In Pursuit of Foresight

Disaster Incubation Theory Re-imagined

Mike Lauder

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317117995
• Edition: 1
• Topic: Business
• Subtopic: Financial Risk Management
• Index: Business

Many inquiry reports blame management for their failures of foresight. These reports are based on the premise that, with a little more thought, these oversights, and so the crisis, would have been avoided. Is it really that simple? The important question is whether, without hindsight, it would have even been possible to identify the actual factors that lead to the failure. This book explores this issue as a practical problem.

The book takes Barry Turner's Disaster Incubation Theory as its central theme. The first chapter explores the way Turner structured his theory and the way it has been used, before re-imagining it as a way to fostering foresight. The next three chapters examine key issues in detail. They explain why Turner's model was chosen, outline the issues that need to be considered when seeking to prevent such failures and how to use the proposed frameworks. Chapter 5 examines the lessons learnt from this study and, in particular, looks at the mental approach required when seeking such foresight. Finally, Chapter 6 provides a fully worked example. It uses work by Frank Stech who has applied Turner's theory to a past case.

Crises occur everywhere and we continue to struggle to avoid them. In this book Mike Lauder provides executives with thinking tools to help them avoid missing the warning signs of their next crisis.

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Chapter 1
In Appreciation of Barry Turner

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Introduction

Many inquiry reports blame managers for the failures of foresight. These reports are founded on the premise that, with a little more thought, these oversights which enabled the crisis to occur, would have been avoided. Is it really that simple? These inquiry reports then go on to offer recommendations that, in hindsight, may have prevented the events from occurring, but may also be the genesis of the next crisis. In many cases these recommendations have failed to avoid the reverse fallacy. I have described the reverse fallacy in more detail elsewhere.¹ For the purpose of this book, it is sufficient to define the reverse fallacy as an action or omission that is seen as being significant in the context of one particular tragedy, but then leads to a recommendation that is not universally appropriate. This may then result in unintended consequences at some point in the future. Such recommendations are just another type of failure of foresight.

The really important question however is whether, without hindsight, it is possible to avoid such failures. An important enabler when trying to avoid such failures of foresight is to be able to identify in advance the factors that might lead to such failure. Traditionally this is done through the means of a risk assessment. However this procedural approach has a number of significant drawbacks. The first is that risk assessments are generally conducted at the lower levels of an organisation. The risks identified, that are then collated into a risk register, become dominated by low-level safety issues. While important, these risks tend to distract managers from looking at what is strategically important. The second issue with this process is that it tends to exclude from consideration risks that would have significant consequences for the organisation because they are only likely to occur very rarely; these types of risk have become known as Black Swans.² If the volume of Black Swans identified within inquiry reports is a guide, they occur more often than we would like to think. The third issue is that because busy managers are presented with detailed risk registers containing a plethora of problems that need to be addressed, they forget to assess for themselves what is important to their business. This final issue has been identified within the developing practice labelled Enterprise Risk Management (or ERM). ERM now requires a twin approach to be taken to risk assessment. One approach maintains the bottom-up method that is more generally used. The second approach requires a top-down assessment of the strategic risk; this approach has also been given the label risk governance. However, as this high-level approach to risk assessment is relatively immature, there is comparatively little written about it and, therefore, for practitioners, it may be difficult to see what this approach might look like. In this book I look to help close this gap.

The desire to close this gap has led to the quest for alternative or complimentary methods of generating foresight of failure. Attributed to Eric Hollnagel is the sentiment that, “What you look for is what you find; what you find is what you fix”.³ Hollnagel is warning us that we often have to know that a problem exists, what factors are at play, before we will find evidence for it in a particular case. Based on this premise I have conducted an extensive search of academic and other literature in order to identify these factors.⁴ This research identified over 200 factors that others suggested are associated with failure. In my earlier work I grouped these factors into 20 categories for ease of their management. In this work I have gone further and, based on the idea behind the “magical number seven, plus or minus two”, I have reduced the number of categories to seven. Throughout this book, you will find that I have used italics for the specific purpose of identifying these factors. Terms found in italics are the labels being used to signify that the term has a defined academic meaning. These signify a much richer meaning than the words used would appear to have in themselves. I italicise these phrases to warn my reader that they should resist any temptation to give such phrases new meanings or to use these terms in new ways not previously implied.

Aim

The aim of this book is twofold. These will be addressed in its two parts. The first goal is to take a theory of disaster originally used to understand the causes of a failure and then refine and re-imagine it as a tool for foresight. In Chapter 2 I will explain why I have chosen to use Turner’s much quoted but under-utilised Disaster Incubation Theory rather than any of the other contenders. I will explain how I have seen it used by others and then conclude the first part of the book by re-imagining it as a catalyst for foresight. While conducting my analysis it became clear that it was essential to be able to identify which phase of the model an organisation was in. This dividing line evolved to be the onset of the crisis/disaster. In the simplest terms, organisations should know that they are either in a crisis or in the period during which a crisis is incubating; the issue becomes, “which crisis?”

