impact on A4G of The E-Myth Revisited.But the first version of the system is unlikely to be the best one. As you investigate things that have gone wrong, you can create a culture of continuous improvement by tweaking the systems, checklists and standard documents that are the basis of the daily activity of your team
  • Black box meetings. These can be quite fun once everyone involved accepts that one of the key elements is to discuss mistakes even if they made them. But we all make mistakes. If one person’s mistake is an opportunity for 10 colleagues to learn and avoid that mistake themselves or simply to build their knowledge, then the business will grow far quicker than it would otherwise.

Of course, your role in all this is to chair these discussions, reassure everyone that this is about learning lessons and making progress not apportioning blame. And then, you need to create clear action points and ensure that everyone does what they have agreed to do.

It’s hard work but it will pay off.

Perhaps the biggest problem is that some of your team with a strong sense of external attribution of failure may simply refuse to accept the evidence before their eyes.

And what if you are part of the problem? If the problem is big, you may need to bring in an outside adviser.

This is a favourite trick of a certain type of TV programmes (think Gordon Ramsey’s kitchen nightmares). Get an outsider who can see the problems without any of the baggage of an insider and who won’t try and come up with answers designed simply to excuse themselves. The subject of a one such series was “Can Gerry Robinson fix the NHS?”

Gerry is a bit of a business guru who started life as a Chartered Accountant and ended up running some of the biggest companies in the country. For most of you who won’t have the time to watch that series on Youtube, I’ll cut to the conclusion that Gerry reached at the end of the series – No, I can’t fix the NHS, no-one can.

But whatever the problems in your business, unlike the NHS it’s small enough that it can be fixed.

Blackbox thinking is about understanding that there are often several reasons why something goes wrong. It’s about understanding that life is a game of percentages. That chance plays a part. Sometimes you can do all the right things and you still won’t get the right result and sometimes you can do all the wrong things and get the right result. It’s also about realising that sometimes the solution to the problem causes a bigger problem than you had in the first place.

Or you can whitewash over the problem and pretend it never happened.

Have a good weekend.

A4G have two free webinars in early November to help clients and friends of the practice cope with the business conditions associated with Pandemic Normal. To book your place head over to our events page and input your information to register your place.

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Malcolm Palmer


Managing Partner

01474 853856

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