Heidi Grant Halvorson - comparing yourself to others is a mistake; to build resilience, track your own improvement

From the HBR Blog Network, which asked their contributors, "What do graduates really need to know about the world of work?" Halvorson's new book, cowritten with E. Tory Higgins, is "Focus: Use Different Ways of Seeing the World for Success and Influence"

There will be obstacles, setbacks, challenges. Many things will be more difficult than you thought they'd be. The key to success (scientifically speaking) is perseverance. You've just got to hang in there — there's no other way to win. But how do you do it? A great way to be more resilient is to stop comparing yourself to other people, and compare yourself to your own past performance — last week, last month, last year. Are you improving? That's the only question that matters.

To jump back in after failure, you need to have, or build, irrational confidence

Interesting post on HBR Blog Network by Art Papas,co-founder and CEO of Bullhorn, a vendor of recruiting software.

Papas declares in his title that "For Entrepreneurs, Failure Isn't Always a Good Teacher" and goes on to write,

Failure makes many of us less confident and less aggressive. We become gun shy. That's not surprising. Unfortunately, the cold reality is that once you've failed as an entrepreneur, you need to have blind confidence and a healthy sense of aggression to prove to people that you actually can succeed. You need to try again, and brace yourself to be criticized, lectured, doubted, and flat-out ignored by investors and sometimes even your own team. If at first you don't succeed, you're in for the fight of your life.

This is a good point, and he backs it up with an amazing story:

When I first started Bullhorn in 1999, our original concept was the product of some brainstorming between me and my co-founder. His idea was, "Why don't we build a platform for people to display their creative work on the internet?" Then I added, "We could make it a marketplace for those people to get jobs." Nobody had ever told us that this was a problem that needed solving, yet we thought it was a great idea. So did our original investors. In fact, when we took the idea to creative professionals, they really liked it as well. Unfortunately, when we took it to the businesses that were making hiring decisions, it was a total flop.

So our first business model failed. After a few months, as our cash dwindled, we thought up yet another problem that we could solve. Our investors loved that idea too. But, much like our previous efforts, we discovered that no one actually suffered from the problem we were out to solve. Our second business model failed, as well. Then the dot-com bubble collapsed. Our early investors quickly turned from loving their investment in Bullhorn to hating it and they shut us off from any additional capital. We decided to forgo salaries to stretch our cash. I was paying my rent by maxing out my credit cards. Then a business dropped in our laps. We met someone with a problem that needed solving and we were uniquely poised to solve it. We realized we had a game-changing idea on our hands: creating the first software-as-a-service applicant tracking system for recruiters. When our new product started to take off, we needed more money to get to the next level. Unfortunately, our investors looked at me like I was the boy who cried wolf and rejected the idea out of hand. The sales traction and momentum was not compelling to them in any way. They told us it would never be a big business. Fortunately, they were dead wrong, but we didn't feel so confident at the time.

I had identified our winning product, but I was late to the game. So what did I do? Did I pick myself up off the floor, dust myself off, and power ahead? Not really. My team and I still had total faith in our concept, but the reality of having failed before made me nervous to take risks. I didn't have the confidence to push my investors to support the idea and decided to essentially bootstrap the business, which worked, but cost us precious time. The business succeeded and the rest is history 13 years later, but we would be three times the size we are now had I been stronger.

Failure is a great teacher, but it's painful and rattles our confidence big time. Who wouldn't be "gun-shy" after the kind of failure Papas describes, especially one (or two) in which investors' money was lost?

And this is the amazing point. Logically, it doesn't make sense to keep going. It would be easier and safer to go in another direction. But entrepreneurs don't think logically at this point. They have, or have built, an irrational self-confidence that allows them to jump back into the fray, maybe to succeed this time, or maybe to fail again. And thank God for the people who do that. They are kind of heroes, aren't they?

Actress Greta Gerwig reflects on 42 takes of a brief scene in "Frances Ha"

There's a very fun and candid peek into the imperfect world of movie making in the New York Times "Riff" column this week. Actress and screenwriter Greta Gerwig reviewed and commented on the 42 takes she and fellow actor Mickey Sumner made of a scene in the new movie "Frances Ha." A few examples:

Take 5 (2:20 p.m.): Still hunched over. Less angry, more sad. I’m probably just sad for myself, which is a terrible trap for an actor to fall into. I can tell that Noah [Baumbach, the director] is not thrilled with what we’re getting. He hasn’t said anything yet — no “Good take” or “Mark that one” to let me know that I’m on the right track.

