Tuesday, December 27, 2011

Medical Device company CEO: "Too often we choose to believe in an optimistic scenario"

Adam Bryant's Corner Office column in the Sunday New York Times serves up some great lessons drawn from making and thinking about mistakes. Here are some from Mazor Robotics CEO Ori Hadomi, first about creating an environment that encourages people to report mistakes and then tries hard to learn from them:

I believe that it is much more dangerous not to report mistakes than it is to make mistakes in the first place. It’s natural that we make mistakes. The question is, what do we do with these mistakes as an organization? Do we repeat the mistakes? Do we learn from them? Do we investigate them and implement a solution?...

Hadomi also conducts a structured review of the main mistakes made in the past year, used to inform objectives for the coming year. This is something we've advocated and it's great to see a company institutionalize this process:

We have a very structured process of how we communicate and set expectations and define objectives. In general, I believe people perform best when they know where they are heading. I don’t like a culture where people are surprised. I feel that most people want to have some certainty about where they’re heading and where the organization is heading. So we have a process that begins with the management team defining the objectives for next year.

But before we set the objectives we have a tradition where we define the five biggest mistakes we made last year — and we’ll focus on the big ones, not the small ones. And every year we look to see if there is something common among these mistakes. Then we set the objectives for next year.

Q. What are some of the patterns you’ve seen in the mistakes?

A. One of the most obvious mistakes we found is that too often we choose to believe in an optimistic scenario — we think too positively. Positive thinking is important to a certain extent when you want to motivate people, when you want to show them possibilities for the future. But it’s very dangerous when you plan based on that. So one of our takeaways from that was to appoint one of the executive members as a devil’s advocate.

Q. Really?

A. He’s actually very challenging and he knows how to ask the right questions. He really makes sure to say to me, “Let’s be more humble with our assumptions.”

Thursday, December 22, 2011

Those you promote are also role models

Another story from "What to Ask the Person in the Mirror," by Robert Steven Kaplan. This story demonstrates that leader role modeling extends beyond what she does down to the people she picks as lieutenants.
The CEO of a Professional Services firm was in the midst of attempting a strategic repositioning of his company. His objective was to expand the services his company provided and move into new advisory businesses that were adjacent to the company's traditional business. I thought the strategy made a lot of sense and was consistent with the firm's distinctive competencies, and that there was a terrific market opportunity to provide these additional services to the firm's clients.

From my firsthand observations, I believed that this leader was an excellent role model. He not only articulated the central values and vision for the firm, but also was very scrupulous about leading from the front - that is, making sure that his behavior was consistent and exemplified the qualities that he wanted his leaders to exhibit in this firm: commitment to excellence, putting the client's interests first, coaching and mentoring top talent, and establishing an atmosphere of fairness.

Despite these built-in advantages, he was struggling to figure out how to execute the strategic repositioning that he had been advocating. He had personally chosen his senior lieutenants since he had become CEO two years earlier. He himself had always been a superb producer before becoming the firm's leader, and he naturally gravitated toward promoting other producers - that is, people like him - into key senior roles. In other words, when he made promotion decisions, he was willing to overlook shortcomings in his people's leadership skills, coaching skills, and moral compasses because he valued revenue generation far above these other attributes. Initially, this seemed to work; but over time, voluntary turnover among the top-performing quartile of professionals began to increase, and it became more difficult to move professionals between divisions.

I suggested that he ask his head of HR to interview a number of midlevel managers to learn more about the increased turnover. I also suggested that the HR head do exit interviews … to find out the reasons behind the departures. Finally, I suggested that he add some interviews with midlevel managers who hadn't left the company - yet. I agreed to meet with the head of HR first, to debrief what he learned, and then join him for a meeting with the CEO.

The HR head … heard that while the CEO espoused values of fairness and valuing the employee, the division heads he had put in place sent very different signals, indeed. No amount of speeches from the CEO or exemplary behavior on his part could make up for the behavior of his key subordinates. The constant refrain encountered by the HR head was that production is the be-all and end-all at this company. If that wasn't the case, why did the CEO fail to choose subordinates who exhibited the behaviors he was touting? Why did he always go for the producers?

The midlevel employees who had remained with the company were quite cynical about the new strategic initiatives and didn't want to sign up for them. While these new directions might make strategic sense for the company, they involved a substantial degree of risk. In particular, years would have to pass before production in the new businesses reaches the same level as in the existing businesses. And if production was the critical metric - as evidenced by all those promotion decisions - why should someone who was succeeding at an existing position decide to move, and thereby incur a risk? It also emerged that the division heads were actively discouraging key subordinates from moving into these new areas, because losing them might detract from production in their own divisions.

