Catastrophic failures rarely happen instantly.
In my side hustle as a SCUBA instructor, I recently had to undergo some professional education in order to renew my insurance. The course was about liability, and why instructors get sued.
One thing that was brought up during the training was that fact that dive accidents don’t “just happen”; they evolve from a series of minor, often ignored contributing factors and events, that then compound into what is then considered a “catastrophic event”. These contributing factors typically arise several steps prior to the incident. Sometimes, days, months or even years ahead
In the wake of a catastrophic event, the leading question that always comes up, “why didn’t someone do something about it sooner?”
The simple answer is, because we are human. We have an innate bias to ignore signs that point to something that has never happened before. The normalcy bias is a form of cognitive dissonance, that results in the refusal to plan for, or react to, a disaster which has never happened before.
One way to overcome the normalcy bias, is to study data, so that you have the awareness to recognize patterns that lead to bigger problems, instead of ignoring them and looking at them as isolated, unconnected events.
As an SCUBA instructor I have access to a database of reported diving accidents, the resulting investigation, and resulting conclusions. I study these, so that hopefully I learn to recognize signs of smaller events that if ignored may lead to catastrophic failure.
As a business consultant I see the same thing in companies that fail. My company gets called in to help correct some catastrophic failure in the business. Loss of profitability, a toxic team, loss of productivity, amongst others.
The reality, is that when we start looking at the data and do our investigation, we see a trail of red flags that led to the event that resulted in us getting called in. It was just that people saw those flags as unrelated isolated events, if they saw them at all. No one recognized them for what they were, a path leading to disaster.
One simple tool you can use as a business owner is a budget. If you have a well developed budget and sales plan each month you can run the budget to actual report to see how things actually went. You can compare this to how you expected them to go. This report provides insights to seemingly insignificant events, that might go unnoticed but can lead to much bigger problems if ignored.
This is one tool that allows you the insights to make small corrections and keep your business on course. As I was once told, “it is better use a little rudder far from the rocks, then a lot of rudder close to the rocks”!
What tools and metrics do you use to give you early warning of approaching rocks?
If you need help establishing this early warning system, feel free to reach out to us at info@encorestrategic.io