Take 24 (3:15 p.m.): I overarticulate some of the words. I emphasize the “me” too much in the way I say “Don’t treat me like a three-hour-brunch friend.” It makes it sound as if there is someone we’ve just been interacting with who is the three-hour-brunch friend.

Take 32. (3:34 p.m.): We start, and it’s going fairly well, but the camera “rolls out,” and they have to change the memory card.

Gerwig's piece makes it clear what we know but teach ourselves to forget: a movie isn't something organic, but something crafted out of hundreds of individual pieces, like a mosaic. It's a miracle that a director can sort out these little fragments and create something that feels like an integral work. Moreover, it gives you respect for an actor's performance - the ability to create a person that comes through despite hundreds of line misreadings and camera "rollouts."

See what contemplating mistakes can do?

"The Mistake Bank" in paperback now available

The paper copies of "The Mistake Bank" are here and they look great! If you would like a copy (or copies :), email me at mistakebank (at) caddellinsightgroup (dot) com and I'll let you know how to get one.

Mistake neologism: "Nearling"

At the 99u conference earlier this month, I met Cyriel Kortleven and Ramon Vullings of the 21 Lobsterstreet consultancy in Belgium. In their innovation consulting work, they have found it helpful to coin a new term, nearling, to describe "something new that was done with the right intentions, which has not – yet – led to the right result." This recognizes that the connotation of terms like "mistake" and "failure" may be irreversibly negative - or at least an obstacle to using them productively in our work lives.

It's fun to encounter fellow travelers and I'm happy to have spent some time comparing notes with Cyriel and Ramon. I'm sure we'll continue to share learnings and, who knows, maybe work together in the future. If you are in Europe and looking for some help with creative thinking, look them up.

Read more about it:

 The Mistake Bank: How To Succeed By Forgiving Your Mistakes And Embracing Your Failures

Commencement Speech from Steve Blank: "Playing it safe will get you nowhere"

Steve Blank, frequently mentioned on this site, gave a great commencement address at the University of Minnesota last week. The whole speech is on Steve's blog, and here's a tidbit.

Failure

The downside of starting something new is that’s it’s tough, because unlike the movies – you fail a lot. For every Facebook and Google, thousands never make it.

Like Rocket Science Games, which was my biggest failure. 90 days after showing up on the cover of Wired Magazine I knew the game company where I raised 35 million dollars was headed for disaster.

We’d believed our own press, inhaled our own fumes and built lousy games. Customers voted with their wallets and didn’t buy our products. The company went out of business. Given the press we had garnered, it was a very public failure.

We let our customers, our investors, and our employees down. I thought my career and my life were over. But I learned that in Silicon Valley, honest failure is a badge of experience.

All of you will fail at some time in your career…or in love, or in life.

No one ever sets out to fail.

But being afraid to fail means you’ll be afraid to try. Playing it safe will get you nowhere.

As it turned out, rather than run me out of town, the two venture capital firms that had lost $12 million in my failed startup actually asked me to work with them again.

"Mistake Bank" book tidbit - Chapter 4, "Creating the Culture"

This is from the opening to Chapter 4 of "The Mistake Bank":

In a company, school, government entity, or charitable group, learning from mistakes is more than a personal matter; it’s crucial for the success of the organization itself.

The effect of mistakes is multiplied in an organizational setting, where many people collaborate to achieve an outcome such
as a healthy patient, a completed product, or a resolved complaint. A chain of mistakes can result in disasters, and the communication that is essential for recognizing and interrupting such a chain is more difficult the larger the workgroup is.

So the leader has a crucial responsibility: creating and nurturing a culture where mistakes are acknowledged, shared, and learned from. This means creating a safe environment, encouraging reporting, holding review sessions, and putting learning into practice. It sounds simple but is infrequently done. Leaders make the difference.

Read more about it:

 The Mistake Bank: How To Succeed By Forgiving Your Mistakes And Embracing Your Failures

Golf veteran teaches tour player: embrace random bounces

From a New York Times story profiling the Champions Tour player and PGA Champion Mark Brooks, who has spent this week caddying for tour player J.J. Henry:

Brooks said that he has tried to impress upon Henry that the game’s vagaries — mud balls, tricky winds, bad bounces and the like — are as integral a part of the sport as dimples are to a ball. They are challenges to embrace, not excuses to evoke if the execution proves faulty. 

“One thing I try to get him to do is take responsibility for his shots, really do it, deep down, whatever happens,” Brooks said. “And the second thing is to work on his deficiencies. People want to work on what they’re proficient at. As painful as it is, recognize what your deficiencies are and work on them until they are no longer deficiencies.”

