Tuesday, April 15, 2014

Board member applauds executive for explaining a big mistake

From Adam Bryant's interview with Intuit CEO Brad Smith, in the New York Times Corner Office column. Bryant's latest book is, "Quick and Nimble: Lessons from Leading CEOs on How to Create a Culture of Innovation."

I spent six years in a job prior to Intuit, doing a range of jobs in marketing. I started the Internet division during the dot-com boom. I convinced the board to give us $40 million to sign two e-commerce deals, telling them that we could sell more things online than our sales force could sell. I told them we wouldn’t even need a sales force. After $40 million, we sold just 15 units.

So when I went to meet with the board, I figured that I was going to get fired. I called my parents, and my dad said: “Just go in and say: ‘Here’s what I thought. Here’s what happened. Here’s where I was wrong, and here’s what I would do differently.’ ”

I did that, and when I was finished, one board member started clapping and said: “You know what? You are more valuable to us now for three reasons. The first reason is that you won’t make that mistake again, so we want you to go and make a bunch of new mistakes. The second is that your engineers built a killer product, and now our salespeople have something they can put in their sales bag. And the third is the competition is all trying to convince the street that we’re old school and they’re going to do everything online. You just proved that that’s not likely, so we’re smarter as a result.”

Tuesday, March 25, 2014

A famous publishing brand is established by mistake

From the New York Times obituary of IDC founder Patrick McGovern, about his first publication:

High demand for his database made him realize that he had found a market himself. In 1967, Mr. McGovern conceived of an industry newspaper he intended to call Computer World News. With a computer conference in Boston looming, he and others put together an eight-page prototype in less than two weeks. Then a last-minute problem arose: A typesetter found that in using a type size appropriate for a publication title, he could fit only “Computer” and “World” in the space allowed on the page, and without a space between. And so Computerworld came to life.

Tuesday, March 18, 2014

Tax preparation pioneer Henry Bloch on the value of starting small

Henry Bloch, founder and former CEO of H&R Block, on an early entrepreneurial lesson (from an interview in Entrepreneur Magazine):

Like so many young entrepreneurs, my brother and I made plenty of mistakes. But I can say with a high degree of certainty, we would not have become as successful as we did had we not made those mistakes and learned from them.

For instance, my brother and I asked our great aunt for a gift of $50,000 to start our venture. She ended up doing us a favor -- she turned us down. Instead, she gave us a loan for $5,000. Had she given us $50,000, we would have failed in a big way. We would have hired a staff to implement a business plan that we later learned was flawed. Without much capital at the beginning, we were forced to start small and, fortunately, to fail small.

My brother and I struggled for eight years before we became successful. We learned a tremendous amount in those years, and I wouldn’t trade those years for anything.

Tuesday, February 11, 2014

Help star performers prepare for future setbacks

Today I read a very interesting piece by Sarah Green in the HBR Blog Network. Entitled "Star Performers Need Extra Affirmation After a Setback," it references a study by Jennifer Carson Marr of Georgia Institute of Technology and Stefan Thau of London Business School, which studied baseball players who lost their salary arbitration hearings. The study finds that the performance of star players suffered after the ruling, even though they had plenty of incentive (playing for next year's salary) to succeed. The analogy is that star performers in business can suffer the same pitfall after a career setback, such as a failed project.

The analogy makes sense - business stars don't fail very often, and tend to be showered with praise along the way. An objective failure, therefore, can feel devastating since it's so out of step with the norm.

Green recommends affirmation for star performers and their managers to help them deal with these situations. I'd also add some tough love - before the fact. As part of the career development process, managers should work with stars to expose them to low-risk failure situations - i.e., a small project that faces significant obstacles - to practice managing adversity and resourcefulness. An example would be applying to a conference to do a speech when the organizers are looking for more-senior executive speakers.

If the employee wins the assignment, it's a significant achievement. If she is rejected, the downside is very low, and the lessons of adversity and failure are experiences. When the bigger failure inevitably comes, she will be better prepared to handle it.

Tuesday, February 4, 2014

Late-night emails intimidate CEO's staff

From Adam Bryant's Corner Office series. Bryant's new book is called Quick and Nimble: Lessons from Leading CEOs on How to Create a Culture of Innovation. This story is from Dawn Zier, CEO of NutriSystem.

