Mistake Bank bookshelf: Paul Schoemaker's "Brilliant Mistakes" - mistakes as strategic assets

Kwame recently posted this comment: "No more mistake bank bookshelf? I am a huge fan of your work. supported kickstarter and would like to see more books that focus on mistakes." That was the impetus I needed to restart this segment. I have three mistake books in the reading queue, but for the moment I wanted to reshare a classic in the field, Paul Schoemaker's Brilliant Mistakes: Finding Success on the Far Side of Failure.

Schoemaker's book is a highly strategic look at mistakes. (He and a collaborator, Robert Gunther, originated the concept of "deliberate mistakes," which is to me the most counterintuitive and least-understood concept we've covered here) To Schoemaker, mistakes are tools for understanding the world, learning more quickly, and discovering deep insights.

I've had the opportunity to meet him and his book is a perfect reflection of his keen mind and curious soul. Brilliant Mistakes was my favorite book of 2011, and you should read it too.

From the book: Companies strive for error elimination, hiring advisers and relying on sophisticated management tools such as Six Sigma. It’s little wonder, then, that most decision-making books follow suit, encouraging you to focus narrowly on mistake avoidance today rather than provoking you to plan for the stream of decisions that you will face tomorrow.

Idea to capitalize on mistakes and failure: a "brilliant mistakes" contest

I recently had the opportunity to spend some time with Paul Schoemaker, author of the book "Brilliant Mistakes: Finding Success on the Far Side of Failure" as well as co-author of the HBR Article that was one of the inspirations for this site ("The Wisdom of Deliberate Mistakes," with Robert Gunther). In our discussion I was reminded that, as part of the events surrounding the publication of "Brilliant Mistakes," the Wharton Digital Press created a Brilliant Mistakes contest, which asked entrants to describe "an error that they committed and recognized as a potential source of learning or innovation, and then leveraged as a new concept or idea that helped transform a project or organization."

The winning entry came from Dr. Stephen Salzman of UCLA Medical School, who did a cardiology experiment on athletes and found that his hypothesis was 180 degrees wrong, "forever changing his perspective, not only in the area of adrenaline, but throughout cardiology."

What do you think? Would contests like this within companies help them capitalize on mistakes and failure better? Why or why not?

Not a news flash, but important: negative experiences are more potent than positive ones

In today's New York Times, business writer Alina Tugend (quoted elsewhere on this site) takes up a topic we know well on this site - the potency of negative experiences, and their ability to outweigh seemingly equal positive ones ("Praise Is Fleeting, but Brickbats We Recall"). A key excerpt:

Roy F. Baumeister, a professor of social psychology at Florida State University, captured the idea in the title of a journal article he co-authored in 2001, “Bad Is Stronger Than Good,” which appeared in The Review of General Psychology. “Research over and over again shows this is a basic and wide-ranging principle of psychology,” he said. “It’s in human nature, and there are even signs of it in animals,” in experiments with rats.

As the article, which is a summary of much of the research on the subject, succinctly puts it: “Bad emotions, bad parents and bad feedback have more impact than good ones. Bad impressions and bad stereotypes are quicker to form and more resistant to disconfirmation than good ones.”

Tugend also quotes one of our favorite authors, Teresa Amabile, describing the research that formed the basis for her book The Progress Principle:

“We found that of all the events that could make for a great day at work, the most important was making progress on meaningful work — even a small step forward,” said Professor Amabile.... “A setback, on the other hand, meant the employee felt blocked in some way from making such progress. Setbacks stood out on the worst days at work.”

After analyzing some 12,000 diary entries, Professor Amabile said she found that the negative effect of a setback at work on happiness was more than twice as strong as the positive effect of an event that signaled progress. And the power of a setback to increase frustration is over three times as strong as the power of progress to decrease frustration.

“This applies even to small events,” she said.

Learning from mistakes, missteps, bad experiences, etc., is so powerful because mistakes "make a deep imprint," in the words of Paul Schoemaker. The warm glow of success can cause us, by contrast, to soften and shrug off what we could have learned. Don't we want to use bad experiences to our greatest benefit?

It's not directly mentioned in the article, but I'll add that a sense of humor, especially with respect to oneself, is a significant help when it comes to accepting and learning from negative experiences.

Best Books of the Year 2011

It has been a spectacular year for books about mistakes and learning from them. Here's the list of must-haves:

1. Brilliant Mistakes, Paul Schoemaker. Five years after publishing a terrific HBR article on the subject, Schoemaker celebrates mistakes as, in Joyce's words, "portals of discovery," a way of navigating through a largely unpredictable world. And he presents a compelling case for making "deliberate mistakes"--creating projects that go against the conventional wisdom in a strategic way, in order to uncover invalid assumptions and shifts in the environment. From Schoemaker: Companies strive for error elimination, hiring advisers and relying on sophisticated management tools such as Six Sigma. It’s little wonder, then, that most decision-making books follow suit, encouraging you to focus narrowly on mistake avoidance today rather than provoking you to plan for the stream of decisions that you will face tomorrow.

