Thursday, October 04, 2007

Management by Disaster

October 4, 2007, 10:30 a.m.

Management by Disaster

Yesterday and the day before I was handing out awards for creative innovations in management. Nicholas Johnson, "Rational Economic Thought," October 2, 2007, 6:30, 10:00 a.m.; October 3, 2007, 7:15 a.m. (addition of Fire Chief Rocca's proposal).

Today's Gazette happens to contain four stories that illustrate the opposite. All share a common failing among administrators. It's what I call "management by disaster":

Cindy Hadish, "UI: Hospital Deficiencies Corrected," The Gazette, October 4, 2007, p. A1 (the original source was Clark Kauffman, "Violations found at U of I Hospitals; Inspectors: Errors imperiled patients; 9 deaths were not reported," Des Moines Register, October 3, 2007)

Erica Binegar, "Joensy's Owner Says Inspection Exaggerated; Solon Restaurant Ordered Closed by Health Department," The Gazette, October 4, 2007, p. B1

Rick Smith, "C.R. Police Morale 'Extremely Low,'" The Gazette, October 4, 2007, p. B1

"Airlines Mishandling Most Baggage in 20 Years," The Gazette, October 4, 2007, p. B9 (reprinted from the Washington Post; see Jonathan Mummolo and Del Quentin Wilber, "Now Arriving At Carousel 1, Far Fewer Of Your Bags," Washington Post, October 1, 2007, p. A1)
Now it is not my purpose to target any given individual for judgment with words or phrases such as incompetent, should be fired, ignorant, nobody cares, lazy, etc. To the extent possible I won't even mention anyone by name. Not only is it not very effective to engage in such criticism, but to draw such judgmental conclusions from the scattered information that can fit in a newspaper story is not likely to be well informed, fair or accurate.

Besides, it would run directly counter to the larger point I'm trying to make. I don't think the subjects dealt with in these stories are insignificant. But my focus is on the lessons they teach for everyone with administrative and managerial responsibilities, not the details of these four stories.

And those lessons are that "management by disaster" is (a) all too common, and (b) guaranteed to produce a continuing stream of disasters.

Management by disaster is waiting for 9/11 to occur before taking Ralph Nader's advice from decades earlier that airline cockpit doors should be strengthened.

Management by disaster is waiting to be overwhelmed with calls from angry parents about kids not being picked up by the school bus before putting procedures in place that require bus companies to demonstrate, before school opens, that they can run the routes in an accurate and timely fashion.

Management by disaster is responding -- after a Virginia Tech slaughter -- with improved communication on the nation's campuses. (And, at Iowa's universities, with the emotional enthusiasm for bringing more weapons onto campuses -- a "solution" at best totally irrelevant and at worst counter productive.)
Management by disaster is being more concerned about adverse public relations than what it is you're getting the adverse public relations about.

Do you remember the shocking revelations -- including pictures -- from the Abu Ghraib prison in Iraq? Here's what I wrote about it at the time:

Given that Red Cross spokesperson Antonella Notari has said, "The photos are certainly shocking, but our reports are worse," how can one account for the administration's failure to respond to those reports?

As Secretary Rumsfeld testified before the Senate, "It is the photographs, the people running around with digital cameras."

The problem, in short, was the public relations impact on American citizens (and possibly the president's re-election), and on Iraqis' "hearts and minds." The problem was not our pre-interrogation techniques, the problem was the pictures of those techniques. No cameras, no problem.

Before we get too shocked about this administrative response we need to reflect. Just how unusual is it?

Think back over publicized scandals involving deaths in hospitals, unsafe products, journalists' fraudulent stories, tobacco companies' lies, sexual abuse in the church, manufacturers' toxic dumps, or universities' athletic programs. How often have they involved facts well known to top administrators for some time? Or, if not known, facts that would have been known with even rudimentary monitoring and management information systems?
Nicholas Johnson, "Lessons from Abu Ghraib," The Daily Iowan, May 11, 2004.