I had my first child when I was 30, and it was very important for me to have balance. So my idea of balance was that I would go to work during the day, come home, spend time with my child, and then after everybody went to sleep, I would do work. So it was very common for people to get emails from me at 2 or 3 in the morning.

It was just my way of managing my life, but what I didn’t realize is that it freaked everybody out. Somebody said, “Do you really expect us to get back to you at 3:30 in the morning?” I said: “No, I assume that you’re sleeping. I don’t have that expectation at all.” But the feedback I got was that it was disturbing the people that I was managing.

I ended up having a meeting with my team. I’m pretty direct and big on candor, and I had to explain to them that we all need to find our balance. I expect a lot out of you, and you expect a lot out of me. This is just my way of doing my job, and I’m not going to prescribe how you do your job. I don’t expect you to be up all night. After we had a direct conversation about it, everybody was cool with it. So one of my early lessons was really trying to be attuned to things and making sure that you have an open dialogue so things don’t become issues.

We are always looking for more stories to add to the Mistake Bank - especially if you're NOT a CEO. Contact us - mistakebank (at) caddellinsightgroup (dot) com if you have something to share, anonymously or otherwise.

Tuesday, January 28, 2014

A former CFO makes a deal on a handshake - and pays the price

Another story from Adam Bryant's Corner Office series. Bryant's new book is called Quick and Nimble: Lessons from Leading CEOs on How to Create a Culture of Innovation. This story is from Noreen Beaman, CEO of Brinker Capital.

I was about 35 and Brinker’s C.F.O., but I went into sales to get that experience. And I went out and I made a deal on a handshake. Because I was C.F.O. and had been so careful for the 10 years before, the people I worked for thought, “She’ll never do anything foolish.” So of course I did. I closed a big deal on a handshake, and it blew up. I should have been fired.

I lost all my political capital at Brinker. I had been there for more than 12 years, and now I was in the penalty box. But I worked really hard at sales and became the No. 1 salesperson — only because I worked hard, not because I’m a natural salesperson. I had to really dig in and do something I wasn’t good at.

But it made me more accessible to people I worked with. They still joke about it today, though it was 20 years ago. They’ll say, “Oh, remember when you did that?” And I’ll say, “Yes, I remember when I did that.” It made me have more humility.

Thursday, January 23, 2014

The Amazing Race is all about "mistakes and miscalculations"

This whole race is a comedy of errors... and [winning requires] accepting each others' errors and making up for them later.

Chip & Reichen, outside an airport in India, on The Amazing Race season 4, which they eventually won.

Tuesday, January 21, 2014

Grantland editor acknowledges serious mistakes with transgender story, apologizes

Last week, the sports site Grantland (an excellent site with great writing, by the way) posted a long piece by reporter Caleb Hannan on his search for Dr. V., the mysterious creator of a new-fangled golf putter. The reporter located the inventor and then, to his surprise, discovered that the inventor was a female who had been born male. This added many new layers to the story, including the author outing Dr. V. to one of her investors. Last October, Dr. V. committed suicide.

Reaction to the contents of the piece and the decision to publish it was swift and cutting. (Here's Maria Dahvana Headley, someone quoted in the Mistake Bank book, with a cogent analysis.) Grantland itself, after a few days, ran an essay from Christina Kahrl, an espn.com contributor who is also a director of GLAAD. (ESPN is the parent company of Grantland.) Finally, Bill Simmons, the site's creator and editor-in-chief, discussed Hannan's article and the decisions around publishing it. Simmons acknowledges significant mistakes and apologizes for running the article.

I was originally planning to discuss Simmons' apology in detail as a lesson on decisionmaking, reflection, and atonement. On further reflection, I've concluded that any lessons learned from this mistake, no matter how useful, are trivial compared the life of Dr. V. Our deepest condolences to her family and friends.

New manager learns he needs to let his team communicate

From the Corner Office interview of Girish Novani of eClinicalWorks, in the New York Times. Adam Bryant, who writes the Corner Office columns, has a new book based on that work: Quick and Nimble: Lessons from Leading CEOs on How to Create a Culture of Innovation.