The CEO… was quite disturbed by this feedback. I encouraged him to first actively coach his key subordinates on what he expected of them. He should explicitly expand the criteria for compensation to include factors other than pure production. He should assure people who were transferring to the new areas that he would personally watch over their compensation and career progress. (pp 177-180)

Reprinted by permission of Harvard Business Review Press. Excerpted from "What To Ask The Person In The Mirror: Critical Questions for Becoming a More Effective Leader and Reaching Your Potential," by Robert Steven Kaplan, Copyright (c) 2011 Robert Steven Kaplan; All Rights Reserved.

This leader changed his behavior to be a better role model. Yet he had promoted people like himself, with the same strengths and weaknesses, and when the organization needed to change, these subordinates were the impediment to doing so. Another reason that developing a diverse team is better - you can change more readily when needed.

Wednesday, December 21, 2011

Leaders' actions speak far louder than their words

Here's another story about CEO as role model and the mistakes that can create. It is by Paul Anderson, former CEO of BHP Billiton:

After I spent about a year at BHP Billiton, ...profitability was up, and our efficiency was up; we were getting great productivity. You could look at almost any measure, and it was positive. Except safety. Safety had actually gone down a little bit.

I was very vexed by this, and I kept asking the head of the safety group, "What is it? Why isn't the organization embracing a safety culture, and why can't we seem to improve our safety performance?"

After beating around the bush for a while, he finally blurted it out. He said, "Well, you're the problem."

I said, "I'm the problem? I'm a real proponent of safety; we've got it right in our charter; I can't imagine a higher objective for the company; I can't imagine anything going before it."

He said, "Well, you're a lousy role model - just look at what you're doing."

I replied, "Lousy role model - what do you mean?"

He said, "You know, people notice that when you come to work you jaywalk across the street; you don't go to the corner. People notice that when you're out visiting a plant, if you're wearing dark safety glasses and you come inside, you take off the dark glasses even if you don't have a pair of clear safety glasses to replace them with and you're still in an area where you need them. They notice that when you go up and down steps you don't hold onto the handrail, which is the standard practice we have here. They notice that you don't park your car backward in a parking space which, again, is the safety standard that we have. You're just basically a lousy role model."

Of course, that took me a little aback. But he went on and said, "when you go to visit a manager, the first thing you ask is, 'How are you doing against budget?' You start asking financial questions; you don't start with, 'How is your safety program? What results have you had over the last year? What are your two or three safety issues that you have here?' So, people assume you're not particularly interested in safety. And in fact, they're focusing on everything but safety because you haven't really highlighted it."

That really struck me. I had never been in a situation where I was so clearly scrutinized as a role model and where safety was so important, because this was primarily a mining operation and steel mills, and very much an industrial setting. I realized that not only was I being scrutinized on the job, but also I was being scrutinized off it, too. One of the things that the head of the safety group said was, "People know you don't like to wear a helmet when you ride a motorcycle." And I thought, "Well, what's that got to do with anything?" But if you don't display these values in your personal life, then you obviously don't really embrace the values. It really drove home the point. Somebody once said, "Good leadership is doing the right thing, even when no one's looking." I realized that, actually, somebody is looking....

The key point I got out of that experience was that you are a role model 100 percent of the time. When you're the CEO of a company, you can't separate your personal life from your professional life. People learn what you do in your personal life; they follow what's going on; they watch you in situations where you might even thing you're not being watched. And if you don't walk the talk, they pick that up in a heartbeat. They sense very quickly whether your words and your actions are tied together, and if you don't match your words with your actions, the organization basically discards your words.

Reprinted by permission of Harvard Business Press. Excerpted from Lessons Learned: Straight Talk from the World’s Top Business Leaders--Communicating Clearly. Copyright (c) 2009 Fifty Lessons Limited; All Rights Reserved.

Friday, December 16, 2011

Get promoted, don't change your behavior - a mistake

This story is from "What to Ask the Person in the Mirror," by Robert Steven Kaplan, which discusses how to manage the complexities of senior leadership - not the complexities of business, but those of interpersonal skills, mentoring, communication and role modeling.

The CEO of a large consulting firm wanted advice regarding certain pressing strategy and leadership issues. He had spent thirty years at this company before recently being promoted to CEO. I had known him during my own career in investment banking, and had advised him at various points during his upward career climb. I liked him very much. He was always very bright and insightful. He had a very dry, sometimes off-color sense of humor. He had always been a bit of a cynic, but that was a humorous and generally appealing part of his personality.

The company was very large and - give its size and place in its industry - very high profile. The CEO called me one day and got right to the point. He was off to a "rough start" at the company, he said. First, he had done an in-person meeting with institutional investors and sell-side analysts, and he didn't think it had gone very well. In addition, he wasn't sure he had been approaching his direct reporters and company employees in the right way.... He asked whether, as a favor, I would meet with two or three of his direct reports and ask how they thought he was doing....

What I learned was that these direct reports had been thrilled that he had been named CEO. Having said this, they had expected him to recognize that he needed to behave differently now that he was CEO. The cynicism they used to enjoy now seemed inappropriate, and they wished he would stop it. For example, they didn't want him using the company town hall meetings as an opportunity to make cynical comments. They wanted their own subordinates to be idealistic about the company, and that required the CEO to show he was a "true believer." Even if it was only a role, they told me, they expected him to play it!