2. The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work, Teresa Amabile and Steven Kramer. A mammoth research project that tracked the activity and temperament of dozens of workers and managers on a daily basis brought forth a simple, startling insight: workers are happier and more productive when they make continual progress toward meaningful goals, and unhappy/unmotivated when obstacles are put in their way. The application of this insight improves both managers' effectiveness and workers' self-regard. Why is this book on the Mistake Bank list? Because the authors urge managers and workers to face reality, even if it's unpleasant, and handle setbacks with grace and persistence. From the book: By its very nature, meaningful work is hard; people often get the greatest satisfaction from overcoming the most difficult challenges. Failure is inevitable along the path to innovation. Though you should try to minimize obstacles and setbacks under your control, you can never create a problem-free bubble for your people. You can't nourish inner work life if you drive yourself and your team crazy trying to avoid all problems. Rather, focus on providing people with the catalysts and nourishers they need to overcome the obstacles they will inevitably face.

3. Thinking, Fast and Slow, Daniel Kahneman. One of the fathers of behavioral economics and a Nobel Prize winner, Kahneman sums up the lessons he's learned in his decades of studying human nature - and is not above using himself as a subject. Kahneman writes: One of [my] themes is that people who face a difficult question often answer an easier one instead, without realizing it. We were required to predict a soldier's performance in officer training and in combat, but we did so by evaluating his behavior over one hour in an artificial situation. This was a perfect instance of a general rule that I call WYSIATI, "What you see is all there is." We had made up a story from the little we knew but had no way to allow for what we did not know about the individual's future, which was almost everything that would actually matter.

4. Better Under Pressure: How Great Leaders Bring Out the Best in Themselves and Others, Justin Menkes. A book that illustrates what corporate senior leaders need to do to succeed. Menkes describes great executives' understanding of their own fallibility and their willingness to take responsibility for mistakes ("owning their missteps") as keys to flourishing in the pressure-cooker of corporate leadership. From Menkes: Leaders adjusting to a significant increase in responsibility invariably make many mistakes. Those who ultimately excel recognize and own these missteps quickly and use the experiences to grow into their positions of elevated authority and increased complexity. But for this learning curve to occur, it is absolutely crucial that they accept their role in these mistakes. If they have a low sense of agency, they cannot, and will fail.

5. Mindset: The New Psychology of Success, Carol Dweck. I'm cheating here - "Mindset" was published in 2006. But I didn't read it till this year, and without a doubt Dweck's research and writing are among the most influential in the learning field, especially among other academics. She was referenced in more of my reading than any other scholar (Kahneman was #2).

From Dweck: Tom Wolfe, in The Right Stuff, describes the elite military pilots who eagerly embrace the fixed mindset. Having passed one rigorous test after another, they think of themselves as special, as people who were born smarter and braver than other people. But Chuck Yeager, the hero of The Right Stuff, begged to differ. “There is no such thing as a natural-born pilot. Whatever my aptitude or talents, becoming a proficient pilot was hard work, really a lifetime’s learning experience.… The best pilots fly more than the others; that’s why they’re the best.”

What were the best business books you read this year? Weigh in below in the comments section.

Lessons from mistakes "make a deep imprint"

From Paul Schoemaker's "Brilliant Mistakes: Finding Success on the Far Side of Failure":

The school of hard knocks is a great teacher, even if the tuition is very high, precisely because the lessons make such a deep imprint. We need emotion born of direct, difficult experience to internalize, remember, and learn.

(c) 2011 Wharton Digital Press

Thinking about deliberate mistakes

As we prepare for the US Thanksgiving Day holiday, I am thankful for the book I'm reading right now, Paul Schoemaker's "Brilliant Mistakes." Here's a quote (one of many excellent observations in the book):

Companies strive for error elimination, hiring advisers and relying on sophisticated management tools such as Six Sigma. It’s little wonder, then, that most decision-making books follow suit, encouraging you to focus narrowly on mistake avoidance today rather than provoking you to plan for the stream of decisions that you will face tomorrow.

Schoemaker feels so strongly that in complex, dynamic environments (like any business) deep-rooted assumptions are the seeds of decline, he challenges us to make "deliberate mistakes" - violating one of these deeply-held beliefs (in a limited, experimental setting), to measure whether it is still valid.

The idea of deliberate mistakes causes me to think of Cynthia Kurtz's story work. Cynthia was adamant that any observation she made (or that I made) about a project we were doing should be countered with an alternate view. If I thought a set of stories pointed to a positive view of the client, Cynthia would counter, "What would a pessimist say?" And after exploring that for a few minutes, I could equally well make the case that those stories also had an ominous subtext. Evaluating situations in this way began to illuminate their complexity, as jewels that shone differently depending on which facets were held to the light.

I spent many months working with a large wireless carrier, helping them make sense of stories their customers were telling them in customer-service calls. It struck me that many of the leaders, upon hearing of an issue, would very quickly formulate a strong hypothesis about what was going on, without any specific evidence.