My first role was at Fidelity Investments. I was 27. I had this team of five people, and every one of them went to my boss and told him that I was terrible because I had stifled them from talking to others, and that I only wanted them to tell me what was going on. One person said, “We can’t be on his team.”

I changed pretty much overnight. If people felt that they couldn’t really maneuver as easily as they did before I was a team leader, then I wasn’t doing my job. A team leader should be a coach.

Thursday, January 16, 2014

Author Gary Shteyngart learns a hard lesson about the American culture

Gary Shteyngart, acclaimed author of books such as Absurdistan and Super Sad True Love Story, has just published a memoir with the delightful title Little Failure (the cover picture is perfect). This story from the book discusses his family's encounter with an American tradition soon after their immigration to the US from the Soviet Union in 1979, when the author was seven years old.

An official letter arrives in our mailbox. MR. S. SHITGART, YOU HAVE ALREADY WON $10,000,000.00!!! Sure, our last name is misspelled rather cruelly, but cardstock this thick does not lie, and the letter is from a major American publisher, to wit the Publishers Clearing House. I open the letter with shaking hands, and...a check falls out. 
PAY TO THE ORDER OF S. SHITGART
TEN MILLION AND 00/100 DOLLARS 
Our lives are about to change. I run down the stairs to the courtyard of our apartment complex. "Mama, Papa, we won! We won! My millionery!" We are millionaires!"
"Uspokoisya," my father says. Calm down. "Do you want an asthma attack?" But he is nervous and excited himself. Tak, tak. Let us see what we have here....
We sit down and, using our collective four-hundred-word English vocabulary, begin to unravel the many documents before us. If we take the ten-million-dollar check to the bank tomorrow, how long before we can buy a new air conditioner? Wait it says here that... Yes, we have already won the ten million dollars, no disputing that, but a panel of judges still has to award the money to us. First we must fill out the winner's form and select five national magazines that will be sent to us free, or at least the first issue of each will be free, and then the Americans will likely send us the rest of the money. Fair enough.... 
We sign everywhere we need to, even places we probably don't need to. We sign the fucking envelope. "Write neater!" Mama shouts at Papa. "No one can understand your signature!" "Calm yourself, calm yourself." "Get the stamps!" "Wait with your stamps already, what does it say. No postadzh necessary." The Publishers Clearing House has even taken care of that little detail. Classy. ...
We find out the truth quickly and brutally. At their respective workplaces, my parents are told that the Publishers Clearing House regularly sends out the YOU HAVE ALREADY WON TEN MILLION DOLLARS missive and that these are routinely thrown in the trash by the savvy native-born. Depression settles over our nonmillionaire shoulders. In Russia the government was constantly telling us lies - wheat harvest is up, Uzbek baby goats give milk at an all-time high, Soviet crickets sing the "Internationale" in honor of Brezhnev visit to local hayfield - but we cannot imagine that they would lie to our faces like that here in America, the land of the This and the home of the That.

Remember, 2014 is Story Year on the Mistake Bank! If you have a story you'd consider sharing, email us at mistakebank (at) caddellinsightgroup (dot) com and let us know.

Wednesday, January 8, 2014

Taking care of visitors - a sales mistake

Many years ago, I worked on a proposal to sell an information security system to Hong Kong Telecom. I worked for a very large company and the proposal was a joint effort of our Hong Kong team and our telecom experts in the US (I was part of the US team).

After submitting the proposal, we learned that the HKT procurement team would be visiting the finalists for a site visit and product demonstration. We let the team know they should rent a car at Boston Logan Airport, and gave them directions to where our office was. We had a very nice presentation, served a sandwich lunch, and they left.

Within a few days, we learned HKT had eliminated us from contention.

That seemed to be the end of it. But some weeks later, we had a call with one of our internal security leaders. He talked to us about our proposal and solution. It turned out he knew the key executive at HKT because they served on an international security committee together. Soon thereafter, we learned that we had another chance at the business, and were invited to spend a day presenting to the company at their Hong Kong offices.

