The summary of why problems hide in an organisation is interesting. However, there are elements of our recessionary business environment that change the game. Research indicates that in dynamic and complex financial environments a more decentralised decision-making model is required, bringing the decisions closer to line managers - where the information resides. This eliminates some of the 'forest and trees' issue pointed out in the posting. Generally these types of turbulent economic times require more flexible and focued leadership - and development of the behaviours to operate in that way.

It is interesting that you mention over-reliance on formal analysis. My experience has been quite the opposite. Many leaders rely too much on intuition and previous experience to make decisions.

Both approaches have their place in organizational decision-making. They each have strengths and weaknesses and the best leaders use both when possible.

The problem Roberto sees is that without hard data, there is a tendency to dismiss the warning signs of a potential problem. He believes fact-based problem solving is important but he adds, “In many instances, managers and employees first identify potential problems because their intuition suggests that something is not quite right. Those first early warning signs do not come from a large dataset, but rather from an individual's gut. By the time the data emerge to support the conclusion that a problem exists, the organization may be facing much more serious issues.
(In both NASA space shuttle accidents, engineers had serious concerns about the safety of the vehicle, but they could not prove their case with statistically significant data. Instead, their intuition told them that the shuttle was not safe. The NASA culture tended to downplay judgments based on instinct, instead emphasizing quantitative evidence from large datasets.)”

Roberto makes some excellent points. Here are my thoughts on this issue:

1. Data is important and the better the data, the higher probability of a good decision. However, delay or avoidance of making the decision while waiting for data that contributes marginally to the decision can be fatal. I believe good leaders have a good sense of balance between decision time, having enough relevant data, and confidence in their team members' recommendations to then proceed and make a decision. In addition, good leaders know how and when to delegate decisions. This is a hallmark of an organization with empowered employees.

2. A culture of open communication is essential. This is not to say, for example, that a NASA engineer should copy the Director on all their emails, but that relevant communications on major issues or problems should find their way up the management chain. Good leaders establish this culture by empowering people and keeping their finger on the pulse of their organization. HP's method for this is Management By Wandering Around (MBWA) and I have found this to work very well.

3. It may be true that some organizations do not train people how to spot problems and communicate their concerns. A culture emphasizing empowerment of employees embodies this behavior. However, without reinforcement and support from the leader and subordinate managers, the desired identification and communication of potential problems may not occur.

In these recessionary times, the organizations with good leaders and an empowered team of employees stand the best chance to survive and prosper.

Roberto makes some great points about problems. From my personal experience I've found that some people are simply satisfied with the status quo and don't wish to make the effort to improve a situation.

The true challenge is to align the interests of the employees and the interests of the organization. Rather than punish employees for bringing to light mistakes or problems, we need to reward those who do so!

John you're right. Roberto wrote that leaders have to make detecting problems a priority, rather than simply making heroes of those who put out the fires.

I'm very excited to see such interesting discussion about my new book. Thank you to everyone for taking a look as well as for offering your insights. I would like to note that my primary goal with the book is to offer practical advice for leaders as to how they might detect small problems more effectively before they mushroom into large-scale failures. To that end, I've tried to identify (through my research) seven key capabilities that a leader must master to become an effective problem-finder. For instance, I argue that leaders need to become "ethnographers" i.e. they have to become like anthropologist, such as Margaret Mead, who go out and observe people in their natural settings. By honing their powers of observation, leaders can get a much better sense of what is actually taking place in their organizations. Let's face it... if we only listen to what people tell us, we can find ourselves in deep trouble. After all, people often say one thing and do another; research clearly shows that to be the case. Thus, effective problem-finders have become very skilled as observers, not simply as listeners.