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Digital EditionDetermining the Root Cause of the Surfside Condo Collapse: Failed Risk Management Is the Culprit
John (Jack) Hampton was a Professor of Business at St. Peter’s University, a core faculty member at the International School of Management (Paris), and a Risk Insider at Risk and Insurance magazine where he was named a 2018 All Star. He was Executive Director of the Risk and Insurance Management Society (RIMS), dean of the schools of business at Seton Hall and Connecticut State universities, and provost of the College of Insurance and SUNY Maritime College in New York City.
Last month, a 12-story condominium in Surfside, Florida collapsed, killing dozens of people. It will take years to determine the cause.
Or will it?
In risk management, a “root cause” is a factor, condition or chain of events that causes the emergence of a risk. The use of the term “root” signals the possibility that the problem may be deep, basic or hidden from view.
A car won’t start. Which is the root cause?
- Why? — The battery is dead.
- Why? — The alternator is not functioning.
- Why? — The alternator belt broke.
- Why? — The belt went well beyond its useful service life and was not replaced.
- Why? — The car was not maintained properly.
It’s not the fault of the battery or alternator. The owner simply needs to look in the mirror to see the root cause.
Risk managers follow a process to deal with root causes:
- Detective Actions. They sniff around looking for irregularities that need to be identified and eliminated. This can be anything from weak quality control to fraud prevention or legal compliance.
- Preventative Actions. When they spot a weakness, risk managers encourage action. This can involve separating people from dangerous areas or suggesting behaviors to protect the organization’s reputation.
- Corrective Actions. During their detective work, they see things that can go wrong. They try to reach the decision makers who can allocate resources to fix the problems.
- Directive Actions. Sometimes they simply see activity that could cause disruption. They encourage directors, trustees or senior executives to give specific instructions to start or stop behaviors.
Where were the risk managers for the Champlain Towers South condominium, the town of Surfside, Dade County and other authorized decision makers in the years leading up to the collapse?
Before answering this question, let’s be fair to these people.
The town rigorously enforces “common code violations,” keeping alleys clean, regulating window signs on the main shopping street, clearing storm drains, regulating yard sales, removing yard debris and trimming trees.
So how could they ignore an immediate response to a 2018 report identifying a “major error” in the construction of the pool deck?
The inspectors wrote “the failure to replace waterproofing in the near future will cause the extent of the concrete deterioration to expand exponentially.” They further pointed out the repair would be “extremely expensive.”
This is the defining moment for root cause analysis. What happened?
- What? — The building collapsed with all the horror that accompanied it.
- Why? — Because an inspection report was ignored.
- Why? — Because the repair would be expensive.
- Why? — Because the pool was built improperly.
- Why? — Because buildings in Florida were being “slapped up” in 1981, and inspectors did not have the “teeth” to force corrections in 2018.
- Why? — Because people and organizations often lack the will or ability to insist upon proper risk management.
Thus, we have it.
Unlike the police, public officials, property managers and other spokespeople, we know what happened. The root cause was not a failure of the concrete. It was a failure of risk management.
Now the situation may be corrected. Dade County will inspect all aging buildings in a short period of time. New construction codes may be tightened. Changes will occur.
What is the lesson learned? Simple.
We should address visible issues before we have to clean up the debris.
Let’s not restrict the lesson to the world of condominiums. If we don’t do these things, we can at least be satisfied that we know the root cause of many future disasters. We only have to look in the mirror. &
