Professor András Tilcsik wants you to think long and hard about failure —and what you should do about it.
In his new book, Meltdown: Why Our Systems Fail and What We Can Do About It (Penguin, Mar 20, 2018), he and former derivatives trader Chris Clearfield study catastrophes in-depth. By taking a behind-the-scenes look at what led to several high-profile failures, speaking with experts and incorporating insights from academic research, the two have developed an essential handbook on preventing and managing disasters.
In many ways, Tilcsik and Clearfield seem uniquely qualified to write a book on meltdowns.
When the former college roommates reconnected years ago, Clearfield had recently weathered the 2008 financial crisis as a Wall Street trader. Meanwhile, Tilcsik had just accepted a faculty position at Rotman, leading new research on how organizations function and fail. His most recent papers have examined which types of entrepreneurs are coachable and how ‘resume whitening’ might impact the hiring process.
Realizing that they had complementary experiences and perspectives when it came to failure, the two began exploring the topic together, eventually crafting a book proposal that won the 2015 Bracken Bower Prize. As their research progressed, Tilcsik and Clearfield uncovered a few common themes of modern-day meltdowns.
“Unlike in previous generations, the catastrophic events we hear about today are often triggered by small human errors,” explains Tilcsik. “Someone accidentally pressing the wrong button or making a minor misstep can cause a lot of confusion in complex, hard-to-control systems. Suddenly, we have a disaster on our hands.”
“We know that today’s meltdowns are often caused by small things breaking in complex systems. Now, we need to think about what we can do about it.”
—András Tilcsik, Associate Professor of Strategic Management
With each chapter, the authors present real-life examples of where a collection of seemingly small glitches had huge consequences — from causing actual nuclear meltdowns to corporate bankruptcies to botched PR campaigns, among other catastrophes.
Thankfully, the authors also offer some advice on how to proceed when the unexpected happens.
Transparency, says Tilcsik, is central to any strategy. It needs to be incorporated in how our systems are designed and within workplace culture.
“If we understand what our coworkers are working on and how their decisions and work can impact us and others, we’ll have a better sense of detecting warning signs and acting faster.”
Discussing ‘near-misses’ is crucial in preventing future catastrophes, he says. This is why open dialogue and hearing from diverse voices is so important.
“We need to encourage people to speak up and ask questions so that everyone has a bit more clarity of roles and how things work. We’ll end up making better choices in times of crisis.”
Meltdown also goes hand-in-hand with the popular class Tilcsik teaches in the Commerce and MBA programs, Catastrophic Failures in Organizations. Each week, Tilcsik — who was named a 40 under 40 professor by Poets & Quants — dissects corporate cases where things have fallen apart, with students.
“One thing that every business school student is looking for, regardless of the industry they work in, is how to handle unexpected challenges,” he says. “There is so much to be learned from studying other industries and past cases.”
“In many ways, Rotman students are coauthors on the book. They brought their enthusiasm — and skepticism — to each class. They pushed me and Chris to keep questioning, thinking and moving forward.”
Written by Rebecca Cheung | More Rotman Insights »