When the Push for Big, New Ideas Can Put Your Company in Danger

If you're getting ready to launch a disruptive new product, game-changing new feature or even a rocket ship to space, take note. The battle cry for innovation could put your team in danger of repeating a disastrous mistake from your past. And it's likely that mistake could have been avoided.

Researchers from the McCombs School of Business and University of Colorado Denver Business School examined a theory of organizational forgetfulness. Even the world's top scientists can forget to apply important lessons learned from past failures.In the Harvard Business Review, one of the researchers wrote about their findings. 

Organizations tend to repeat the same mistakes

Francisco Polidoro Jr. and his colleagues Pamela R. Haunschild and David Chandler put forth a theory to examine why even the brightest minds cycle through periods of learning and periods of forgetting. They call it organizational oscillation.

They examined catastrophic failures including NASA's 1986 Challenger explosion and BP's 2010 Deepwater Horizon explosion. In retrospect, both tragedies could have been prevented. Some NASA employees raised concerns before the launch, and BP had a similar accident just a few years earlier.

"Why do organizations forget what they learn, even when stakes are so high?" the researchers wondered.

Lessons learned don't stick

Naturally, a large-scale failure -- such as a space shuttle explosion or oil spill -- is a serious wake-up call for the organization.

"It stimulates an organization to emphasize safety as a primary concern, as it seeks to identify the root causes and to make the corresponding corrections in its processes, structure and culture," Polidoro explains. The organization corrects their course to eliminate the possibility of this happening again. Not long after the catastrophe, the organization is stronger, safer, and more conscientious than ever before.

But then time passes. The memory of the disaster begins to fade. Other priorities creep in. The organization slips back into its old way of doing things. The lessons learned from the grandiose failure don't seem as important.

How innovation pushes out other priorities

The researchers found several reasons behind why organizations are so forgetful. Over time, public attention on the disaster wanes, removing external pressures. Employee turnover and the appointment of new executives also contribute to the entire organization's forgetfulness. The organization become less vigilant about avoiding the same mistake.

Above all, the researchers found that as the push for innovation bubbles to the top of the priority list, the focus on other crucial priorities are reduced. Innovation and safety come into conflict.

Take pharmaceutical firms, for example. The researchers evaluated 146 pharmaceutical firms to test their theory of organizational oscillation. They found a serious drug error will realign the firm's focus on safety. But as the pace of innovation slows, a drug company is likely to swing the opposite way -- revving back up the push for innovation to launch drugs that may be defective or unsafe.

When leadership pushes through a no-ifs-and-or-buts urgent priority such as a new product launch, employees who observe red flags may be afraid to speak up. No one wants to be labeled as a naysayer. Even those who raise concerns may not be heard because their voices are not deemed important.

"We hope that with these insights about why organizations eventually forget what they learn from big mistakes, leaders can better learn to manage the tension between innovation and safety, and counter their organization's natural tendency to forget," Polidoro says.