One of this morning's stories, as it happens, does involve "deaths in hospitals."

Bear in mind, I'm not talking about disasters that would have taken the best-trained MBA by surprise. That can happen to anyone. I'm talking about pretty basic stuff that could have been, and should have been, anticipated.

Apparently the regulations involving the reporting of deaths of patients in restraints or in seclusion have been in place since January of 2007. (Does one really need a "regulation" before feeling a responsibility to report such a death?) Nine patients covered by this regulation have died; apparently none of the deaths were reported.

Somewhere between 25% and 40% of the patients in hospitals are suffering from what is called "iatrogenic" disease. And what is that? My dictionary says an iatrogenic disease is a disease "induced in a patient by a physician's activity, manner, or therapy. Used especially of an infection or other complication of treatment." In other words it's a condition caused by doctors and hospitals -- the roughly one-third of medical professionals who don't wash their hands thoroughly after using the restroom; prescribing or dispensing the wrong medicine, or quantity; rooms that haven't been adequately cleaned; amputating the wrong limb, or from the wrong patient. These causes are well known and have been for years. But so are the cures. This is not rocket science -- though it is medical science -- and dramatic improvements have been reported in hospitals that have taken the matter seriously -- before their negligence made the front pages of local papers.

Keeping track of everything going on in one of the nation's largest hospital complexes is one thing. (The UIHC represents a major share of the UI's 16.4 million square feet of building space.)

Keeping track of the sanitary conditions in one's modest-sized restaurant is another. Once again, the motivation ought not be concern about the adverse public relations -- not to mention loss of business as a result of being closed down by the Department of Public Health. A restaurant owner should want to maintain healthy conditions when handling and preparing food as a matter of quality control and avoidance of harm to customers -- as well as just having a more pleasant environment for owners and employees in which to work.

I don't have time, space or inclination to report everything a consultant uncovered and reported about the Cedar Rapids Police Department. Read the story. Once again, the point is that most of the problems that were uncovered could have been dealt with long before they were spread across the pages of the local paper.

And, not incidentally, the Iowa City City Council ought to want to review very carefully this experience and report from Cedar Rapids -- as well as the information about cities elsewhere that's available on the Internet -- before willy-nilly just increasing the number of Iowa City's police officers. There are loads of things that can and should be done first -- whether we add additional officers or not.

The airline baggage story is similar. In 2002 there were 3.84 reports of mishandled bags for every 1000 passengers. In July of 2007 there were twice that: 7.93 per 1000 passengers. This is another case in which management can't claim to be surprised. Lost luggage has been the subject of both furor and humor for years. And as the statistics indicate, things are apparently not getting better. Why would management want to wait for the embarrassment of the publicity surrounding this report from the Bureau of Transportation Statistics before taking action?

A CEO's participation in conferences, dinners, travel, speeches, and golf matches may or may not make a contribution to an institution's success. But they are not the CEO's primary responsibility.

There's a reason why CEOs are paid the big bucks -- some 450 times what they agree to pay their employees. They may believe in MBWA (management by walking around) or they may have MIS (management information reporting systems) in place -- or both. But whatever systems they employ they are responsible for being proactive, for anticipating problems (and opportunities), for putting procedures in place and then monitoring to make sure they're being followed.

You don't need an MBA and a multi-million-dollar salary to react to disasters on the fly, trying to make the best of a public relations black eye, and then locking all the doors on the barns that used to hold the horses.

Management by disaster may be widely practiced, but it's still "one hell of a way to run a railroad" -- a hospital, restaurant, police department, or airline.

# # #


Anonymous said...

CEO's don't pay themselves...their salaries are approved by their boards...generally made up of large shareholders. In this day and age this often includes pension fund managers for state employee pension funds like IPERS or CALPERS. Or, TIAA-CREF.

Anonymous said...

Important thoughts about a wide-spread problems.

Regretfully, too many people are promoted to management roles because they are skilled at fixing problems, not because they are adept at preventing them. If you're interested, I wrote along similar themes earlier this week at