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E-book Averting Disaster Before It Strikes : How to Make Sure Your Subordinates Warn You While There is Still Time to Act
Compelling evidence from industrial working practice demonstrates that in many critical infrastructure companies, decision-makers find it difficult to get objective information about safety and technological risks. Management theory postulates that executives manage their subordinates through information: they receive information from various sources, process it, take decisions and convey these to their subordinates. The quality of information received by exec-utives about the real situation inside and outside an organization affects the quality of their decisions, and ultimately the adequacy of an organization’s response to any changes in the internal and external environment. Getting feedback from subordinates about the real situation at the very bottom of the corporate hierarchy is crucial for the survival of an organization in the long-term, as it allows executives to detect risks in time and take measures to mitigate them. But in reality, for a number of reasons, feedback from subordinates to executives is often distorted. As a result, executives often receive unrealistically reassuring reports from subordinates—assurances that in general, everything at the bottom of the hierarchy is fine and all risks are under proper control. The seriousness of the problem of “embellished” feedback about technological risks first became clear to the first author of this handbook during a 2007 seminar for an industrial company, one of the three largest in the world in its field. The seminar was devoted to management decisions and communication in emergencies. More than 120 senior managers from headquarters and directors of the company’s production sites attended this seminar. Crisis response and communication solutions are a well-established theme in modern risk management: there are many prac-tical manuals on this topic, with numerous clear examples of positive and negative responses by companies during and after various incidents. One of the postulates on how to respond effectively to major accidents is that managers should make sure they have reliable information about the preliminary causes of an accident, the extent of possible damage and the resources available to them, in order to determine how to tackle emergencies. If this inside information is honestly and immediately brought to the attention of all interested parties—authorities, victims, employees, the general public, investors, etc.—then the social crisis caused by an accident can be quickly resolved. After the seminar, one of the top managers of this company told the seminar facili-tator (the first author of this handbook) about the unfortunate situation with reporting technological risks and incidents within the company. According to him, the direc-tors of production sites (middle management) did not generally disclose anything negative to senior management at headquarters about what was happening at their enterprises. They preferred to send reports reassuring headquarters that “everything is fine”, “everything is under control”. Unable to rely on the official channels for a true picture of what was happening at the company’s industrial sites, senior management were forced to establish parallel channels to gather alternative information about operations at the sites. They asked the company’s internal security department to be responsible for creating this alternative flow of risk information from the bottom up. With this in mind, the manager asked the seminar facilitator a very serious question: “What should managers do in the event of an emergency if they cannot get reliable information from their subordinates in the first hours or even days after the incident itself?”.
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