Tuesday, June 24, 2014

Significant mistakes fail to derail novice olive-grower...and some advice on hiring

From the New York Times article "A Second Career, Happily in the Weeds," about retirees who built new careers in agriculture:

Saundra C. Winokur, 74, acknowledges that she lacked a formal plan when she founded Sandy Oaks Olive Orchard in Elmendorf, Tex., in 1997. “I just threw myself into it and learned on the job, though I probably would have not made as many mistakes as I did had I written a business plan,” Ms. Winokur said. If she had written a business plan, however, she might have become discouraged. “There were no olive orchards at the time in Texas,” she said. “It was thought that it couldn’t be done.”

Ms. Winokur, a native Texan who worked as an elementary-school teacher and earned a doctorate in developmental psychology, traveled extensively to research olive production. She noticed that renowned olive-producing regions — southern Spain, southern Italy and Egypt — “looked a lot like Texas.” In 1997, she bought 276 acres of sandy land, which she describes as “oceanfront property without the ocean.”

She planted 450 trees, but lost about half in the first winter because she had yet to master irrigation. Despite that setback, her business has flourished. In addition to producing olive oil, she owns a nursery and a restaurant. Ms. Winokur has had considerable help along the way. Experienced farmers in the area served as mentors. One neighbor briefed her on the history of her land, which had long been fallow when she bought it.

She later received a $98,000 Agriculture Department Value-Added Producer Grant, which helps farmers create derivative products from crops. Ms. Winokur used the money to market her olive-leaf jelly and hire a chef. The grant “gave me that kick-start I needed to move the business to the next level,” she said.

When she started her orchard, Ms. Winokur could hoist 80-pound bags on her own, but she now must rely on employees to handle strenuous chores. She estimates that it took her 13 years to recruit a “first rate” team and advises new farmers to pay well but hire carefully: “Don’t hire because you’re desperate, the first person who comes through the door. Really take your time.”

Thursday, June 19, 2014

Entrepreneur's key lesson: learn when to "rip off the Band-Aid" and give up

From, "My Biggest Failure? Failing to Recognize Failure," by Robert J. Moore in the New York Times You're the Boss blog:

In pursuit of big dreams, entrepreneurs miss nights out with friends, days on the beach, and even moments with family.

These sacrifices can create strong emotional ties between founders and their visions, making it difficult to let go. The hard truth is that emotional investment in a business is a sunk cost. It cannot be recovered, and using its existence to justify future investments of time is economically irrational. But try telling that to a passionate founder.

I fell victim to that fallacy soon after SmartRaise was started. The data showed that some of my assumptions had been wrong, and the economics of the business simply would not work. Despite my data-driven DNA, however, I hung on for dear life. After all that work, giving up couldn’t possibly be the best move, could it?

I spent weeks waiting for the data to turn in my favor, programming new features and trying out new marketing tactics. I “pivoted” a few times, but these weren’t true pivots, just small tweaks to the already disproved business model. My emotional immaturity trumped my economic logic, dooming SmartRaise to a slower, more painful death than it deserved.

Today, failure comes much more naturally because I concentrate my emotions on the bigger picture. Failures are educational and contribute to a (far away) life goal of becoming a great entrepreneur. This makes it a bit easier to rip off the Band-Aid when necessary.

If you are spending countless hours on a new project, friends and family will naturally ask you about it. After that, every time you see them they will want an update on how it is going. And who can blame them? Entrepreneurship can be exciting.

This pattern, however, can put you in an uncomfortable spot if you end up walking away from an idea. When I shut down SmartRaise, I dreaded seeing all those inquisitive friends — how would I explain that the site was no more?

What I quickly learned, though, was that no one cared nearly as much as I did. I came to realize that all those people asking for updates were not interested in how SmartRaise was doing — they were interested in how I was doing. I was touched, and they were immediately supportive of my new direction.

Wednesday, June 4, 2014

"My Bad!" Skillful research proves you need to own your mistakes to learn from them

There are a number of reasons I've written less on the blog this year. One is that, after more than 5 years of thinking about mistakes and writing the book, I was running out of interesting things to say and observe (it's not an accident that most of the posts this year are stories and not items discussing mistakes and failure).