For the purpose of generating foresight, once a crisis starts then it is too late. The second part of this book therefore looks at action that might be taken during the incubation period. This action is focused around the issues of prevent and prepare: that is, to prevent from happening that which the organisation must avoid and prepare the organisation to react to unwanted occurrences should they occur. I use the analysis of complex but well-known examples as the vehicle to develop my theoretical ideas. For the purpose of this book the terms disaster, accident, crisis and the like will be considered as synonymous and, for clarity, will just be referred to as unwanted events⁵ (or, for ease of reference, “events”). This rule will only be broken if such terms are used as part of a technical term or a quote. In the end, the purpose of this book is to provide a theoretical construct that will form the basis for future empirical work. For managers, a more selective reading of this book may provide them with ideas of how to assess more effectively what the future may hold for them.

In the remainder of this section I endeavour to explain Turner’s Disaster Incubation Theory and will use examples of how it has been applied to broaden our understanding of it. As a result of my original analysis of Turner’s theory, I started to imagine how it might be used to promote foresight and this may be by a reshaping of its configuration. I conclude this chapter by describing the new form.

Disaster Incubation Theory Described

As originally written, Disaster Incubation Theory consisted of a six-stage process (see Table 1.1). The issue being addressed in this book is one of how to use generic disaster theories such as this one as a tool to prevent future disasters, to generate foresight. As this book is concerned with how existing knowledge of the mechanisms that may lead to events might be used to prevent or reduce the effects of such events, it might therefore be assumed that this book is only concerned with the stages up to the emergence of the full event. This is not the case. We need to examine the whole model because someone else’s future is our past: if we just concentrate on passing our insight to the next generation we may forget that those before us were trying to do the same for us. If we do not learn from the past, why should the next generation?

DISASTER INCUBATION THEORY STAGES

Turner’s Disaster Incubation Theory stages are outlined in Table 1.1 and then described in more detail.

Table 1.1 Disaster Incubation Theory

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Stage I – Notionally Normal Starting Point:

Allows the context to be set, enables beliefs about potential hazards to be articulated and the precautions that are considered normal to be articulated.

Stage II – Incubation Period:

Explains the accumulation of an unnoticed set of events which are at odds with the accepted beliefs about hazards and the norms of their avoidance. All of these events must fall into one of two categories: either the events are not known to anyone or they are known but not fully understood by all concerned.

Stage III – Precipitating Event:

The event “forces itself to the attention and transforms general perceptions of stage II”. Such an event arouses attention because of its immediate characteristics, for example: the train crashes, the building catches fire, or share prices begin to drop.

Stage IV – Onset:

The precipitating event is followed immediately by the onset – Stage IV. The onset starts when “the immediate consequence of the collapse of cultural precautions becom[es] apparent”. These are the direct and unanticipated consequences of the failure, an onset which occurs with varying rate and intensity, and over an area of varying scope.

Stage V – Rescue and Salvage:

First stage adjustment: the immediate post-collapse situation is recognised in ad hoc adjustments which permit the work of rescue and salvage to be started.

Stage VI – Full Cultural Readjustment:

An inquiry or assessment is carried out, and beliefs and precautionary norms are adjusted to fit the newly gained understanding of the world.

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Stage I is described by Turner as “the set of culturally held beliefs” at a notionally normal starting point.⁶ He expands this by talking of “initial culturally accepted beliefs about the world and its hazards” and the “associated precautionary norms set out in laws, codes of practice, mores, and folkways”. This is interpreted to mean that before any analysis starts it is necessary to establish a point of departure, to establish the point at which the organisation felt that it was based on solid foundations. While it is accepted that this will be a social construct, its apparent arbitrary nature is legitimised by the explanation of why the point was chosen. Once the point has been chosen and justified, it is necessary to set the context for the subsequent analysis. From Turner’s perspective the context was not only to include details of the hazards those involved believed they faced but also the precautions that they considered normal at that point and, by implication, appropriate. The essence of Stage I is to establish when (if ever) the system believed it had the foresight to manage the world it faced.

Stage II is described by Turner as the incubation period when a “disaster or a cultural collapse takes place because of some inaccuracy or inadequacy in the accepted norms and beliefs (where) there is an accumulation of a number of events that are at odds with the picture of the world and its hazards represented by existing norms and beliefs”.⁷ This is the period where the norms are eroded and factors are at work that led (directly or indirectly) to the subsequent events. This period is critical to the avoidance of failures of f...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• Acknowledgements
• 1 In Appreciation of Barry Turner
• 2 Selecting a Framework for Foresight
• 3 Issues for Foresight
• 4 Debate Framework
• 5 Lesson to be Learnt
• 6 Pursuing Foresight
• Epilogue
• Bibliography
• Index