In Hong Kong, we were met at the airport, driven to our hotel, and our entire week of meals, shopping, etc., had been planned. I had never been treated with such care by strangers before. Our presentation day went flawlessly, and we learned that the executive had invited our whole team to dinner at his club that night.

At dinner, we laughed and drank and ate amazing food. Sometime during the night, he asked me, "Do you know why you were eliminated from contention?"

"No."

"How have you been treated since you've been in Hong Kong?"

And I told him.

"When we came to visit you in Boston, you didn't even arrange our transportation. We had to rent a car and find your office outside town. Do you know we don't even drive here? We were so upset after that visit that we didn't think your company was suitable to supply us with anything. Luckily, your colleague" - the security guy, who was also at the dinner - "called me and asked if we could give you another chance to prove yourself. And so you did. You will be getting the business."

We did not view the HKT team's visit from their perspective, but from ours. For us, renting a car at Logan Airport and driving to Waltham was no problem. We also didn't understand that other countries took hosting visitors very seriously, much moreso than we did in the US. The visit to Hong Kong taught us that. From then on, when customers have shown us the courtesy to pay us a visit at our home office, I've made sure they are taken well care of, as I was all those years ago.

Monday, January 6, 2014

2014 - Story year

Hi, all,

We've been at this effort since 2007. There are more than 500 posts, roughly half stories and the rest on why embracing mistakes and failure is good for you and your business. This year, I am focusing on gathering more stories. There are lots of great stories out there from entrepreneurs and CEOs - but many fewer from customer service reps, programmers, nurses, managers, teachers, students, etc. In other words, ordinary folks. I would like to take this year and focus on gathering and sharing as many mistake stories as possible from this quieter group. I believe their stories have as much or more to teach us than any from Steve Jobs, Steve Martin or AG Lafley. But we won't know till we collect them.

So... if you have a story you'd like to share, anonymously or otherwise, or you know someone with a great story, please contact us at mistakebank (at) caddellinsightgroup (dot) com. I'm hoping to have at least one story a week to share. Join the effort to learn from mistakes!

This week... I'll share one of my stories.

Thursday, January 2, 2014

Managing mistakes in business first means acknowledging they happen

Josh Patrick writes this in the New York Times blog You're the Boss:

Allowing mistakes requires that you trust your employees. You must trust that they are doing the best they can — that they aren’t trying to make mistakes. But here’s the thing: If you don’t allow mistakes, they will happen anyway. They’ll just get swept under the rug. When they are discovered, they have often become much larger problems. 
In larger companies, mistakes rarely put the company at risk. In smaller companies, they can be death blows. That’s why some owners overreact when a mistake happens, which was my inclination when I first started in business. Whenever a mistake was made, I would start screaming at whoever had made it — unless, of course, I had made it. In that case, I would pretend the mistake had never happened. It wasn’t until I learned to accept mistakes and start learning from them that our business started to grow.
 Mistakes will happen anyway. It seens obvious, but very few of us are able to recognize this and act accordingly. Recognizing they will happen anyway is the first premise of building a mistake-learning culture.

Monday, December 30, 2013

Looking for a New Year's Resolution? Start a journaling habit

Starting a new habit is as traditional part of a New Year's celebration as eating black-eyed peas. This year, consider starting a journal. It's a great way to mark accomplishments and things you're grateful for (or things you would rather avoid in the future). I have been keeping an online journal for the past two years and it's been very helpful for finding mistake patterns, as well as logging accomplishments - which is very helpful as you enter the annual review process.
Use paper, a word doc, or my favorite - the 3Minute Journal app (disclaimer: I have been involved in building the app). Plan to set aside a couple of minutes at the end of each weekday (or every day) to write down the most significant event that happened and answer a few questions about it. Within a month or so, you'll have a rich repository of data about yourself that you can use to track your inner work life.
Ask a friend to try it with you!

Thursday, December 19, 2013

Breaking Bad creator describes rejections from networks

From Vince Gilligan, creator of Breaking Bad, on the Rich Eisen podcast, discussing the fact that several networks passed on the show before AMC picked it up.

