The Case for Pre-Mortems

In the wake of the financial crisis (2008-12), the Bank of England accused UK banks of “disaster myopia” – they didn’t see failure coming.  The Bank then insisted on reverse stress tests being performed and submitted to the Regulator on an annual basis.  The point was for the institutions to imagine scenarios in which they had failed, and then to work backwards to find out how it had happened, and thus how it might have been prevented or controlled.  Rather than perform a post-mortem after failing, they should perform a pre-mortem and avoid failure.

This can also be applied to projects, working out how they might fail, ahead of implementation, and so avoid that fate.

NASA’s Challenger space shuttle was launched from Cape Canaveral in Florida on 28 January 1986.  The launch had been postponed several times and there was considerable public profile because the crew included a guest astronaut, a New Hampshire schoolteacher called Christa McAuliffe.  When it came to the eve of the next proposed launch-date, it was very cold, colder than the temperature range for the rockets.  The senior engineer from the supplier of the rockets recommended another postponement as the O-rings on the boosters might be damaged by the cold.  NASA rejected the recommendation and got someone higher up in the supplier organisation to sign off on the launch.

The launch went ahead and the shuttle blew up 73 seconds after launch, killing all seven crew members; a disaster watched live on TV by millions of Americans.

The post-mortem performed by a Presidential Commission found that the O-rings had failed.

Data Sources: FCA & PRA websites, WikipediaThink like a Freak by Steve D. Levitt & Stephen J. Dubner

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