There was more - mostly variations on the theme of his new role. They wanted him to drop the off-color jokes, even in private settings. They thought that he needed to get in earlier in the morning. True, he had always been a late arriver - it had been the subject of much friendly banter, over the years - but they believed that because he was now the CEO, his tardiness was sending a bad signal to employees.... They suggested that he should think about driving a less flashy car to work and be a bit more mindful of his dress, even on casual Fridays. In short, they wanted him to look and act like the CEO of a conservative company.

When I sat down with my friend and relayed all of this news to him, he was both amused and perturbed. He explained that, for the past thirty years, he had never gotten any such feedback; now, all of a sudden, everybody had an opinion of how he dressed? He confessed that he thought the comments were off base, even ridiculous - and besides, how was he supposed to change his act at this stage in his life?

We had been friends for several years, so I felt free to talk to him in a fairly blunt way. He had to realize, I said, that he had made a major transition: from a 180-pound senior executive to the 800-pound gorilla the embodied the hopes, dreams, and aspirations of thousands of people. Like it or not, his every move would be closely observed, for the rest of his career. His statements would be parsed internally and externally. His moods would be observed, tracked, interpreted. How he behaved in restaurants, how he talked to the custodial staff, how he dealt with employees across the company - all would be closely scrutinized henceforth for clues to his character.

In short, he had become "role model in chief," and - I told him - this was part and parcel of accepting the job as CEO. Sure, he might feel the same as he did four months earlier, but to everyone around him, he was not the same. His words and actions all had more weight. Yes, he needed to be himself, but he also needed to recalibrate his behavior, taking into account his new weight and strength....

The good news is that, over a period of time, he took all of this feedback on board and eventually became quite comfortable with his new reality. But it definitely required a change in his mind-set.

Reprinted by permission of Harvard Business Review Press. Excerpted from "What To Ask The Person In The Mirror: Critical Questions for Becoming a More Effective Leader and Reaching Your Potential," by Robert Steven Kaplan, Copyright (c) 2011 Robert Steven Kaplan; All Rights Reserved.

I noticed something of this issue in my own experience, when I was hired as a senior executive in a tech company some years ago. I soon learned that the time I arrived in the morning became a subject of discussion around the office. My first reaction was to point out that I was usually the last one to leave except for the night operations team. But the point was that people looked to me as a role model. In this company, people arrived at 8am, and a VP arriving at 8:30 or 8:45 was notable.

The transition from individual contributor and manager causes the same need to recalibrate. You are allowed to criticize management, strategy, direction, etc., when you are an engineer. It's part of the camaraderie of the workplace. But when you are promoted, you are management. The same criticism sends a very different signal - that of disloyalty or lack of commitment. Take it from a cynic!

So, if you like the way you are, and you get moved up into a new level of the organization, prepare to change anyway.

Thursday, December 15, 2011

Learning by experience: "I would not leave until they would teach me what I was doing wrong"

There's a nice little learning story from Daniel Lubetzky, who started KIND, the snack food company. In this Wall Street Journal interview about growing his business, he describes how he learned to sell to grocery store owners and managers:

WSJ: What experience did you have in food manufacturing prior to launching Kind?

Mr. Lubetzky: Kind evolved out of my first company, PeaceWorks, [an importer and manufacturer of Mediterranean spreads] which I started in 1993. At that time, I had no training in the food industry whatsoever. I took my legal briefcase and filled it up with jars of my company's spreads and I would go store by store. They would tell me 'Get out! You have no idea what you're doing.' I would not leave until they would teach me what I was doing wrong.

This says something important about rejection. It's OK to be rejected, or to fail, if you get something out of it. In Lubetzky's case, he got a graduate-level course in retail and selling. If Lubetzky had simply left a store after being told to get out, he wouldn't have learned what to do differently, he wouldn't have had the incentive to keep "learning," and he certainly wouldn't have ended up where he is today.

Friday, December 9, 2011

When something goes wrong, the mistake is "not reacting to the opportunity"

Vibraphonist Stefon Harris, in a TED Talk, discusses how jazz music deals with mistakes. (See video below.) Unexpected events, Harris says, are opportunities - they only become mistakes if we don't react to them. This is a very interesting way of summarizing many of the ideas on this site.

Says Harris, "A mistake, from the perspective of a jazz musician...we don't really see it as a mistake. The only mistake is that I'm not able to perceive what someone else did. Every mistake is an opportunity in jazz." He demonstrates by playing in a certain key and asking the keyboardist to play a note not in that key.

After the wrong note, the band keeps at the same theme, and the note stands out like an unanswered call. "Hello, I'm here, please acknowledge." Nothing. Harris says the mistake was not the note, but that "we didn't react to it. It was an opportunity that was missed."