Good lessons here: bad breaks are part of any game. As are good breaks. Embrace them, enjoy them, laugh at them. And work on your weaknesses!

Read more about it:

 The Mistake Bank: How To Succeed By Forgiving Your Mistakes And Embracing Your Failures

Cracking open Nassim Taleb's "Antifragile"

A friend recently recommended "Antifragile: Things That Gain from Disorder." Already, I can see there will be many resonances between the Mistake Bank project and Taleb's book. First off, a definition. Taleb coins the term antifragility to mean something that's the opposite of fragility - beyond robustness or resilience. He writes, "The resilient resists shocks and stays the same; the antifragile gets better.... The antifragile loves randomness and uncertainty, which also means - crucially - a love of errors a certain class of errors." I couldn't have written it better myself.

Here are a few delicious tidbits I've found already. Just in these brief snippets, you can already see that "Antifragile," is a book of philosophy as much as anything else:

In short, the fragilista (medical, economic, social planning) is one who makes you engage in policies and actions, all artificial, in which the benefits are small and visible and the side effects potentially severe and invisible.

Just reading the above passage brought to mind the AIG credit default swap scheme - in which one of the world's largest insurers sold, for nickels and dimes, insurance against a very unlikely event - the mass default of mortgage loans. Of course, when that event occurred, the nickels and dimes were long spent, and the tens of billions of liabilities to be paid would have brought the company toppling down (and perhaps our economy), except for unprecedented financial intervention by the federal government.

Taleb and I also have had similar experiences when writing about a subject that we have found interesting for many years:

I write about probability with my entire soul and my entire experiences in the risk-taking business; I write with my scars, hence my thought is inseparable from autobiography.

Taleb also lays out a table comparing examples of "fragile," "robust," and "antifragile" institutions in politics, business, academics, etc. He describes it thus:

On the left, in the fragile category, the mistakes are rare and large when they occur, hence irreversible; to the right the mistakes are small and benign, even reversible and quickly overcome. They are also rich in information. So a certain system of tinkering and trial and error would have the attributes of antifragility. If you want to become antifragile, put yourself in the situation "loves mistakes" - to the right of "hates mistakes" - by making them numerous and small in harm.

Taleb and I are coming from two different starting points, but ending up in a similar place. Smart mistakes are cheap and informative. Dumb mistakes are costly and keep us in ignorance. I can't wait to keep reading "Antifragile."

In uncertain ventures, the value of a crystal-clear goal

I had the opportunity to attend the 99u Conference in New York last week. It was a blast. The most noteworthy presentation for me was from Sebastian Thrun, the driving force behind Google's self-driving car and Google Glass, and now the founder of online learning provider Udacity. Thrum was awarded the Alva Award, a lifetime-achievement prize for invention.

Many of Thrun's remarks were relevant to our work here. One that really struck me was this: When planning a new, uncertain endeavor, a crisp, clear objective is necessary. Planning the path is unimportant - the path emerges as you work. But a very clear objective allows for a clear assessment of success or failure, and an understanding of how far away you are from your goal.

Here's an example from the Self-Driving Car project. After Thrun's Stanford team had completed the 2007 Darpa Urban Challenge (a very clear objective in itself), Thrun and his team needed a new goal. He had moved to Google, and in collaboration with Google's executives eventually decided on a 1000-mile course all around the Bay Area, covering streets, highways, etc. It was an audacious leap from winning a contest on a closed course to confronting the chaos of real city and suburban driving.

But the goal was clear. Failure was easy to assess - if the car did not complete the entire 1000 miles, that was a failure. This enabled Thrun and his team to use a Build-Fail-Fix-Test-Fail-Fix-etc. approach. This rapid failure-iteration cycle allowed them to very quickly advance in capability for the self-driving car - from finishing a 60-mile course, to the 1000 mile test, to the current state where Google's fleet of self-driving cars tours the Bay Area on a regular basis, covering more than 300,000 miles so far without incident.

Having a clear objective allowed Thrun to focus on planning and executing the next steps, instead of wondering, arguing about, and/or redefining what success meant. This is crucial in an uncertain environment. The objective is reached by taking individual steps, every day, toward the goal, and using failures to help adjust the course toward the objective.

We can use this in our everyday work. When we embark on an uncertain venture - a new job, perhaps, or a new business venture, or a sales campaign - we should aim for a clear, timed measure of success, and share that with people who are helping us. A clear objective will allow the next steps you plan to be headed in the right direction, it will allow you to clearly establish whether you've succeeded or failed, and enable you to intelligently change course when required.

