The Business of Catastrophe

Uncovering the organizational causes of disaster and the best practices of “highly reliable organizations”

The Business of Catastrophe

When a high-profile disaster occurs—from the BP Deepwater Horizon spill to Pacific Gas & Electric’s San Bruno pipeline explosion—the public scrambles for answers and accountability. Often, among the teams of law enforcement and government investigators, you’ll find organizational behavior expert Karlene Roberts, Berkeley Haas professor emeritus.

That’s because about three decades ago, researchers at Berkeley pioneered a new way to understand human-made disasters, looking beyond human error and technical glitches to the organizational causes of catastrophes. Roberts was one of these trailblazers, helping to launch the new field by studying the practices that “highly reliable organizations” (HRO) use to avoid disasters. Roberts and others applied this lens to nuclear power plants, commercial aviation, utilities, the health care system, and other industries.

“If you see a really good thing in an organization going on consistently, then you have to look deep below the surface to see how that happens. You need to look at the individual embedded in the organization,” Roberts says. “You have to look into the culture, the decision-making, the communication, the training.”

Roberts, chair of UC Berkeley’s Center for Catastrophic Risk Management, and Vanderbilt’s Rangaraj Ramanujam, a leading scholar in the field who specializes in health care systems, take stock of the past 30 years of research in their new co-edited book, Organizing for Reliability—A Guide for Research and Practice (Stanford Business Books).

“Deference to expertise over authority–paying attention to the person who knows what is going on– is one of the fundamentals of mindful organizing.”

Roberts recalls one of the incidents she witnessed early in her career, aboard a Navy nuclear aircraft carrier, that piqued her interest in cultures of high reliability. She watched as the lowest-ranked sailor on deck waved off a jet landing with seconds to spare because he noticed a tool in the way. Rather than reprimand the 18-year-old, the boss controlling the aviation tower lauded his quick action.

“Deference to expertise over authority—paying attention to the person who knows what is going on—is one of the fundamentals of mindful organizing,” Roberts says.

Other features of “mindful organizing,” a framework further developed by Karl Weick and Kathy Sutcliffe and highlighted in the book, include a preoccupation with failure, a reluctance to simplify interpretations, sensitivity to operations, and a commitment to resilience.

Top predictors of reliability include open communication and respectful interactions as well as a dedication to reliability at all levels—something easier said than done in corporate America, where efforts toward reliability happen in the context of escalating pressures for profits and speed, Ramanujam says. Citizenship behaviors, or the willingness of people to go beyond the call of duty when the unexpected happens, are also critical.

While Roberts and Ramanujam focus on complex organizations susceptible to potentially catastrophic situations, other companies can benefit from becoming more reliable. “Some of the practices that HRO researchers brought to the surface are…good communication, good coordination, situational awareness, and responding to surprises,” Ramanujam says. “You can see how those practices could enhance not just outcomes like reliability but also outcomes such as innovation, speed, [and] flexibility.”

This article was published jointly with Vanderbilt University’s Owen Graduate School of Management. Read the full Q&A.