Then they play again, and the band shifts after the gnarly note comes in. Harris moves the key of the song, the drummer changes tempo. That wrong note sounds right all of a sudden. It sounds like, well, jazz.

A related riff appeared in the Times, which profiled Mr. Boyd E. Dunlop an 85-year-old jazz pianist from Buffalo who was rediscovered in the nursing home he lived in ("An Aging Pianist Finds A New Audience"). Mr. Dunlop's opportunity was to coax some music out of a broken-down old piano:

For years, the donated piano sat upright and unused in a corner of the nursing home’s cafeteria. Now and then someone would wheel or wobble over to pound out broken notes on the broken keys, but those out-of-tune interludes were rare. Day after surrendering day, the flawed piano remained mercifully silent.

Then came a new resident, a musician in his 80s with a touch of forgetfulness named Boyd Lee Dunlop, and he could play a little. Actually, he could play a lot, his bony fingers dancing the mad dance of improvised jazz in a way that evoked a long life’s all....

Mr. Dunlop arrived at the brown-brick nursing home nearly four years ago, a strong-willed but slightly bent half-note. He had 50 cents in his pocket, too much sugar in his blood, and a need to be around others. He liked to sit in the lobby and greet people, especially the women.

After a while, Mr. Dunlop let it be known that he was a musician. This did not distinguish him in a place where someone might claim to be a retired concert violinist or President Obama’s mother, and, in the first case at least, be telling the truth. Also, music here usually meant something to be endured — the weekly sing-along, say, with a resident armed with his own electric keyboard.

The broken cafeteria piano was a tease that Mr. Dunlop could not resist. He played when no one else was around, between meals, early and late. He learned how to dodge the piano’s flaws, how to elongate the good notes and suffocate the bad....

In the spring of 2010, a freelance photographer named Brendan Bannon arrived to discuss an art project with nursing home administrators — and Mr. Dunlop greeted him at the door. Mr. Bannon is balding, so Mr. Dunlop assumed for some reason that he was a doctor. “Hey doc!” he shouted. “Take my temperature.”

A bond quickly developed, and before long Mr. Dunlop invited his new friend to hear him play what he referred to as “that thing they call a piano.” Mr. Bannon, who knows his Mingus from his Monk, could not believe the distinctive, vital music emanating from a tapped-out piano missing a few keys.

“He was a beautiful player,” Mr. Bannon says. “He was making it work even though it was out of tune.”

When all you have is a broken piano, if you want to play, you make it work. We can create mistakes by kicking something off and then not paying attention to how the world reacts around the idea - customers, co-workers, etc. Or, like Harris, and Mr. Dunlop, we can sense and respond - put something out there, then listen, then adjust.

Remember, there are no wrong notes in jazz. So how do we react when life throws things at us that upend our best-laid plans?

Wednesday, December 7, 2011

Charlie Crystle: when it comes to a cash, verify the numbers

Here's a great story from Charlie Crystle, one of the greatest tech entrepreneurs in Central PA (yes, there are some here in Silicon Pasture!). It's from his Digging In blog, essential reading if you're interested in starting a tech business here or anywhere.

Managing cash flow is an important practice to get to know early. It's pretty simple: you have your known ongoing expenses, known revenue (or not), and known investment (or not). You have to manage your cash--the combination of investment and revenue--to cover the expenses on an ongoing basis.

That's why hiring someone early on is such a big commitment. You're asking them to change their lives on your behalf, so you damn well better be able to make payroll.

I blew that in a big way once; I thought I had a certain amount of cash, and knew I had to contract the company to make the cash last, but then I got an email from my right-hand man informing me he had made a mistake--by $200,000. Oops is right. We laid 10 people off the following Tuesday.

Which raises another point: you're the leader, the CEO--you need to verify the numbers. I failed to do that, though my practice prior to that year was to know everything about finances. It was a mistake I still regret today.

[Remember, regret is not necessarily a bad thing.]

Tuesday, December 6, 2011

Tim Berry audio story: leaving a consulting firm to write books

In 2010, I had a long conversation with Palo Alto Software founder (and superb blogger) Tim Berry about mistakes. (The entire discussion can be found here.) He related one story about leaving a comfortable job in a consulting firm for a life as a freelance writer of computer books. Things turned out very differently from his plan, but not in a bad way. A "brilliant mistake," perhaps?

Tim Berry: leaving a consulting firm to write books (mp3 - 4:19) - right-click to download.


One of the dumbest things I did had really good serendipitous results. So I can easily think of a mistake that I deserved to have suffered for but instead it worked out very well.

I left Creative Strategies; the entrepreneurial compensation wasn't enough for me. I really wanted to do more. This was a time - this was 1983 - when Stewart Brand had just won a $100,000 advance for the Whole Earth Catalog. And there I was, having a fancy MBA, I had fallen in love with computers. I built my first computer; I became very computer literate. I could program hex memory. But I had been a journalist; I could also write. The crazy mistake I made was leaving Creative Strategies on purpose in order to write computer books to seek my fortune.