In one case, we were trying to investigate a situation where an alarmingly large number of customers, when they were changing their rate plans, were dropping their data packages. The immediate reaction was this: "customer service representatives are not trying hard enough to sell the value of the data packages."

I tended to identify more with the customers, given that I had little history with the company, and saw a few different possibilities. I tried to use Cynthia's approach to add nuance to the problem: "What would your customer service rep think is going on here?" "What is the customer's view of this?"

The managers I worked with on this project - lower- and mid-level managers - were receptive. They could easily place themselves in the shoes of the customer, or the rep. A few alternate hypotheses surfaced quickly: customers might not be getting value out of the data package, and the rate plan change caused them to do this evaluation; customers might have a fixed budget and could not keep the new plan and the package without raising their bill; customers might be looking specifically for ways to lower their bill.

Soon we had six hypotheses that we could test. Yet, on this and other projects, the complex truth had to fight against simple judgments, and it was a hard fight. If the practice of deliberate mistakes could be ingrained in companies like this one, we could spend more time trying stuff out and finding what works instead of arguing our own viewpoints.

Which arguments, at the end of the day, don't matter to the business.

Paul Schoemaker discusses "Brilliant Mistakes"

More than five years after his terrific HBR article (written with Robert Gunther), "The Wisdom of Deliberate Mistakes," Paul Schoemaker of the Wharton School has published a book on the subject. "Brilliant Mistakes: Finding Success on the Far Side of Failure" extends the thinking from the article, and is a great gift to those of us who want to improve how we, as Schoemaker says, "invite mistakes into our lives." One of the key values of mistakes, he states, is to overturn our assumptions and allow us to see reality more clearly.

The Wharton School has posted an interview with Schoemaker on its site (you can see the video below). Knowledge@Wharton is also conducting a "Brilliant Mistakes Contest" if you'd like to share your story.

Here are some choice quotes:

A brilliant mistake is an action you take or a prediction you make that turns out to be wrong. This hurts you initially, but then it also opens up new vistas, and it may result in innovation and discovery. You start to see the world -- or yourself -- differently. For example: You get fired from a job unexpectedly and it prompts a lot of learning. Or you enter a new market or a new technology, and initially, many things don't work out well, but the benefits eventually make that "mistake" more than compensate for its cost....

You have to look at the conditions that favor these brilliant kinds of mistakes. If there is a lot of uncertainty, and the world has changed on you and your old ways of thinking are not quite the right ones, then you have to create more space to discover new approaches....

Very few people want to say they favor mistakes. However, I was also struck [by the fact] that many very successful people have not only a tolerant approach to mistakes, in music or in sports, but they actually embrace them, to some extent. They have an intuitive sense that these mistakes are, as James Joyce put it, "portals of discovery." These are new venues, new avenues for having insights that otherwise you wouldn't get. That's the key: The mistake is an expensive way to get to new insight. But if that is the only way to get to that insight, it may still be worth pursuing.

I've posted my "brilliant mistake" here.

Related post: Benefiting from deliberate mistakes

Benefiting from "deliberate" mistakes

In the June 2006 Harvard Business Review, Paul Schoemaker and Robert Gunther write about ways companies get bound up in their own assumptions, and thereby miss important opportunities for growth or improvement.

Their proposal? Deliberately make a "mistake" by doing something that violates an assumption you hold, to test whether the assumption needs to be altered. (Their article can be found here. Note: you need to be a subscriber to access the full contents online.)

Schoemaker and Gunther cite an example where the Bell System decided to forgo security deposits from some customers their systems had identified as credit risks. This was done in a controlled way, with a small but significant sample size, in order to test their approach to dealing with credit-risky customers. They found that their rules for requiring deposits were too strict, and that many of the customers who otherwise would have not opened an account (because they couldn't afford the up-front deposit) turned out to be reliable payers. Adjusting the processes based on the test added, according to the article, $137 million per year to the Bell System's profits.

Here are some highlights from the article:

Although organizations need to make mistakes in order to improve, they go to great lengths to avoid anything resembling an error. That’s because most companies are designed for optimum performance rather than learning, and mistakes are seen as defects that need to be minimized. Executives, moreover, perceive that flawless execution is what makes them valuable to the organization. In business (with the possible exception of venture capital firms and entrepreneurial start-ups), an executive’s reputation and rewards are typically based on the height of his or her successes, not on the depth of learning from failures.

and

Many managers recognize the value of experimentation, but they usually design experiments to confirm their initial assumptions. An advertising company typically may try different approaches to see which tactics work best but won’t run an ad that it presumes will fail. Experiments of this type aren’t deliberate mistakes. True deliberate mistakes are expected, on the basis of current assumptions, to fail and not be worth the cost of the experiment. According to conventional wisdom, they have a negative expected value. But if such a mistake unexpectedly succeeds, then it has undermined at least one current assumption (and, often, more). That is what creates opportunities for profitable learning.

Have you upended any of your assumptions recently? Perhaps it's time you made a few more mistakes--on purpose.