[Photo from GlacierNPS via Flickr Creative Commons]

"Let's get this nightmare over with" - giving, accepting and acting on feedback

One of the interesting mistakes we make is when we presume that other people see the world as we do. This happens all the time, especially when we meet someone new. It's a challenge to listen carefully to them, read their signals, and try to see things, at least a little, as they do. This brief story from Chris McCormick, CEO of LL Bean, via the New York Times, is a perfect example of this situation:

When I met my wife, Beth, in 2007, I invited her to join me in some outdoor activities. We kayaked one day and went on a 30-mile bike trip the next. On a break while biking, I asked if she wanted to return to the house or head in a different direction. I thought that she was enjoying herself, but she said, rather sternly, “Let’s get this nightmare over with.” Now when we bike together, we keep it short — around 15 miles.

As I read this story, I thought: what a great scenario for us to learn from. McCormick asked for feedback. Beth gave it - forthrightly (an understatement), and McCormick took it to heart. All three of these acts are difficult on their own; putting them together is like magic. See what can happen?

Inviting and using feedback is discussed in Chapter 3 of "The Mistake Bank" - and I wish I had seen this story before writing that section!

"The Mistake Bank" errata

Here's where we will keep errata from the book. If you find something incorrect, email me at mistakebank (at) caddellinsightgroup (dot) com and I'll post it here.

Conclusion, first paragraph. Italics error - should say "From Lemons to Lemonade," not "from Lemons to Lemonade."

"The Mistake Bank" is here!

Look to the right side of the page. Yes, after a gestation longer than a blue whale's, "The Mistake Bank: How To Succeed By Forgiving Your Mistakes And Embracing Your Failures
" is here. Available on Amazon.com in Kindle format. We'll announce more formats later, and the hardcopy book is coming as well. Please tell your friends!

Fred Wilson reflects on what TheStreet.com could've been

In his blog A VC, venture capitalist Fred Wilson regularly shares interesting stories as a way of teaching his audience through his experiences and, I believe, learning and embedding the lessons in his own mind. Recently, Fred posted on a dinner he had with Jim Cramer, now a crazed CNBC television host, but at the time a crazed blogging hedge fund manager:

I sat next to Jim Cramer last night at a dinner put on by some mutual friends. I hadn't seen Jim in a while so it was a great opportunity to take a trip down memory lane. In 1996 or early 1997, my prior firm Flatiron Partners led the first round of outside financing for TheStreet.com. I joined the board and eventually became Chairman before stepping down a decade ago. 

When I first met Jim, he was running a hedge fund and blasting posts from his trading desk. This was 1996 and what he was doing was unprecedented. He was publishing in real time his thoughts on what was going on in the markets. On some days, Jim would post three or four dozen times. 

As Jim and I reminisced about those days last night, I said to him "you were tweeting and blogging a decade before anyone else was doing that." He nodded, "yeah, that is what I was doing". 

But we didn't know that. The money our firm invested went to hiring a team of journalists and we saw ourselves as the Wall Street Journal of the web. That was a mistake. The Wall Street Journal is the Wall Street Journal of the web. What Jim was doing was something way more native, way more powerful, and way more important. But we missed it. 

TheStreet.com has gone on to build a niche financial publishing business that is a solid and profitable company. But it could have been the Twitter and Blogger of Wall Street. That's what it was at the start. But we didn't know what we had.

Reed Hastings and Netflix bounce back

We've followed the Netflix/Qwikster mistake story since it broke in 2011. Here's our earlier chronology:

September 19, 2011. Netflix's Reed Hastings: "I messed up" in communicating price increases
October 10. Netflix backs off - a little - from their radical restructuring
October 20. Opposing Views: Netflix restructure - bold embrace of the future or customer debacle?
October 23. Reed Hastings reflects on Qwikster & pricing controversies
April 10, 2012. "Strategy + Business" magazine says "Netflix wasn't all wrong" in its strategic changes (See the tide of opinion beginning to turn?)

If you need a quick recap, here goes. That summer, to capitalize on the growth of streaming media (and, possibly, to hasten the customer transition from the legacy DVD-by-mail business to streaming), the company announced separate pricing for DVD rental and streaming. The total price for customers signed up for one DVD & streaming would rise to $16 per month a 60% increase. Then, in October, Netflix announced that it was splitting its business into two parts - DVD-by-mail (to be renamed Qwikster) and streaming (keeping the Netflix name). Customers would soon have two separate accounts to manage, in addition to paying more.