And that was a horrible mistake, because Stewart Brand's $100,000 advance was an aberration; it was a moment in history that didn't repeat itself.

So there I was, with 4 children, a good strong marriage; we are still married, 40 years later, so at least we had that. I had left a high paying job to write these books. (I was on contract for three books which I eventually wrote and got published.)

The mistake turned to a serendipity event. About three months after I left from Creative Strategies, I got a call from the GM of Apple Latin America who had been my best and most favorite client while I was at Creative Strategies. He said, "Tim, I need you to go to Venezuela to do a market study." I can remember this conversation almost exactly as it occurred.

I said, "Hector, I left Creative Strategies. I'm in a home office, writing computer books."

And Hector said, "Tim, don't be an idiot. I never liked paying Creative Strategies for your work. It was just you I was hiring. I'm delighted to just pay you directly. Now seriously, how soon can you get to Venezuela?"

Leaving a good job to write computer books was a stupid mistake that had a very nice end result. And I'm not that dumb, because at that point in the conversation I said, "I'll call you back in five minutes." Then I got on the phone and booked tickets and went off to Venezuela. And in the next 2 weeks, I wrote a market study for Apple Latin America that created an invoice that was more than the total I got for the 3 books I wrote. And I did it in two weeks. I realized that consulting was going to generate the real revenue in the family, whether or not I was a vice president.

So there's a mistake that turned out well.

Monday, December 5, 2011

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.

Friday, December 2, 2011

Cy Young/MVP winner Justin Verlander learns to avoid vanity license plates

A light post for a Friday. This is from Dan Patrick's interview in Sports Illustrated with Justin Verlander, who recently won both the Cy Young Award (best pitcher)and Most Valuable Player Award from Major League Baseball:

JV: The only time I was embarrassed was as a rookie. I still get a lot of grief to this day about this and rightfully so: My dad got me a [car] in high school with a license plate that said BRNGN IT.

DP: You were Nuke LaLoosh from Bull Durham?

JV: Yeah, I was Nuke LaLoosh. I came into the clubhouse with that license plate. We had some veterans who just wore me out about it.

DP: How about CYMVP for your next license plate?

JV: I've learned from my mistakes. I'm not going to have a vanity plate—just typical letters and numbers.

Kathryn Schulz discusses the importance of regret

Kathryn Schulz (author of "Being Wrong: Adventures in the Margin of Error") has a great TED Talk covering regret - why it's painful, and why it's necessary. Knowing that the absence of regret is a trait of psychopaths is one reason why we shouldn't feel too bad when we, you know, feel bad about something we've done. Schulz had a prior talk which we posted on earlier in the year.

Thursday, December 1, 2011

Dan Frommer shares one of his bad predictions

Predictions are fun to make and usually fun to forget. It's so easy to write about what you think will happen, and awkward or painful to look back and compare that to what really took place.

Dan Frommer of the cool SplatF blog took himself to task for an old prediction about how Palm and Flash could create a powerhouse mobile partnership ("The Dumbest Thing I've Ever Written About Flash"). Here's what he wrote in 2007 in Business Insider:

If Palm and Adobe could work together on a stunning user interface and offer the massive community of Flash developers wide-open access to a solid phone platform on good-looking devices, it could be a huge hit.

And here's the November 2011 view (after Palm had been purchased by HP and then set adrift, and Adobe announced that it would no longer develop Flash for mobile):

But it was so impractical! Not just the idea of Palm and Adobe banding together — they actually did try to work together on Flash for WebOS devices, and it still failed. But the idea of Flash working well on a mobile/touch device was so far-fetched in 2007, and is still pretty looney today. And that’s a big reason why Adobe is now winding down mobile Flash development.

Bad predictions are eight for a dollar in the tech world, but a sense of humor and self-reflection, as Frommer practices here, are much rarer commodities.

Wednesday, November 30, 2011

Michael Bloomberg recalls being fired 30 years ago

TechCrunch's "Founder Stories" series recently presented an interview with Mayor Michael Bloomberg of New York City. Mayor Bloomberg is a highly successful tech entrepreneur as well as a 3-term mayor of the Big Apple. He discusses the role of hard work, as well as luck (he mentions luck twice), in his success.

While I was watching the interview, I thought about this quote from Paul Schoemaker: "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." At least three times in the interview Mayor Bloomberg refers to his being fired from Salomon Brothers more than 30 years earlier. In spite of his subsequent triumphs, the occasion of his firing still gnaws at him, still gives him something to prove. Here's the entire interview:

You can find Mayor Bloomberg's story of his firing in this excerpt of "Bloomberg by Bloomberg" from the New York Times.

Monday, November 28, 2011

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

Tuesday, November 22, 2011

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.

