viernes, 25 de enero de 2008

Mistakes About Mistakes

de Planning, Startups, Stories

Can your business afford to make mistakes? Would you do that deliberately? Would that be a good thing?

Thanks to Megan -- my youngest daughter -- for picking this up this morning. Writing in the New York Times, Alina Tugend notes two recent errors that were basically inconsequential. "But they bothered me and made me consider how we are taught to think of mistakes in our society." Ignoring the possibility that this is a hidden message from daughter to parent (gulp), I also see a lot of business implications. And they aren't hidden.

There's a lot of ambivalence around making mistakes.

On one hand, as children were taught that everyone makes mistakes and that the great thinkers and inventors embraced them. Thomas Edison's famous quote is often inscribed in schools and children's museums: "I have not failed. I have just found ten thousand ways that wont work."

On the other hand, good grades are usually a reward for doing things right, not making errors. Compliments are given for having the correct answer and, in fact, the wrong one may elicit scorn from classmates.

We grow up with a mixed message: making mistakes is a necessary learning tool, but we should avoid them.

The piece points out some interesting studies.

Carol S. Dweck, a psychology professor at Stanford University, has studied this and related issues for decades. "Studies with children and adults show that a large percentage cannot tolerate mistakes or setbacks," she said. In particular, those who believe that intelligence is fixed and cannot change tend to avoid taking chances that may lead to errors.

Often parents and teachers unwittingly encourage this mind-set by praising children for being smart rather than for trying hard or struggling with the process.

Prof. Dreck ran a study with fifth grade children, dividing them into one group praised for good results and another group praised for hard work. The ones praised for effort were far more likely to take on a more challenging new task than those that were praised for results. Then in a follow-up task, a test that was way too hard, those who'd been praised for results were three times more likely to lie about a bad score than those who had been praised for effort. Conclusion?

"One thing I've learned is that kids are exquisitely attuned to the real message, and the real message is, 'Be smart,'" Professor Dweck said. "It's not, 'We love it when you struggle, or when you learn and make mistakes.'"

And that comes with some advice:

As we get older, many of us invest a great deal in being right. When things go wrong, as they inevitably do, we focus on flagellating ourselves, blaming someone else or covering it up. Or we rationalize it by saying others make even more mistakes. What we do not want to do, most of the time, is learn from the experience.

I'll second that, but it's hard. I remember vividly the day my wife and I agreed we were sick and tired of the silver lining consolation prize of learning from the experience." One of us said "Yeah, but I'm sick of learning from experience. Next time let's just guess right from the beginning."

The article cites Prof. Paul J. H. Schoemaker, chairman of Decision Strategies International and teaches marketing at the Wharton School of the University of Pennsylvania, who puts mistakes into a business context with an article in Harvard Business Review titled The Wisdom of Deliberate Mistakes.

The resistance to making mistakes runs deep, he writes, but it is necessary for the following reasons, which he outlined in the article:

  • We are overconfident. “Inexperienced managers make many mistakes and learn from them. Experienced managers may become so good at the game they’re used to playing that they no longer see ways to improve significantly. They may need to make deliberate mistakes to test the limits of their knowledge.”
  • We are risk-averse because “our personal and professional pride is tied up in being right. Employees are rewarded for good decisions and penalized for failures, so they spend a great deal of time and energy trying not to make mistakes.”
  • We tend to favor data that confirms our beliefs.
  • We assume feedback is reliable, although in reality it is often lacking or misleading. We don’t often look outside tested channels.

This makes a lot of sense, but I wish he'd changed the title. "Deliberate Mistakes" is a tough concept. My business experience includes 19 years running a company that's grown to 40 employees without outside financing, and I don't think we had the luxury of making too many mistakes, and certainly not deliberately. We were spending our own money the whole time. I wish he'd called it "Dealing Wisely with Mistakes."

On the other hand, one advantage of bootstrapping, and owning the whole company as it grows up, is the luxury of making mistakes. I've posted before on this blog the story of how Philippe Kahn built Borland International from zero to public in three and a half years by making a lot of brilliant moves that looked like mistakes at the time. If he hadn't had free reign -- this was pre-venture-capital -- he wouldn't have had that luxury.

Another thing I think I've learned, as the company has grown, about delegation: you're not really delegating anything to anybody unless you support them, after the fact, when it turns out they've made the wrong choice. When you bite back later on bad results, nobody will risk making another mistake, which means, basically, that you haven't delegated anything.

And, finally, in startups, small business, and entrepreneurship, fear of making mistakes can lead to paralysis. You have to know that you can never be sure when you're guessing the future. Don't get caught hanging back, waiting for more data, at least not too often. You have to deal with uncertainty in small and medium business. I'm certain about that.

So I'm not sure. I can't stomach deliberate mistakes, I am sure of that. But I still make the mistakes I make by mistake, far too many, and I hope I learn from them, whether I like it or not.

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