Mistakes – Are they worth the risk?

Mistakes? We should avoid them right? Not good for us personally, not good for us professionally. There is though an alternative hypothesis, that it is more important to work quickly and risk making mistakes than to work slowly and make sure that everything is correct.

It’s a conundrum, and like most conundrums, it all depends. (as a complete aside there is another conumdrum about the proper plural for conundrum. Should it be “conumdra” or “conumdrums” or even “conundrumi” ….. but I digress. It must be late!!)

Anyway back to making mistakes. I was once told by an Insead Professor of Marketing, that there were good mistakes and bad mistakes. (This was after a monumental blunder in a Marketing Strategy Exercise!). He went on to say that the Good mistakes are the ones you learn from. However comforting this was for a relatively new entrant to Marketing (My first job was marketing baby dinosaurs), his remark cannot be true all the time. There is a category of mistakes that are catastrophic.

Mistakes

Kodak’s decision not to legitimize the digital camera market by launching technology that they originated would be one such example. So this means that you have to evaluate potential mistakes to see if they might be catastrophic.

So here we are: you can learn from some mistakes, while others might kill you, or your business. So what do we do?

As a Consultant I wish I could wave a  magic wand or give you a simple algorithm, but I cannot. Those who try are making a big mistake themselves.

Risk taking vs Making Mistakes

Making mistakes and risk taking go hand in hand, To some degree whether you make mistakes or not depends on how risk averse you are. They’re not the same but they are linked. If you have a high tolerance for risk then you might be prone to make more mistakes, because you are prepared to move ahead while elements of your plan are uncertain or unconfirmed. If you have a low tolerance for risk then it might be that you make less mistakes as you in effect get all yot ducks in a row before acting.

The other side to this particular coin is that by preparing to the nth degree might well mean you miss the opportunity, while taking a risk might lead to a catastrophic mistake. I used to work for a manager who used to ask so many “what if” questions, that many an opportunity was wasted. (Yes Ron, I mean you!!)

So what’s my advice?

There was some research conducted in 1989 by Deborah J. Mitchell, of the Wharton School; Jay Russo, of Cornell; and Nancy Pennington, of the University of Colorado which always resonated with me. It found that imagining that an event has already occurred, increases the ability to correctly identify reasons for future outcomes by 30%. They called this by the rather neat name of :”Prospective hindsight”.

This was adapted by a number of people (including myself in my own way) and turned into something called “Premortems”.   —. We have used this technique to help project teams identify risks at the outset. As the Harvard Business review puts it quite succinctly (which is unusual in itself!)

Premortem in a business setting comes at the beginning of a project rather than the end, so that theproject can be improved rather than autopsied. Unlike a typical critiquing session, in which team 
members are asked what might go wrong, the premortem operates on the assumption that the 
“patient” has died, and so asks what did go wrong.

The presumption of failure, (a great example of prospective hindsight) really does help in identifying reasons for failure! This in turn helps in any evaluation of mistakes and can therefore become the basis for avoiding them. Nor need it be a long process. It can be done alone though its best done in a group of at least two!

It helps avoid catastrophic mistakes but doesn’t really impede taking the opportunity when it arises.

For my business itself and for the organisations that I advise, it seems to work well. It helps to determine which potential mistakes are worth the risk.

I found this transcript Freakonomics Radio podcast which explores these issues and is certainly worth a read Failure Is Your Friend

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