Learn to build an error management culture
| DOI | https://doi.org/10.1108/JFRC-12-2018-0156 |
| Pages | 57-73 |
| Published date | 17 October 2019 |
| Date | 17 October 2019 |
| Author | Elianne van Steenbergen,Danny van Dijk,Céline Christensen,Tessa Coffeng,Naomi Ellemers |
Learn to build an error
management culture
Elianne van Steenbergen
Dutch Authority for the Financial Markets, Amsterdam, The Netherlands and
Department of Social, Health, and Organizational Psychology, Utrecht University,
Utrecht, The Netherlands
Danny van Dijk and Céline Christensen
Dutch Authority for the Financial Markets, Amsterdam, The Netherlands
Tessa Coffeng
Dutch Authority for the Financial Markets, Amsterdam, The Netherlands and
Department of Social, Health, and Organizational Psychology, Utrecht University,
Utrecht, The Netherlands, and
Naomi Ellemers
Utrecht University, Utrecht, The Netherlands
Abstract
Purpose –Emphasizingthat errors are unacceptable and will be sanctioneddoes not prevent that errors are
made –but can causeworkers to cover up mistakes. Making an effort to identify things that go wrong to learn
from them and prevent errors in the futureoffers a more fruitful approach. By sharing an applicable LEARN
framework, this paper aims to inspire and give direction to financial corporations in building an error
managementculture within their organizations.
Design/methodology/approach –The behavior and culture team of the Dutch Authority for the
Financial Markets (AFM) collaborated closely with social and organizational psychologists from Utrecht
University to study error management. The results of a literature study were combined with the findings
obtained from a survey (N=436) and in-depth interviews (N= 15) among employees of 13 Dutch financial
corporationsthat are active within the infrastructureof the capital markets.
Findings –Tone at the top and direct managers’behavior were positively related to error management
culture, which in turn related to more learning. Combining these findings with relevant psychological
literature resulted in the LEARN framework, which can guide organizations in developing actions and
interventions to build an effective error management culture: Let the board take ownership, Engage
employees,Align structure and culture, Refocus from person to system and Narrate the best examples.
Originality/value –Stimulating financial corporations to start building a healthiercorporate culture by
offering the LEARN framework –and recruiting insights from social and organizational psychology to do
so –extends traditionalsupervisory approaches.
Keywords Psychology, Supervision, Behavior and culture, Change, Error management
Paper type Research paper
“Culture in financial services is widely accepted as a key root cause of the major conduct failings
that have occurred within the industry in recent history, causing harm to both consumers and
markets”.–Jonathan Davidson, Director of supervision, foreword Transforming Culture in
Financial Services (FCA, 2018, p. 3).
Since the financial crisis, financial corporations, politicians and the general public have been
pushing for “a cultural change”in the financial sector. Moreover, an increasing number of
external supervisors worldwide, such as the Financial Conduct Authority (FCA), the Financial
Stability Board (FSB) and the Dutch Central Bank (DNB) are of the opinion that transforming
Error
management
57
Received14 December 2018
Revised24 March 2019
26June 2019
Accepted9 September 2019
Journalof Financial Regulation
andCompliance
Vol.28 No. 1, 2020
pp. 57-73
© Emerald Publishing Limited
1358-1988
DOI 10.1108/JFRC-12-2018-0156
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1358-1988.htm
toward a “healthy corporate culture”is of key importance for financial corporations to better
serve the interests of customers, to prevent misconduct and to rebuild trust in the financial
sector (DNB, 2008;FCA, 2018;FSB, 2017;FSB, 2018). Discussions on culture, however, often
remain abstract, and financial corporations struggle with implementing desired changes. It is
not always clear what in the culture needs to be transformed and how this can be done.
In this paper, we argue that error management is an important and tangible element of a
healthy corporate culture, which can be incorporated in organizations’own corporate culture.
This paper describes what an error management culture looks like, why it is important and how it
can be built by financial corporations. The aim of this paper is to inspire and guide the building of
an error management culture by financial corporations and integrate this into their organization,
by presenting a LEARN framework: Let the board take ownership, Engage employees, Align
structure and culture, Refocus from person to system and Narrate the best examples.
This paper is the result of close collaboration between the behavior and culture team of the Dutch
Authority for the Financial Markets (AFM) and social and organizational psychologists of Utrecht
University. We conducted an empirical study on error management, which consisted of surveys
(N= 436) and in-depth interviews (N= 15) among employees of 13 Dutch corporations currently
active within the infrastructure of the capital markets. The LEARN framework was developed by
combining relevant psychological literature on the requirements for achieving behavioral change in
organizations with the quantitative and qualitative results obtained in our study.
How can the LEARN framework help corporations in building an error management culture?
LEARN is not a simple “five steps you’re done”approach, nor does it contain a “one-size-fits-all
advice”to organizations by specifying concrete actions that represent the desired culture.
Initiatives that are popular in some organizations –such as organizing a “trophy for the biggest
error,”“awallofshame”or “celebrate your error sessions”–can be effective but not necessarily
help every organization. LEARN offers a framework along which corporations can design and
structure actions and interventions that fittheir organizational context. It aims to give direction
to organizations in developing actions and interventions to build an error management culture.
By presenting and communicating this framework, we also aim to inspire other supervisory
bodies to give more “flesh and blood”to the supervision of behavior and culture.
As an independent market conduct authority, the AFM aims to contribute to a
sustainable financial system and prosperity in The Netherlands. The AFM is
committed to promoting healthy corporate cultures within financial corporations,
namely, corporate cultures in which organizational members demonstrate behavior
that serves the interests of customers and society.
In 2016, the AFM and Utrecht University started a unique form of co-creation in which
AFM’s behavior and culture team closely collaborates with social and organizational
psychologists from the University of Utrecht’s Psychology of Supervision group.
Insights and lessons from supervisory practice are tested against scientific knowledge.
Relevant theory, empirical research and validated methods are translated or made
available for supervisory practice, and new scientific insights are developed.
AFM’s Behavior and Culture team focuses on identifying concrete elements of a
healthy corporate culture in which the customer’s interest is central. These elements
represent building blocks within an organization’s culture that have great potential
to positively affect the quality of services to customers and ethical behavior of
employees. Error management culture, balanced decision-making and fair rewards
and recognition have alre ady been identified as among the building blocks of a
healthy corporate culture (Christensen et al.,2018). The LEARN framework was
developedconjointly, and this paper represents the sharedvision of the authors.
JFRC
28,1
58
To continue reading
Request your trial