Google’s Early Earnings Release – “Human Error” or Process Problem?
Here's an interesting story from this week: “Google early earnings release stuns traders.” Reportedly, the Google financial report for Wall Street was mistakenly released EARLY. Instead of releasing after the close of trading, it was sent out by R.R. Donnelly, the company that manages that for Google, just after noon with placeholder text that included “Pending Larry Quote.”
This surprised Wall Street, the stock price dropped by almost 10% and trading was halted.
What was blamed? “Human Error.” But what's behind that phrase?
From the story:
In a statement Thursday, Google blamed its financial printer R.R. Donnelley for hitting the button too early. Google said the printer, which is a leader in the field, acknowledged that it had filed the draft of the 8-K earnings statement without “authorization.”
In a conference call with Wall Street analysts Google CEO Page Larry Page apologized for the uncertainty and inconvenience caused by the early release of their earnings numbers.
“I am sorry for the scramble earlier today,” Page said. “(RR Donnelly) hit send on the release just a bit early.”
There will be an investigation. I wonder if the investigation will focus on WHO did this or HOW it occurred?
In situations like this, checklists and other simple procedure controls can be incredibly helpful. What is process for authorizations and approvals to occur? How does the person hitting “send” know with 100% certainty that it's ready to be sent? Are there error proofing mechanisms in place to prevent the early send?
Looking at and understanding “how could this have occurred?” will be far more likely to prevent future occurrences. R.R. Donnelly can learn from this so that an early release doesn't happen for any of their customers in the future, not just for Google.