The Power of a Crisis: How Leaders Create Habits Through Accident : And Design

The chapter highlights how crises serve as pivotal opportunities for organizational change, specifically focusing on habit formation and transformation in high-pressure situations. It presents detailed case studies from Rhode Island Hospital and the London Underground's King's Cross station fire to illustrate how deeply ingrained institutional habits can precipitate disaster when left unchecked. Both institutions relied on unwritten rules and routines that eventually failed, leading to catastrophic outcomes. However, these crises also presented unique opportunities to overhaul dysfunctional habits and create safer, more efficient operations.

Key aspects of each situation include:

Rhode Island Hospital:

• Pre-Crisis Dysfunctional Habits: The hospital had developed a culture where tensions between nurses and physicians led to poor communication and significant errors, resulting in several wrong-site surgeries.
• Crisis as an Opportunity: The repeated surgical errors and subsequent media scrutiny created a crisis, leading hospital administrators to recognize the need for drastic operational and cultural changes.
• Institutional Changes and Outcomes: The hospital initiated extensive training emphasizing teamwork and introduced new safety protocols like mandatory surgical checklists and anonymous reporting systems for staff. These changes culminated in a safer environment and a significant decline in surgical errors.

London Underground King's Cross Fire:

• Pre-Crisis Truce and Failure: The London Underground had established routines and divisions of authority that worked under normal circumstances but proved inadequate in emergencies. Detailed informal protocols prevented employees from acting outside their specific roles, contributing to ineffective responses to the emerging crisis.
• Public Inquiry and Organizational Shift: The investigation into the fire exposed the Underground's ineffective fire safety practices and led to high-level resigns and a complete overhaul of safety routines. New policies were put in place, including clear accountability for passenger safety, which significantly improved overall safety.

The chapter demonstrates that crisis-induced transformations often hinge on leaders' ability to leverage the malleable state of organizational habits during emergencies to make necessary changes. These transformations require clear reassignment of responsibilities and, often, the restructuring of power dynamics within the organization. Notably, well-managed crises can lead to more resilient institutional habits that prevent future failures and improve operational efficiency.

In both cases, the crises led to a fundamental shift in organizational behavior, turning dangerous routine practices into opportunities for significant improvement and innovation. By understanding and adjusting the routines that underpin organizational behavior, both institutions were able to recover from their crises, ultimately emerging stronger and more capable than before.