Broadening Sight at the Board Level: Perspectives from Error Management Research

Abstract

A major insight of research into organizational error is that there is a critical period between “hoping for better” and “too little too late”. Engaging in the active management of unfolding organizational errors before they evolve into crises (Pearson & Mitroff, 1993) becomes a strategic concern in itself – one that challenges classic approaches (Edmondson & Verdin, 2018; Giolito & Verdin, 2018). Recent research suggests that the management of organizational errors (e.g. Frese & Keith, 2015; Goodman et al., 2011; Lei, Naveh, & Novikov, 2016) is increasingly a responsibility for top executives, particularly in turbulent contexts where organizations devote increasing time and resources to experimentation. In this session, we turn to the responsibility of corporate boards in strategic error management, defined as the actions taken by organizational actors and that aim to disconnect these errors from strategic failure (Goodman et al., 2011; Hofmann & Frese, 2011; Giolito & Verdin, 2018). Many aspects of strategic failure can only be addressed and corrected by engaging in actions to minimize negative and maximize positive outcomes of the errors as they occur (Frese & Keith, 2015; Hofmann & Frese, 2011a). We assert that it is a core function for organizational actors to engage in and oversee these corrective actions, and that aspects of leadership, governance, and culture play an integral role in the capacity of an organization to respond to errors and avoid crises. Revisiting some of the basic insights of error management, this panel will explore the explicit responsibilities of the board in detecting, recognizing, and dealing with errors in organizations, especially those that affect their long-term success and viability. We will focus on how and when error management takes place and should take place at board level, and what interactive role stakeholders and institutions play in attenuating or magnifying the effects of the board’s behaviors and actions. We look to explore two parallel obligations at board level, both 1) the board’s responsibility for oversight of the error management capability of the organization, and 2) the responsibility for error management of the board’s own activities and functioning. Key questions addressed in this panel will revolve around: What should be the board’s effective functioning related to error management, as distinct from ad hoc crisis management capabilities, risk and compliance, and other frameworks and practices? What role does strategic error management play at the board level with respect to enhancing sustainability, both of the firm itself and of its environment – or even with respect to “planetary boundaries” (Whiteman, Walker & Perego, 2013)? How can error management practice improve the board’s capabilities to offset an organization’s slow drift towards obsolescence or failure? How can we restructure board and governance systems to better “see” the bigger picture, both in terms of major failure and in terms of opportunities missed? How can error management – or a “strategy as learning” perspective (Edmondson & Verdin, 2017, 2018) – help boards catch and address unwanted deviations from strategic goals? Our panel of highly experienced scholars represents several major research streams, as well as organizational and governance practice, with the aim of fostering a rich trans-disciplinary discussion. We plan to reserve ample room for dialogue with the audience, of which practitioners and consultants will hopefully form a significant part.