But another important reason is what has been called the "fetishization of failure." It has just become too trendy and easy to write about how we should all learn from failure, "fail fast and often," etc. etc. Too easy to start conferences on the topic, Twitter feeds, etc.

I believe that most or all of the people who have jumped on the failure bandwagon recently are well-intentioned and wish to raise people's awareness of the values of failure. But the inevitable result has been a watering-down and trivialization of something I consider really important.

And then. And then, scholars with serious credentials in this area like Francesca Gino, Bradley Staats and Christopher Myers publish a paper entitled, "'My Bad!' How Internal Attribution and Ambiguity of Responsibility Affect Learning from Failure" - a deeply-researched, well-written, clearly presented argument on how individuals' ability to learn from failure is directly affected by how they view their responsibility for it.

This isn't a new idea (the book has a section on "owning your mistakes") but rarely have I seen as impressive a discussion of the topic - and new research to boot. Gino et. al. start off with as clear a summary as you can get of previous scholarship on learning from failure. For example:

Learning from failed experiences has been of particular interest as organizations seek to adapt and avoid repeating prior failures (Ingram & Baum, 1997, Kim & Miner, 2007, Madsen & Desai, 2010). Relative to successful experiences, failures have been seen as more effective triggers of individuals’ learning efforts, because they reveal a gap in ability that stimulates efforts to “tweak” existing practices, search for new capabilities, and develop innovative solutions (Sitkin, 1992, March & Simon, 1993, Baum & Dahlin, 2007, Hora & Klassen, 2013). Following traditional theories of individual learning (e.g., Kolb, 1984), failure can be seen as a form of unexpected event (i.e., where actual outcomes differ from expected outcomes; Allwood, 1984) that creates a sense of discomfort that triggers individuals to make sense of it, test hypotheses, and stimulate growth (Louis & Sutton, 1991, Ellis, Mendel, & Nir, 2006). At the same time, by revealing that an existing strategy is unsuccessful, failures encourage broader search for new strategies (i.e., exploration), resulting in enhanced long-term innovation (March, 1991, Audia & Goncalo, 2007). Indeed, after a successful experience, it is more difficult to detect deviations from a plan (Ellis, Mendel, & Nir, 2006), as the successful outcome confirms the validity of a prior routine (Weick, 1984, Sitkin, 1992) and builds confidence (and complacency) regarding its utility for future performance (Weick, Sutcliffe, & Obstfeld, 1999).

Note, first of all, the wealth of citations in the preceding paragraph. Learning from failure, or "unexpected events," which is closer to the definition I use in the book, is not a fad. It is a well-researched, grounded, fact. It is also easy to avoid - "ambiguity of responsibility" gives credence to individuals who wish to distance themselves from failure.

The new research presented is also profound. The authors test four hypotheses, two of which are central to everyone's ideas of learning from failure:

Hypothesis 2: The learning effects of failure are driven by internal attribution of the failed experience. Specifically, internal attribution moderates the effect of failure on learning, such that the effect of failure on learning is more positive when the failure is attributed more internally.

Hypothesis 3: Ambiguity of responsibility decreases internal attribution and learning from failure

The experiments carried out validated both these hypotheses - test subjects who took responsibility for a failure learned more, and situations where responsibility was unclear did not provide as strong a basis for learning from the failure. This is important stuff (and, as the authors suggest, an area where more study is needed).

Go ahead and follow the failure Twitter feeds and attend the conferences if you want, but, if you really want to understand how people learn from mistakes and how to improve the environment for such learning, read "My Bad!"

Monday, June 2, 2014

Cynthia Kurtz's "Working With Stories" is out now.... buy it!

Cynthia Kurtz is one of my favorite people and biggest inspirations. Her deep understanding of the wisdom of people's ordinary stories has informed almost everything I've worked on in the past five years, including this site, the book, and 3-Minute Journal.

So I am delighted to at least modestly repay her kindness by encouraging everyone to buy her newly-released magnum opus, "Working with Stories in Your Community Or Organization: Participatory Narrative Inquiry." I just bought my copy. It discusses everything (I mean everything) you need to know about story-gathering, sensemaking and acting on what you find. It's come a long way from the first 90-page PDF doc that I downloaded in 2008. (A dog-eared, heavily annotated copy of which is still in my "Narrative" file.)