Fallout was widespread and intense.

Within a week, CEO Reed Hastings said he "messed up" and apologized to customers. Two weeks later, Hastings pulled back on separating out the DVD-by-mail service and ditched the Qwikster name. The price increase, however, stayed.

Last week, eighteen months after Qwikstergate, Netflix announced stellar quarterly growth numbers, basked in rave reviews of its original series "House of Cards" and enjoyed a stock price that was the largest riser among the S&P 500 this year (of course, the stock is still below where it was before Qwikstergate broke).

So, while the crisis did not end up being what the New York Times' James Stewart called a "near death spiral," there is plenty to look back on now. What did Hastings learn from the experience? Here's what he told Stewart:

Mr. Hastings said he realized that the company’s attempt to both raise prices and separate into two companies, one the legacy DVD-by-mail business and the other the up-and-coming broadband streaming business, was trying to do too much too fast....

“[To bounce back from the crisis,] there was amazing pressure to come up with the shiny object that would make everything better,” he said. “But the phrase I used was, ‘There are no shortcuts.’ We weren’t going to find an idea or gesture that would make people love us again overnight. We had to earn their trust by being very steady and disciplined. And we had to be careful because we were on probation. We had to stick to what we do well and not lose confidence. I couldn’t say for sure we’d recover. But I was confident that our best odds were to be very steady and focus on improving the service.”...

With this week’s developments and the stock over $200, “in one sense I can say this is behind us,” Mr. Hastings said. “But it’s like a partially healed bone. It’s still quite fragile. Were we to make a similar mistake, we’d be right back in the penalty box. So we’re not really out of the woods. We’re growing and we’re making good progress, but we’re still not fully back to where we were.”

I am struck by Hastings' combination of humility and confidence. When things were difficult, and people urged him to find a "shiny object" to make everything better, he had confidence that his general strategic direction was correct and kept his patience. Now that growth is returning, he is not bragging - instead, he realizes that "it's still quite fragile."

Meta Friday - a discussion of a MBank post spurs thoughts on revealing mistakes

A discussion started yesterday over at Regretsy Forums, a site where people share gripes with Etsy products, vendors, life in general, and, sometimes, about issues they have with Etsy, the online crafts marketplace. The subject of the discussion ("I know why Etsy screws up so much" - free registration required) was a Mistake Bank post entitled "Etsy CEO on the Three-Armed Sweater Award for Spectacular Mistakes." One of the Chad Dickerson quotes featured from tabby, who started the discussion was this: "We have 100 engineers, and any single engineer can deploy code to the live site at any time. It happens about 30 times a day."

This prompted 26 replies and counter-replies, many of which echoed this theme from whiskeyish:

That's been discussed pretty heavily here before. I sound like a broken record when I say "the ship-it mentality is killing even the established companies, because they run it like a broken-ass startup with no consequences to the end users."

It's a fascinating conversation that to me illuminates two important points:

1) Etsy, assuming they still deploy live code to the site, may want to consider if they've grown too big for this kind of "broken-ass startup" approach to change management (or as Dickerson himself puts it: "embody(ing) the hacker spirit"). A fair number of their users seem to think so.

2) Discussing mistakes openly will subject you to derision. You need fortitude, self-confidence, and the ability to tune out the chatter - without losing important lessons you need to hear, even if unpleasant (see item #1).

Good stuff to think about on a Friday.

Nirmalya Kumar and Nader Tavassoli of London Business School: "Product Failure Is a Moment Of Truth"

This post was written by Nirmalya Kumar and Nader Tavassoli, professors at the London Business School, and originally published on the LBS Business Strategy Review website. Kumar is the co-author of "Private Label Strategy: How to Meet the Store Brand Challenge," among other books. Tavassoli and Kumar wrote this on the day that Toyota announced a recall of 3.4 million cars due to issues with airbags.

Today’s news is compounded by the fact that globally, Honda is recalling 1.13 million cars, Nissan almost 500,000 and Mazda 45,000. The internet has added a new layer of visibility, speed and culpability to mass product failures and ensuing product recalls. You could say that social media can make or break a company in crisis.

Companies need to realise that such crises are about more than simply minimising legal liabilities. The challenge is not to allow a product recall to threaten the entire brand or company. Research indicates that negative news is devastating; on average, the media impact of negative news has quadruple weight when compared with positive news. Intel’s 1994 Pentium microprocessor recall allegedly cost $500m alone. Coca-Cola posted a 21 per cent drop in income linked to its European contamination scare and recall of 17m cases of Coca-Cola from five countries in 1999. Firestone’s Ford-related tyre recall is estimated since 2001 to have wiped out more than half its parent Bridgestone’s profits and dragged down the share prices of both companies. But product recalls need not turn into a brand crisis. They can even be an opportunity to build the brand, provided they are handled appropriately.

