This is one of several awesome studies from these researchers (Dillon, Tinsley et al.) looking at how near misses influence decision making.
It’s often stated that near miss reporting is an important facet of learning – but this body of research suggests that near misses can actually increase a company’s propensity for danger.
Authors differentiate between perceived (“felt”) risk from calculated statistical risk (based on provided probability data of failure).
I absolutely can’t do this study justice as I can’t summarise all of the specific experiments & findings.
Results:
Experiment 1 had three groups of participants (undergrad & MBA students & NASA managers) read 1 out of 3 randomly allocated descriptions of an unmanned spacecraft mission and then rate the project manager’s (PM) decision-making skills. Version 1 had a successful outcome, v2 was a failure (unsuccessful mission), v3 was a near miss event but still successful.
The PM’s prior decisions were identical in all 3 versions, except for chance determining the outcome between the scenarios.
Found was that the story which resulted in a near miss, similarly to managers whose decisions led to successful outcomes, are evaluated more favourably than decisions resulting in failure – despite chance being the only difference between the scenario versions (which was unknown to the participants). Authors note that this occurs because people “judge near-miss outcomes—as successes rather than failures” (p1430).
Three other experiments were conducted but I’ll just report on general findings across all four. First, although near-miss outcomes do invoke some surprise in participants they nevertheless “do not create a sense of urgency, but rather appear to create a sense of complacency around a previously calculated level of statistical risk” (p1436).
Across the 4 experiments repeated evidence was found that near miss information promotes riskier decisions, where no evidence was found of “Bayesian updating or recalculating of statistical risk”; that is, near misses didn’t increase people’s perceived risk but rather decreased it. Near misses were not seen as near failures but instead as near successes.
Further, people with near-miss information chose riskier situations compared to those without near-miss information because they felt more optimistic about succeeding.
Findings indicate that managers whose decisions resulted in success or a near miss was judged to be significantly more competent, skilled and deserving of a promotion than one whose decisions ended in failure, despite chance playing the key factor rather than the decisions taken by the PM.
Authors surmise that “managers whose decisions lead to near-misses are more likely to move up the corporate ladder than managers whose decisions end in unsuccessful outcomes” (p1437).
Coupled with other findings that people who experience near-misses choose significantly riskier alternatives than those who haven’t experienced a near miss, it’s speculated that those who are promoted may continue to take riskier decisions and near-miss events will bias organisations’ towards higher risk states over time.
It’s discussed that the outcome bias, like seen in these experiments, “dampens organizational learning because it causes evaluators to focus only on outcomes and to overweight the contribution of managers’ decisions to organizational outcomes” (p1427).
That is, people focus on the outcomes of decisions rather than the quality & content of the decisions themselves.
Resultingly, “organizational successes do not get the scrutiny they deserve, and failures may receive too much attention” (p1427). In my view, this study strongly supports the contention that we should focus on learning from normal, everyday work.
Authors: Robin L. Dillon, Catherine H. Tinsley, 2008, Management Science
Link to the study: https://pubsonline.informs.org/doi/10.1287/mnsc.1080.0869
Link to the LinkedIn review: https://www.linkedin.com/pulse/research-bite-how-near-misses-influence-decision-under-ben-hutchinson/
SafetyInsights.org 