In Matthew Syed’s 2015 bestseller ‘Black Box Thinking‘, he discusses how airlines widely share their mistakes and findings to prevent future disasters. The NHS, he says, does the opposite. They maintain a closed and defensive culture, due to a highly damaging culture of fear and punishment for mistakes.
Outside of these life and death industries, the theme of admittance/learning versus denial/ignorance can be found widely throughout business.
Huntsman Petrochemicals accidentally discharged waste into a local river, thanks to a mistake by one of their contractors. He was immediately sacked by his firm, but Huntsman insisted he be reinstated and sent back to work at their site. They also threw him a thank you ceremony, all because he admitted his mistake and took steps to reduce the environmental impact; when he could easily have escaped blame.
“The basic proposition is that we have an allergic attitude to failure.’ says Matthew Syed, ‘We try to avoid it, cover it up and airbrush it out of our lives. Instead we should embrace it and learn from it.”
At the start of 2017, I had my first real taste of corporate disaster. I attended the Bovis Homes Western Region Annual Dinner. 2016 had not been a good year for the PLC, comprising a profit warning to the city and subsequent allegations that the company had offered its customers ‘cash incentives’ to move into unfinished new homes.
2017 saw the resignation of CEO David Ritchie, amidst public outcry of the bribes that were reported to have reached £3,000 per customer. On the evening of the dinner, there was an air of tension as employees and their partners waited for the evening to begin. The Western Region’s MD opened the ceremony, closely followed by the COO. Both were clearly conflicted; on one hand trying to provide their employees with a much-needed release, on the other feeling the need to address the elephant in the room.
It was Keith Carnegie, COO, who tackled the issue head on. He spoke of their mistakes in ‘sacrificing their values’ and ‘not putting the customers first.’ He said that it ran divergent to everything the company stood for, he made apologies and offered no excuses. Tensions ran high throughout, and a few employees in the crowd abruptly delivered their opinions from across the room.
Ultimately Mr. Carnegie steered the conversation away from the mistakes of the leadership team, and toward the employees and the customers. To me it was clear that the mistakes and consequences would not become forbidden topics of conversation, they would be held aloft as an example of what happens when a company sacrifices its values in the pursuit of profit. Bovis Homes has suffered financially as a result of its actions, but more damaging may be the blow to its reputation.
As an outsider of the business, I came away from the event with mixed feelings.
I had seen some very difficult moments that evening, both during the speech and in the chatter either side, but the following morning I found that I had respect for Bovis Homes. It’s easy for me to say, having not been a pressured customer or a frustrated employee, but for me; what I witnessed was a brave approach to an impossible situation. There was no mention of the economy, no word of pressure from shareholders. There was no sending in of HR to deliver the difficult message. It was clearly a group of ashamed, disappointed and repentant leaders taking ownership of their mistakes and the abuse that it would bring.
In that moment, the company with 1,000 employees that floats on the stock market and has its head office 150 miles from where I was sitting, felt like a close-knit family business.
Bovis Homes will have a long way to go before they win back the trust of their customers and employees, but for me they’ve made the best possible start.