A prevailing assumption, among firms and regulators alike, appears to be that misconduct problems can be discovered only after they occur. This ‘detect and correct’ mindset suggests that we should invest in systems of surveillance and monitoring to detect misconduct as it takes place, and rely on whistleblowers to call out misconduct that goes undetected by these systems.
But behavioral scientists have determined that people are prone to deviate from organizational standards for behavior in order to accommodate various operational and social pressures. They will, thus, regularly deviate from established standards, both at the individual and group level. This ’Normalization of Deviance’ was found to be at the center of the Challenger space shuttle disaster in 1986, and further studies have found the dynamic to be at work in countless subsequent organizational failures.
Recognizing this, we must question the wisdom of relying on whistleblowers: can we expect people to blow the whistle on deviant behavior that has been normalized? While whistleblowing programs and bounty schemes may help to generate notice of something especially egregious – within the cultural context of a given organization undesirable behavior which has become routine will not be viewed by employees as ‘wrong’ and will therefore likely go unreported — until catastrophic events unfold.
We must move away from a ‘detect and correct’ mindset and work towards a ‘predict and prevent’ approach to managing behavioral risk in organizations.
Learn more in this outtake from the 2021 Starling Compendium here.