A mishandled public response can cause more damage than the problem it addresses in the first place. Remember, Bill Clinton or Three Mile Island? On the other hand, a well-managed corporate response, such as Tylenol’s handling of the terrorist capsule poisoning incident in the early 1980s, can leave the brand even stronger. Similarly, Lexus’s handling of a recall immediately after the launch of the brand in the USA generated tremendous customer goodwill and positive press for the new brand. Our research has identified “four Cs” of product recall management that should guide companies in troubled times: be candid, contrite, compassionate and committed.

Being candid implies addressing the problem openly and head on. Unfortunately, hope often trumps reality. Many companies wish their problems would stay under the radar screen, they stonewall the public, or even worse, issue outright denials. Exxon famously responded with “no comment” in wake of the Valdez oil spill. Merck went as far as instruct its sales force not to disclose information over the Vioxx crisis. Understandably, companies may feel threatened by a deluge of press inquiries, but speed and clarity of response is essential. The media may be converted into an ally, and internally, it is vital to maintain staff morale.

Being contrite starts with assuming responsibility. Johnson & Johnson immediately took responsibility over the tampering with Tylenol, even though it was hardly to blame. In contrast, Exxon confused the issue of taking responsibility with taking blame. The level of contrition expected by the public varies with whether the recall is an outcome of a malicious attack, accident, or an internal quality failure. Of course, culture matters here. After the Japan Airlines crash that claimed 520 lives in 1985, JAL’s chief executive publicly apologised and tendered his resignation. While, ultimately, it is important to ascertain where responsibility for the failure lies, the burning need of the moment is that the company is seen to take responsibility.

Being compassionate requires being personal. Press releases simply will not do. Johnson & Johnson managers were seen weeping on television cameras as they attended victims’ funerals. In contrast, Lawrence Rawl, Exxon’s chairman, waited two weeks after the oil spill to fly to Alaska. Sadly, all too often the only personal attention the affected receive is being ambushed by company lawyers and photographers.

Being committed requires a cross-functional response team with top management and should not be a public relations exercise. This team’s priority should be immediately to assess the source and potential impact of the crisis. Who was hurt? Does it require free servicing, partial recall or total recall? Once the program is announced, how will the company wholly commit itself to making the process as customer friendly and effective as possible? Obviously, preparation helps. A well prepared company goes beyond buying crisis insurance. It has mechanisms, people and policies to help avoid and manage crises. The brand also needs to consider how to get back on its feet. J&J introduced triple tamper-proof seals on its packaging, coupons and deep price cuts to win back the market, and seminars by its sales force to doctors. Goodwill still has to be converted into sales.

The product failure is a moment of truth. A poorly-managed response can unmask a brand promise as a hollow boast. But a well-managed product recall converts the crisis into a chance to demonstrate a company’s regard for its customers. Business as usual rarely offers such opportunities.

It’ll be interesting to see whether these Japanese car firms will seize the opportunity or crack under pressure.

Reposted by permission of the author.

"Celebrate the mistakes that don't happen" - yes, in certain circumstances

We celebrate mistakes in this space, for all sorts of good reasons - to promote learning, empathy, and experimentation. But Heidi Grant Halvorson has a helpful reminder on Harvard Business Review Blog Network that not all mistakes are smart ones ("Celebrate the Mistakes that Don't Happen").

When an organization (or an individual) makes a big, expensive and embarrassing mistake, it attracts loads of attention. But do you know what almost never attracts the attention it deserves? When things go the way they are supposed to. And because of this, roughly half of us — people we call prevention-focused — rarely get the credit we are due.

As I've written about before, prevention-focused people see their goals in terms of what they might lose if they don't succeed. They want to stay safe — to hold on to what they've already got. As a result, they are diligent, accurate, analytical, and go out of their way to avoid mistakes that might derail their success. They excel when it comes to keeping things running smoothly.

Promotion-focused people, on the other hand, see their goals in terms of what they might gain if they succeed — how they might advance or obtain rewards. Their strengths, relative to the prevention-focused, are creativity, innovation, speed, and seizing opportunities — exactly the kinds of qualities that the business community (and our culture as a whole) tends to admire and praise.