Friday, November 18, 2011

Seth Godin: Keep exerting "righteous effort," especially after failing

In "After You've Done Your Best (and It Didn't Work)," Seth Godin writes this:

Early in our careers, we're encouraged to avoid failure, and one way we do that is by building up a set of emotions around failure, emotions we try to avoid, and emotions that we associate with the effort of people who fail. It turns out that this is precisely the opposite of the approach of people who end up succeeding.

If you believe that righteous effort leads to the shame of personal failure, you'll seek to avoid righteous effort.

This is precisely what Carol Dweck finds when she studies people with the "fixed mindset" - setbacks cause their effort to decrease, not increase, because they seek to avoid failure (or give themselves excuses for it), rather than learn from it.

It also sounds quite a bit like what Mona Simpson said of her brother Steve Jobs: "He was never embarrassed about working hard, even if the results were failures."

Thursday, November 17, 2011

Olympus scandal connected to culture of hiding mistakes

Olympus Corp, one of Japan's business titans, has been roiled by a scandal involving overpriced corporate acquisitions intended to provide a cover to write down investment losses carried on the books since the 1980's. NPR's Morning Edition covered the story from Japan, including interviews with Japanese business observers who traced the root of the problem to a failure of governance, and an intense culture of loyalty, in which revealing mistakes was tantamount to dishonoring your predecessors. Some quotes:

"Olympus never came clean on its losses, choosing instead to hide its mistakes with a series of overpriced acquisitions."

"The insider mentality at Olympus is reminiscent of Tokyo Electric Power, whose Fukushima Daichi nuclear plant became the worst nuclear disaster since Chernobyl.... The overriding instinct at such firms is to hide mistakes at all costs. 'The sense that we have to be loyal to our predecessors, that we can't blow the whistle, we can't criticize, because of these bonds of loyalty."

You can listen to the entire story here: "Olympus Scandal Could Hasten Disclosure Changes," NPR Morning Edition, 16 Nov 2011.

Wednesday, November 16, 2011

My article, "Making Big Decisions and Mastering the Consequences," is on the 99% site

The two stories I reference in the article (they came from here, of course!) fall under the category of "brilliant mistakes." You can read the article here.

"Lay it on me": Confronting a negative customer situation

I really like this story from MP Mueller, president of advertising agency Door Number Three, on soliciting feedback from customers, even if it's negative. The story appears in the New York Times "You're the Boss" blog.

Many leaders ignore this kind of feedback, and certainly don't seek it out. Mueller shows how "corrections are more warmhearted than perfections."

I got a call from a fast-growing bank that was looking for a new agency. The bank had been referred to us by another client, who we were told “was singing our praises.” Which was interesting because I distinctly remember a very rough lunch I had had with that client a few years ago.

He had called me one day to say, “We need to talk.” From the tone of his voice, I knew it wasn’t going to be pretty. We met for lunch, and I said, “Lay it on me.” And he did. I listened, took notes, and promised him a response that day. He and I soon discovered that his marketing person had been throwing Door Number 3 under the bus for things she had failed to do.

But listening, acknowledging, giving him a response with solutions and not pointing fingers made a difference. He and I now go to lunch twice a year or so — an unexpected, but sweet, bonus of working on those existing relationships.

Tuesday, November 15, 2011

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

Monday, November 14, 2011

Does thinking about mistakes cause us to wallow in regret?

I wanted to acknowledge the News and Tribune of Jeffersonville, Indiana, and its columnist Terry Stawar. Stawar wrote a column called, "My Favorite Regrets" which covers a number of topics we've pointed to here, such as the Newsweek series My Favorite Mistake, the various Steve Jobs-related stories about failures and decisionmaking, and a reference to yours truly.

Stawar's piece then seizes on regret as a theme, specifically the need not to beat oneself up over past mistakes. He writes:

Regrets are rooted in self-blame. According to the late psychologist Albert Ellis, such feelings result from irrational demands either on the world or ourselves. When we insist that the world be a different place than it really is, or that we be perfect and never make mistakes, we are setting ourselves up for undesirable feelings and behaviors. Since humans are fallible, most of us do the best we can (given what we know at the time) and only hindsight shows that there were better options. Instead of second-guessing ourselves and feeling terrible, Ellis taught that it would be best if people adopted a more rational perspective, which acknowledges disappointment, but eliminates the need to catastrophize.

I agree with this, but I struggled with this piece of advice: "Psychologist Kase says 'Focus on what you want, and what you can do in the current moment, rather than on past mistakes. When you experience regret, you are caught in the past.'"

The best mistake-learners I know are not seized with regret. Rather, when they experience an outcome that they didn't expect, they analyze what happened (especially the parts they can fix) and move forward putting that knowledge to use. Simply moving ahead without thinking about the past is a recipe for delusion and running in place. Worst of all, you risk making the same mistakes over and over again.

Now that's something to regret.

