What High Reliability Organizations Can Teach Entrepreneurs
I’ve got it all figured out. I’ve seen it all and done it all when it comes to launching and operating a successful Start-up (That was hard to write with a straight face!). In actuality, nothing could be further from the truth. However, while I may not know (yet) all the ins and outs of running a profitable business, I do know that there is much to be learned from top performers.
I have worked in the healthcare industry for the last 20+ years and, as I’m sure you can imagine, it is an extremely risky business. In this part of my life, I spend much of my time researching best practices and determining how they can effectively be implemented in my organization. I find at times it is useful to look outside healthcare at what others are doing in different sectors. Further to this concept, I suggest that there is value for entrepreneurs to study the practices of High Reliability Organizations (HRO’s).
What is a High Reliability Organization?
HRO’s are institutions, healthcare or otherwise, for whom failure is a pre-occupation. They are the ideal to which we in healthcare aspire. A high reliability organization accepts the omnipresent potential for catastrophe, yet maintains a virtually error-free rate of performance. Their day-to-day business is driven and directed by a systems thinking approach that anticipates potential problems and puts measures in place to mitigate those problems.
Other types of industries which use this model include: Wildland Firefighting, Air Traffic Control, and Nuclear Research Facilities. In addition to carrying out their day to day activities, their primary focus is risk management and avoiding negative outcomes at all costs. The reason for this uber focus on risk is obvious — to avoid the loss of life.
Although the stakes may not be as high, this risk-adverse approach is something aspiring entrepreneurs would be wise to consider. Embarking on a new venture, the uninitiated entrepreneur is often filled with wide-eyed optimism. While that enthusiasm may be a necessary and endearing characteristic, it is not sufficient to ensure success. Adopting the methods and mindset employed by HRO’s can reduce the potential for undesired consequences, and may drastically improve our likelihood for success.
Characteristics of HRO’s
- Preoccupation with Failure: HRO’s do everything in their power to mitigate risk before it happens. And if something negative does occur, they analyse the how’s and why’s of the event to ensure a comprehensive understanding of the factors at play.
Similarly, start-ups can use this perspective to help them grow from set backs and gain valuable insight. For example, before you launch your website, it is probably wise to take steps to ensure: appropriate SEO is in place, the website functions properly, it is protected from viruses, and so on. If your site does happen to go down, or fails to attract traffic, you can do like the HRO and engage in a root-cause analysis to uncover potential causes.
(See https://www.process.st/checklist/website-launch-checklist/ for a great website checklist).
One could argue that this preoccupation with failure will result in a stressed out entrepreneur, lying awake in bed every night with visions of ruin running through their head. On the contrary, I believe that proactively flushing out potential problems before they occur will result in a more confident, prepared individual.
2. Reluctance to Simplify: If something doesn’t go as planned, take a good look at the conditions surrounding the event and examine all the contributing factors which may have influenced the outcome. HRO’s don’t assume they know the answer — they thoroughly analyze the processes in place and potential reasons for the failure. The system as a whole failed on some level; the most obvious reason for the failure is not necessarily the only reason or even the real reason.
3. Sensitivity to Operations: This requires Big Picture thinking and an understanding of how all the pieces fit together. The operation of your business, no matter how simple the model may be, is still complex and influenced by many factors. HRO’s understand the context in which events (good or bad) occur and how one part of the organization may inadvertently affect another.
4. Deference to Expertise: This is something I am realizing the importance of more and more. I don’t know how to do all of the things it takes to run a business, and frankly it would be a waste of my time and considerable talent (jokes!) to try and learn all of those things. Enter the experts. HRO’s know that it’s the people in the trenches and on the front line who do this stuff every day who can best advise on: a) where the land mines exist, and b) where opportunities lie. (Incidentally, I’m looking for an inexpensive yet reliable website developer…)
5. Resilience: The unpredictable nature of “systems” requires planning. HRO’s assume that the system is always at risk; they continually monitor and assess. Similarly, start-ups (and established businesses for that matter) would be wise to accept the inherent unpredictability of system in which they’re operating, and have contingencies in place for the inevitable variances to the anticipated outcome. It’s not “if” but “when” something is going to happen.
The caveat here is to keep things in perspective. The HRO model is a business tool, not a life tool. I think we all have enough anxiety in our life and need not assume an HRO mindset to structure our world view. As we go about our daily life, we can’t always be waiting for the other shoe to drop. If we do that, we might end up wearing bubble wrap and living in fall-out shelters.
A High Reliability Start-up is not an actual state of being, but something towards which you continually strive. Every business is different and there is no one recipe for success that will suit everyone. However, we can make use of these HRO principles to help lay the groundwork for success. It’s good to anticipate problems so we can plan for them; but we can’t plan for everything. If shit happens, and it will, that’s ok. We will rise to the occasion and be that much stronger and wiser for the experience.
References
Weick, K. E., & Sutcliffe, K. M. (2007). Managing the unexpected: Resilient performance in an age of uncertainty (2nd ed.). San Francisco, CA: Jossey-Bass.
Rochlin, G.I. (1999). Safe operation as a social construct. ERGONOMICS, 1999, Vol. №11
https://www.jointcommission.org/high-reliability_health_care_getting_there_from_here/
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