But what the story of the Mars Climate Orbiter so compellingly illustrates is that there isn't (or at least wasn't) nearly enough prevention-thinking going on in the NASA labs. It's not really surprising — these people, after all, are rocket scientists. They devote their lives to exploring space — if there is something more promotion-focused than that, I don't know what it is. These folks pretty much own the phrase "going where no one has gone before."

Now, as we know, context is vitally important when determining when a behavior is helpful or harmful. In environments of instability, disruption, or uncertainty, a "prevention focus" can be dangerous - and can have the counterintuitive effect of increasing mistakes, by inhibiting sharing and reporting. But, in environments where precision, standardization and repeatability is paramount, prevention-focused employees are the key.

Physics professor learns the standard way of teaching didn't work - "My teaching caused my students to fail!"

Garr Reynolds, on his Presentation Zen blog, discusses Harvard physics professor Eric Mazur's evolution from straight-up college lecturer to accomplished teacher and authority on student peer learning. Garr's post goes into many facets of Mazur's story, but I want to focus here on just one part - Mazur's taking accountability for his students' failure to learn:

"I thought I was a good teacher until I discovered my students were just memorizing information rather than learning to understand the material," says Mazur. "Who was to blame? The students? The material?" In this presentation below from 2009 entitled "Confessions of a Converted Lecturer," Mazur explains how he came to the conclusion that "It was my teaching that caused students to fail!" If you have the time I recommend that you watch the entire presentation(over one hour in length). However, there is a rough edit of the same presentation that is still fairly good at getting Mazur's key points across in just 18 minutes.Watch the abridged version here on Youtube.



Mazur's sense of agency is notable, especially in education, where failures are easily blamed on students, parents or adminstrators, but the single area that can make all the difference is the approach and methods of a skilled, committed teacher.

Scottish public service organization publishes a template for an effective public apology

Iain Nesbit has pointed out a great template for an effective apology from the Scottish Public Service Ombudsman. Page one (of two) is pictured above. The document is available here in PDF form.

In the Mistake Bank book, we refer to a study showing that acknowledging and apologizing for health-care mistakes significantly reduces lawsuits and hospital legal costs. Of course, that's not the point of an apology, but it is a very valuable side effect - people who believe they are being treated fairly and transparently are more likely to resolve a dispute and less likely to escalate.

And when you need to apologize, use this template. It's excellent.

Entrepreneurs discuss a common side effect of a failing business - "chasing losses"

In a recent New York Times op-ed piece, Kai Ryssdahl, host of NPR's "Marketplace," and Megan Larson, the show's producer, profile several entrepreneurs whose early attempts ended in failure ("Following Your Bliss, Right Off the Cliff"). [Note that the web URL hints at an earlier, more interesting title: "The Painful But Liberating Lessons of a Career Failure."]

One theme of the piece is that failures are often made worse by our tendency to "chase losses" - meaning to stick with a failing proposition for too long and therefore lose more than was necessary. This concept is covered nicely in Tim Harford's book "Adapt: Why Success Always Starts with Failure." Here are a few observations from Ryssdahl and Larson on chasing losses:

But even when the future looked grim, [boutique owner Michelle] Tyree hung on. In fact, she dug in. She bought more inventory for the racks and threw celebrity-fueled parties at the store to generate buzz.

"Your gut says this could be a problem, but your head overrides it because you have just put in this huge investment," she said. "You are hanging on to not just the dream, but you are hanging on to the sweat equity and what you put into it financially."

Human beings, by nature, don't like to turn their backs on what are called "sunk costs," said Craig Fox, who teaches decision-making at the University of California, Los Angeles. When a lot of money is put into something - the dream of a small business, stocks or even an education - and it can't be recovered or is otherwise "sunk," few of us can just walk away....

Back in the '90s, when [Michael Dearing] was fresh out of Harvard Business School, he, too, sank a lot of money into his dream of owning his own store.

The Industrial Shoe Warehouse had five outlets in Los Angeles that sold work boots (think back to the Dr. Martens craze). "It had a vibe of, like, Urban Outfitters - concrete floor, high beam ceilings, all the stock was on the floor," said Mr. Dearing. "We had a really good business for awhile."

But, in the end, he said, "It was what you would call a splat-against-the-wall failure."

Mr. Dearing said the economics of running a shoe store were tougher than expected. Plus, the business grew too fast. Then Mr. Dearing's business partner wanted out.

He struggled to keep the business afloat because, he said, it felt dishonorable to let it go. "I personalized the outcome to a degree that it was unhealthy," he said. "I thought failure was total and permanent - and success stamped me as a worthwhile business person."