Then your studio and you have got to find a distributor or a broadcaster. You have to find your AMC. And that was a bit of a process. Getting to AMC involved several "no thank yous" along the way. Which is not atypical. Every movie, every TV show, every book you ever loved, probably all the ones you hated too, even were said "no" to by a half dozen people or more. But all it takes is the one "yes."

Wednesday, December 18, 2013

Starting a business? Dislliking your customers is a crucial mistake

This story is from Steve Blank's post "How Do You Want to Spend the Next 4 Years Of Your Life?," part of his ongoing series of advice to founders:

[As a startup founder,] now that you’ve gotten to know your potential channel and customers, regardless of how much money you’re going to make, will you enjoy working with these customers for the next 3 or 4 years?

One of the largest mistakes in my career was getting this wrong. I used to be in startups where I was dealing with engineers designing our microprocessors or selling supercomputers to research scientists solving really interesting technical problems. But in my next to last company, I got into the video game business.

My customers were 14-year old boys. (see 1:30 in the video) I hated them. It was a lifelong lesson that taught me to never start a business where you hate your customers. It never goes well. You don’t want to talk to them. You don’t want to do Customer Development with them. You just want them to go away. And in my case they did – they didn’t buy anything.

So you and your team need to feel comfortable being in this business with these customers.

The video Steve refers to is below:

Monday, December 16, 2013

The mistake of the glowing hockey puck

In a recent interview, Hank Adams, the CEO of Sportvision, the company behind the yellow first-down line superimposed onto the field during TV broadcasts, discussed the company's first augmented-reality project, the glowing hockey puck. The puck's blue aura was intended to help viewers keep track of the fast-moving object as it slid along the ice. But like many innovations, it was greeted with disdain by the core fan base which was happy with things as they were. Adams spoke to NPR's Audie Cornish about it:

Adams: It glowed, and we actually embedded electronics in the puck. It was such a phenomenon.... It captured popular attention. Some people loved it, some people hated it....

Cornish: Over time, people looked at it unfavorably. By the end of the two year [trial period]...they quit using the puck, and a lot of hockey purists still complain about it.

Adams: They do... for the hardcore hockey fan, they felt that it was over the top. It's something that, if we ever did it again, we'd be a lot more subtle about it, probably do it during replay. We did it in those cases live, during a live broadcast. We'd be a little smarter about how we went about it.

Thursday, December 12, 2013

Negative results are decreasing in scholarly papers

One of the side effects of our fear of mistakes is the discrediting of negative findings. On the few occasions when I played craps in a casino, I noted how poorly the other players at the table reacted when I bet the "don't pass" line - essentially, betting on the dice roller to fail - when the outcome of a roll was perfectly random and the expected payout was no different whether you played pass or don't pass.

The craps example demonstrates how dysfunctional trying to deny the negative is. As Edison said, "[Negative results are] just as valuable to me as positive results. I can never find the thing that does the job best until I find the ones that don't."

Given the above, reading the abstract of this 2012 paper was both unsurprising and somewhat discouraging. Entitled "Negative results are disappearing from most disciplines and countries," by Daniele Fanelli and published in the March 2012 issue of Scientometrics, the paper indicates a significant increase of scholarly papers reporting that their study results supported the stated hypothesis, rather than disproving it:

This study analysed over 4,600 papers published in all disciplines between 1990 and 2007, measuring the frequency of papers that, having declared to have “tested” a hypothesis, reported a positive support for it. The overall frequency of positive supports has grown by over 22% between 1990 and 2007....

Fanelli notes some fascinating cultural differences in reporting negative findings, and included these wise words of warning:

A system that disfavours negative results not only distorts the scientific literature directly, but might also discourage high-risk projects and pressure scientists to fabricate and falsify their data.

Yes indeed.

[Hat tip @Mangan150]

See some prior posts on negative data in research: "Free the Dark Data in Failed Scientific Experiments," "Web site offers scientists access to lessons from failed experiments."