Thursday, November 10, 2011

Poster child for the fixed mindset: David Brent of "The Office"

I love the British "Office" and Ricky Gervais' character is possibly the most outstanding example of the bad manager archetype ever captured. He is constantly looking for affirmation of his knowledge and capabilities. The fact that he lacks these in spades is the basis for much of the comedy on "The Office."

Carol Dweck in her book "Mindset: The New Psychology of Success."describes the concept of the fixed mindset, where you believe that you are defined by your innate traits; one side effect is that you see yourself as superior to others due to your natural gifts:

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.”

With the fixed mindset, failure is anything but a learning opportunity; it's a verdict on your worth as a person. Given that, it's not surprising that people with the fixed mindset crave affirmation and positive feedback, and are often devastated by negative feedback.

With that, I wanted to share a bit of my favorite episode of "The Office," in which David Brent hires a customer service trainer to teach his staff how to improve their customer service. But Brent can't help butting in, disrupting the class and undermining the trainer, to show that he knows more about the subject than the trainer himself. He is looking for more than attention, he's looking for admiration and validation.

When I first watched this episode, I laughed hard over and over. But, at the same time, I had this curious parallel reaction: "Hey, I've been David Brent. I've been in this same situation before and acted the same way. Oh, my...."

Yes, it's true, I am a recovering member of the fixed-mindset club.

Wednesday, November 9, 2011

Jim Marshall's wrong way fumble recovery

I had forgotten about old-time Minnesota Viking Jim Marshall's story until reminded of it in Carol Dweck's book "Mindset: The New Psychology of Success." Here's how Dweck captures the story:

Jim Marshall, former defensive player for the Minnesota Vikings, relates what could easily have made him into a failure. In a game against the San Francisco 49ers, Marshall spotted the football on the ground. He scooped it up and ran for a touchdown as the crowd cheered. But he ran the wrong way. He scored for the wrong team and on national television. It was the most devastating moment of his life. The shame was overpowering. But during halftime, he thought, “If you make a mistake, you got to make it right. I realized I had a choice. I could sit in my misery or I could do something about it."

Marshall played 15 more years, appeared in 4 Super Bowls, and set the record for most fumbles recovered in a career (only one went the wrong way).

Here's the play itself, from 1964:

Tuesday, November 8, 2011

A consultant grows, and grows deeper into debt

Adrianna Gardella of the New York Times writes a terrific series entitled "She Owns It," featuring stories of women entrepreneurs. In a two-part post, she profiles consultant Carissa Reininger, whose struggles with managing growth and cash flow should be required reading for anyone wanting to scale up a people-based business like consulting. Here are a few nuggets from part 1, where Reininger describes how the situation spun out of control:

“I had no start-up capital, no experience, and no real idea what I was doing.” Still, Ms. Reiniger said the company grew quickly and sales rose from $29,000 in 2005 to $1.1 million in 2007 — when cash flow became an issue. “It was literally, money in, money out,” she said. Silver Lining never had a line of credit. Instead, Ms. Reiniger said, “I had a credit card with a $17,000 limit.” She said Silver Lining’s small-business clients had their own cash flow issues, which didn’t help matters.

By late 2006, Ms. Reiniger said, Silver Lining’s financial woes prompted her to start “calling people and making ridiculous deals.” For example, she would request a loan of, say, $50,000 and promise to pay it back in 60 days — at a 20 percent interest rate....

She said she entered a dangerous cycle — borrowing a sum from one person and paying it back, with interest, with a loan from someone else.

Ms. Reiniger said that from 2006 until 2008 she completely ignored the reality of her situation. “Admitting that I didn’t have a grasp on our finances and that I was going into debt every month was not going to support my image,” she said, adding that the company had a “rock star” reputation. But while Silver Lining’s annual revenues were $1 million, the company was spending more than that.

It got to the point where Ms. Reiniger said she couldn’t bear to look at the company’s QuickBooks records.

And here's a bit of Part 2, which covers Silver Lining's recovery:

After two years of trying to ignore her predicament, Ms. Reiniger was forced to acknowledge it. One wake-up call came, she said, from the husband of a creditor who went to Silver Lining’s offices in Edmonton, Canada, and threatened her and her employees. Some shell-shocked employees began to quit, and Ms. Reiniger was forced to lay off others. She was soon down to two employees from a high of 25. In a misguided attempt to grow her way out of debt, Ms. Reiniger had expanded from Silver Lining’s original Toronto office, adding outposts in Vancouver and Edmonton, Canada, and Las Vegas. In 2008, she decided to close all but the Toronto office.

Silver Lining had made its living coaching other small businesses on how to set and reach financial goals. Now, Ms. Reiniger’s own business was struggling to manage its growth. The irony contributed to her reluctance to face her financial problems head-on. She wasn’t sure what to do: “I needed either slower growth or more money,” she said.

Part 2 also includes a great discussion of pivoting a business model and how to regain the trust of creditors.