I discuss a way of managing the urge to chase losses - the concept of "affordable loss" - in Chapter 5 of the Mistake Bank book. If you're going to put your heart and soul into a project, you would do well to establish and manage to an affordable loss, so that your commitment and ego don't cost you in the event of a failure.

Mistake Bank Bookshelf: "Mistakes That Worked"

This week's selection for the Mistake Bank bookshelf is "Mistakes That Worked," by Charlotte Foltz Jones with illustrations by the New Yorker artist John O'Brien.

I stumbled onto this kids' book as I was thinking about what might be the next book project. "Mistakes That Worked" covers 40 inventions, building projects, place names, and even food products that were shaped by mistakes. It's humorous, yet has powerful lessons for kids who are asked to conform to undifferentiated standards of performance and assessed constantly against them. The lessons apply to their parents and teachers as well.

If your idea doesn't work on a small scale, it won't work on a big scale

Another interesting excerpt from the Adam Bryant interview with Francesca Zambello, producer of the Glimmerglass Festival:

I worked for a French director for a number of years as an associate. The most important thing he ever taught me was that if you don’t make sure the show is right in a small room, it will never be right in a big space, on a big stage.

This little quote contains a lot of things we've covered in this space: the importance of out-of-town tryouts, "small wins," creating safe spaces for failure, etc.

Arts executive's key lesson: How to fail

From the New York Times interview of Francesca Zambello, director of the Glimmerglass Festival. The interview was conducted by Adam Bryant.

Q. Other broad insights you’ve gained over the course of your career?

A. You have to learn how to fail. You have to understand that in any position where you’re at the top, you will fail, and if you don’t fail, you’re probably not that good. So you have to learn how to cope with that. The more you get knocked down, the more you learn how to pick yourself up. It’s like a boxer. In your 20s, you’ll feel devastated when somebody fires you. I’ve been fired a number of times in my life and then rehired by a better company or given a better job. In a way, one of the things I respect the most about businesses is that when they fire somebody, they’re gone the next day. One of the problems you sometimes see in the arts is that they fire leaders but it drags on.

British Power Company apologizes for misselling to consumers

We're in the habit of collecting and sharing corporate apologies here, and last week, there was a big one. After being fined £10.5m by regulator Ofgem, natural gas and electricity supplier SSE posted an apology on the front page of its website (image above) and a longer letter from Ian Marchant, its CEO, on the company blog.

Ofgem described SSE's issues this way:

Customers contacted by SSE were exposed to misleading statements, inaccurate and misleading information on SSE’s charges and misleading comparisons between SSE’s charges and the costs with other suppliers. These failures meant that many customers were unable to make well-informed decisions about whether to switch to SSE and about comparing products in a competitive market, and they were exposed to the risk of choosing a more expensive energy deal. Customers were also told that they could save more money on switching to SSE than was possible.

The SSE apology reads, in part:

The breaches of licence conditions on which the fine is based should never have happened and it is simply not acceptable that they did. Our failings have context – the obligations on energy suppliers were changed significantly and we had a lot to do to change our practices – but there is no excuse; we should have done better.

Today’s announcement is also a clear message for energy companies. Ofgem has been saying for some time that energy suppliers need to transform the way they deal with customers. We agree and we believe that through our Building Trust programme we have led the industry in translating words like fairness, simplicity and transparency into action. We’ve reduced the number of tariffs we offer, we’ve simplified bills, we check that customers are on the best deal for them and we’ve stopped doorstep sales. We've strengthened the compliance processes in our retail business.

The reality is, however, that while SSE has taken a lead on this, Building Trust only started in October 2011 and took a while to implement. However, in many ways it was two years too late. In October 2009, Ofgem introduced new obligations on energy suppliers to make sure sales are conducted in a fair and transparent manner and, frankly, we should have complied with the letter and the spirit of the rules.

We didn’t respond quickly enough to those new obligations and, in particular, we were too slow to recognise that the sales methods sometimes used on doorsteps of potential customers were unacceptable. While SSE was first out of the blocks on this issue, stopping doorstep sales in July 2011, before any other major supplier, we were still much too slow.

This apology has a lot to like, although Marchant leaves the impression that the "Building Trust" program was a proactive step the company took. In fact the Ofgen investigation started in 2010 and Building Trust would certainly have been a response to that investigation. If Building Trust had been launched before the investigation, I would have given SSE much more credit.

[Thanks to Iain Nisbet from www.absolvitor.com (Absolvitor: Scots Law Online) and facebook.com/absolvitor for sharing this story.]