Wednesday, December 11, 2013

Football quarterback relies on a "database" of failed decisions

From Sports Illustrated's Monday Morning Quarterback column. Nick Foles of the Philadelphia Eagles is having a great season, including a remarkable run with no interceptions - but he almost did throw one:

On Sunday, trying to get some insurance for a 24-21 lead with four minutes left, Foles had a 2nd-and-7 at his 34-yard line, and he faced a heavy rush. Instead of throwing it away, Foles floated one down the middle of the field into coverage. Cornerback Patrick Peterson picked it off—and there went the Foles streak. But a late flag came flying, and Tyrann Mathieu was called for holding wideout Jason Avant.

[Translation of above for people who don't follow American football - the quarterback dropped a few steps behind the line of scrimmage and looked to pass. As guys from the other team came close to tackling him for a loss of yardage, he threw the ball inadvisedly down the middle of the field, where there were lots of opposing defenders. One of them caught the ball for an interception. However, the referee called a penalty on another player for holding, and the play was negated and the interception didn't count.]

“Man, horrible throw, horrible decision,” Foles said from Philadelphia an hour after the game. “When I saw the flag and heard the call, I said, ‘Thank you God.’ I learned my lesson there. But that’s what I try to do: I build a database with decisions like that, and I learn from them. If I get that same look [defensive formation] the next time, I’ll make a different throw, or I’ll throw it away.”

Do you have a database for your decisions that don't work out, and what you'll do differently the next time you're faced with the same situation?

Monday, December 9, 2013

Failure guru Amy Edmondson deconstructs the Healthcare.gov fiasco

Amid all the breathless news coverage of the failed rollout of the Obamacare Healthcare.gov website, we now have some genuine analysis, courtesy of one of my heroes, Amy Edmondson of Harvard Business School ("The Mistakes Behind Healthcare.gov Are Probably Lurking In Your Company, Too"). She may be more qualified than anyone to weigh in, given her deep research experience in learning from mistakes and failure in very complex situations (including healthcare). A couple of potent excerpts:

Healthcare.gov is a good example of the importance of learning small and fast, rather than rolling out a risky new product or service launch all at once. Cycling out in phases includes the expectation of early failures – and demands all hands on deck to learn from them along the way. A roll-out, in contrast, implies that something is all set, ready to go — like a carpet. All it needs is a bit of momentum to propel it forward. For complex initiatives, of course, this is simply not the case. Getting people motivated enough to change is not the real challenge; it’s getting them engaged enough to learn — to become part of a discovery process.

and...

Managers must make it clear that they understand that excellent performance does not mean not making mistakes — it means learning quickly from mistakes and sharing the lessons widely.

Thursday, December 5, 2013

Story: don't pretend to be something you're not

This brief story was related by Dolf van den Brink, chief executive of Heineken USA, and was published in Adam Bryant's Corner Office column in the New York Times:


One big mistake I made came from listening to a lot of the advice I heard before I took the job. People told me: “Dolf, you need to be strong. You need to command respect because this is a tough environment.” I was 32, and I probably looked 28, so I tried to behave and look older than I was. After three months I was losing weight, we weren’t getting any traction, and I was drained. My wife said to me: “Just be yourself. Stop pretending.” I started wearing casual clothes and just started being myself.

Wednesday, December 4, 2013

Story: Cultural ignorance leads to "Fruitgate"

Here's a great story about a cultural faux pas from Deb Weidenhammer as presented in the New York Times You're The Boss blog. Weidenhammer is CEO of Auction Systems & Appraisers.

The day before “Fruitgate,” as we now term it in my China office, I hosted a luncheon at a famous restaurant in Shanghai. I invited members of my professional association, including government officials and several high-ranking private sector professionals.

Over a very pleasant lunch, we talked about the differences between business practices in America and China. While there were no breakthroughs, it was a fun few hours of cross-cultural sharing. I left the event feeling secure that I hadn’t made any major mistakes in my hostessing.

When I arrived at the office the following day to prepare for my return to the United States, the Chinese office manager told me that a call had come in from the association’s chairman with the message that I was invited to go fruit picking the next day with several of the other members.

Thinking the invitation a courtesy, I asked the office manager to let the chairman know I would be unable to make the event, as I was returning to America. The message was relayed, and I boarded my flight believing the invitation was evidence of the good job I had done at lunch.

