“The most ex­pens­ive mis­take is not the er­ror, it is con­tinu­ing it”

Why was an IT system that never functioned properly allowed to accumulate costs of DKK 3.5 billion, despite repeated warnings from employees? And why were doctors who raised concerns about a colleague performing procedures that contributed to patient deaths reported to the police and threatened with dismissal, while that colleague was protected?

Organisations have good reasons to invest in IT systems and recruit highly regarded medical researchers. What is harder to explain is why they fail to stop when serious warnings emerge. In one case, it took eight years before the IT system was abandoned. In the other, it took ten years before the doctor was dismissed — and ultimately imprisoned.

In neither case did management intervene in time. Only when external pressure mounted, in the form of system failures and critical journalism, did action follow. Why do organisations struggle to reverse flawed decisions? What are the consequences of ignoring internal warnings? And how can organisations respond more effectively when early signs of failure appear?

Criticism is downplayed

Challenging an established project requires significant effort. Large initiatives are often led by charismatic, committed leaders who have built a strong case in support of their projects.

When criticism arises, it is typically downplayed and countered with arguments that support the project.

Moreover, project leaders expect problems and tend to view them as manageable challenges rather than signs of fundamental failure. Combined with strong incentives to succeed and little or no opposition, this makes it, quite simply, a difficult task for anyone who questions a project’s viability.

For example, Dr Isabelle Royer of IAE Lyon found in one case that it required a project manager to retire before an expensive industrial project was abandoned.

A culture of blame

Research also points to two social factors that hinder the flow of critical information: information culture and blame culture. Sociologist Ron Westrum distinguishes between constructive and destructive information cultures. In healthy, mission-driven cultures, information is actively shared and people collaborate to solve problems. In bureaucratic cultures, there are clear, formal channels for reporting and responding to issues. In political cultures, however, information is treated as a political asset: it is hoarded, suppressed or manipulated.

In the case mentioned above, doctors and nurses reported serious problems expecting a formal response from a bureaucratic system. Instead, they were threatened.

When leaders foster political information environments, those who raise concerns are seen as opponents. This often goes hand in hand with a culture of blame, where organisations target the messenger rather than address the underlying issues.

Blame cultures are highly damaging. Not only do problems persist because they are suppressed; others also learn that speaking up carries personal risk. Over time, this changes employees’ cost–benefit calculations: it becomes safer to remain silent than to report problems. Despite this, some still raise concerns, weighing the broader harm to patients, the public and the organisation against the personal cost.

The consequences of ignoring internal warnings can be extremely costly. The Swedish IT system Millennium has cost more than DKK 3.5 billion, while the scandal involving surgeon Paolo Macchiarini led to compensation payments exceeding DKK 700 million.

But how can this be avoided?

The legitimate pause

Dr Royer recommends, as a counterweight to strong project champions, appointing “exit champions” with the authority to gather concerns and halt projects when necessary.

Xerox, for example, has worked with fixed decision points where projects are continuously assessed and where it is legitimate to pause or stop — not only to continue.

This may sound simple, but in practice it is the opposite: in many organisations, continuation is the default option, while stopping is perceived as failure.

Research also shows that how a project is framed matters greatly. When something is presented as critical to a company’s future, it becomes far more difficult to shut down — even when warnings accumulate. Boeing is a recent example of the costs of political and blame-driven cultures.

Research by Dr Pedro Monteiro at Copenhagen Business School describes how Boeing’s safety culture deteriorated after leadership shifted focus from safety to financial performance.

Side-lined

Formal reporting systems were weakened, employees who raised concerns faced reprisals, and internal experts were side-lined. The consequences were severe: 345 people lost their lives in plane crashes, costs have been estimated at USD 35 billion since 2019, and whistleblowers were subjected to retaliation, leading to at least one suicide.

In Boeing’s case, trade unions played a crucial role in gathering and amplifying safety concerns. They also helped bring attention to issues in the Millennium IT case and supported doctors who reported Macchiarini’s misconduct.

When management and boards fail to act, trade unions may intervene — but their ability to resolve systemic problems remains limited. 

That responsibility ultimately lies with leadership. Political information cultures and blame cultures are created and sustained by poor leadership — and must be addressed through better leadership.