When I returned to the Shanghai office a few weeks after the incident, I learned from my most senior Chinese manager that I had made a grave mistake — perhaps my biggest to date in China. In my Western view, I had a scheduling conflict. I had appointments in the United States and a precious seat on a flight home. An American business executive would have understood.

But in the view of my Chinese contacts — as it has been explained to me several times since — I came off as arrogant, believing myself too important to change my schedule to attend the event. There was clearly no ill will on my part, but perception is reality. I was dead wrong in declining the request....

The damage was done, and I am still paying the price. Since Fruitgate, I have heard tell of my reputation for being conceited and self-important from more than two dozen people who had no firsthand knowledge of the situation. Despite my ongoing efforts to patch things up, I heard yet again about my legendary arrogance just a few weeks ago.

What makes it worse is that I actually would have enjoyed the experience of picking fruit in China’s countryside. My inattention to my guanxi [network] in that single moment will take years to repair.

So here’s my advice: whatever else you do in China, always say yes to fruit picking.

There are several more cultural faux pas stories on the site, including this one from me and a comic story from Josh Neufeld.

Monday, December 2, 2013

Best Books of the Year 2013

Here's my yearly "best of" list. It's been a great year for mistake books, as you can tell by the Bookshelf feature we've done the second half of the year. I'd like to thank everyone who suggested books and ask you to please keep the suggestions coming. As always, these are books I read this year - some were published before 2013.

1.  Antifragile: Things That Gain from Disorder, Nassim Nicholas Taleb. At times long-winded, petty and vindictive, it has also got more vital, energizing ideas in one chapter than most great books contain in their entirety. Read this book, and you will appreciate all the more why economists cannot be trusted with the economy, the many ways in which philosophy trumps science, and the wide applicability of the "turkey problem." (Yes, think Thanksgiving.)






2. The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business, Rita Gunther McGrath. A great synthesis of trends that have been emerging for the past two decades, McGrath demonstrates how many of the core assumptions of Michael Porter-style strategic thinking (industry-based competition, the idea of long-term competitiveness, etc.) are now outmoded, and competitiveness now means the ability to nimbly discover, exploit, and move on from briefer periods of advantage.

3. The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations by Dietrich Dörner. Written and published in the 1990s, this is a terrific and compassionate look at how people are befuddled by complex problems - those with many contributing factors, side effects, and time lags between cause and effect - and how we can learn to manage these problems better. For example, think before you act, make small changes, and carefully track results.

4.  Intuition Pumps And Other Tools for Thinking, Daniel C. Dennett. A huge book with all sorts of tools to help people find their way around intellectual problems. My favorite tool is the first: Making Mistakes.

5. What I Learned Losing a Million Dollars (Columbia Business School Publishing) Jim Paul and Brendan Moynihan. Very few types of work are as rich a source for mistake stories as investing. In this human, funny and compassionate work, Paul recalls his rise in prominence as a commodities investor, and then his rapid fall. In the second half of the book, he dissects his decisions and discusses the psychological factors that helped them go so wrong. [This was one of the many interesting books recommended by Taleb in Antifragile.]





And may I present one more item for your holiday shopping consideration? Contact me at mistakebank (at) caddellinsightgroup (dot) com for bulk pricing on the paper edition.

Thursday, November 28, 2013

Story: Can't anyone here set a thermostat?

Following on from last week's post on Dietrich Dörner's The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations, I had this experience at a client site recently.

The conference room was too warm, so I took off my jacket. Our host went over to adjust the thermostat near the door. Within fifteen minutes the room was too chilly, and on went my jacket again. Then the director came in and adjusted the thermostat up. Ten minutes later it was too warm, and I took my jacket back off. We were in the room two hours and it never settled into a comfortable temperature despite several more readjustments.

The moral is that, as  Dörner pointed out, people have difficulty understanding control situations in which effect lags cause. In this case, the room took a while to cool down after the thermostat was set lower. The host tried to compensate this by moving it down a larger degree, hoping that this would result in faster response, when in fact it resuled in a far cooler room. The director then overcorrected, and the room was too warm. It's good to have a healthy dose of humility when dealing with complex situations. We control much less that we think we do, and the controls we put in place often give us more than we want. Better to watch and wait for a while, and make small, incremental movements.