UPDATE: Here's Part 3 of the story.

Monday, November 7, 2011

Dweck: exceptional people convert setbacks to successes

From Carol Dweck's marvelous book "Mindset: The New Psychology of Success," a summary of her research about the effects of mindset on approaches to learning. Dweck differentiates between people with "fixed mindsets," who feel that intelligence is fixed, and those with "growth mindsets," who believe intelligence can be improved through work and study. Growth-mindset individuals see mistakes and failures as learning opportunities, while fixed-mindsetters see them as negative reflections of their capabilities.

Dweck's work underpins much of the research about learning from mistakes, and has been well-represented on this site.

The other thing exceptional people seem to have is a special talent for converting life’s setbacks into future successes. Creativity researchers concur. In a poll of 143 creativity researchers, there was wide agreement about the number one ingredient in creative achievement. And it was exactly the kind of perseverance and resilience produced by the growth mindset. [p.11]

Saturday, November 5, 2011

From "The Progress Principle": "You can't create a problem-free bubble" - Manage your team through inevitable setbacks

From "The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work," by Teresa Amabile and Steven Kramer.

A manager creates a climate of psychological safety by focusing on the work and what can be learned from it, rather than berating subordinates for errors. More generally... a manager can sustain virtuous cycles of progress and positive inner work life in the face of inevitable setbacks that occur in any complex project. Contrast this to the blame and fear that prevailed throughout Karpenter Corporation. As a member of Karpenter's Domain team said, "Around here, not finding a solution is perceived as not being competent!"

This highlights an important fact. 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. [p. 177]

[Excerpted from "The Progress Principle," by Teresa Amabile and Steven Kramer, Harvard Business Press, (c) 2011. Reprinted by permission.]

Thursday, November 3, 2011

J. Hilburn: Learning lessons from starting a clothing business

In a New York Times article describing how custom clothier J. Hilburn is attempting to move into online sales without alienating its direct sales channel, founders Hil Davis and Veeral Rathod describe some of the mistakes they made when starting up:

[Before starting J. Hilburn,] Mr. Davis and Mr. Rathod knew nothing about the clothing industry. Armed with $650,000 from friends and family, the two opened with the help of four direct-sales representatives whom Mr. Davis's wife had known. While the first representatives found customers, the inexperience of the founders showed.

They chose their first factory, in China, because it had produced two high-quality samples and assured them it could produce more. But after J. Hilburn started ordering in quantity, things did not go so well, a problem worsened by time and language differences.

"We let two shirts be the proof of concept when one of us should have been over there," Mr. Davis said. "Our first 400 shirts came back wrong because we were the idiots who didn't get on a plane to watch over the factory."

They did visit their second factory before selecting it, only to have it fall behind on complicated orders. Each day, they later learned, the needle workers put the most difficult shirts back on the bottom of their pile, delaying delivery. After the partners announced that customers would get a free shirt for every four days an order was late, they received a standing ovation one day in a Dallas restaurant from customers who called them the "free-shirt guys."

They had fabric-buying problems as well; Italian mills were not accustomed to selling quantities as small as of 100 meters.

Mr. Rathod and Mr. Davis had to retrain their entire supply chain in an industry they did not know. Had they known then what they know now, Mr. Davis said, "we could have started this business for 40 cents on the dollar."

But they learned. Sales rose from $1 million in 2008 to $3.25 million in 2009 and $8 million in 2010, a year in which they sold 60,000 shirts (which start at $89). And they built their squad of style advisers to about 1,000 today from the original four.

Wednesday, November 2, 2011

Why do losing sales deals last longer than winners?

An interesting post by Michael Liebow on Selling Power ("To Improve Sales Performance, Fail Faster") says this:

Looking at a knowledge base of deals assembled from a variety of companies and industries and totaling more than 10,000 opportunities, the numbers are striking. Winning deals on average took only 75 days to close, while losing deals took 175 days to close out ― 100 days longer.

We've looked at the idea of "chasing losses" in another post. Rather than quickly cutting losses, we tend to chase them, hoping things will turn around and validate our initial beliefs. In the above study, salespeople and sales managers "chased their losses" twice as long as they pursued wins.

Liebow continues:

This culture of bravado makes cleaning a sales pipe nearly impossible. Yet what can only be described as losing fodder must be cleaned out of the pipe if an organization ever hopes to leverage its investment in the sales process. Thus, the trick to winning is to find a way to allow for a clear quantitative assessment of the pipe and clean it so that your best people across your organization are available to spend precious resources, time, and cycles on the deals with the highest likelihood of winning.

Salespeople, like all of us, need to face problems squarely in order to be successful. Figure out your losing opportunities, and stop working on them. Now.

Monday, October 31, 2011

Steve Jobs: never be embarrassed about working hard, no matter what the result

From Mona Simpson's eulogy for her brother Steve Jobs:

He was never embarrassed about working hard, even if the results were failures. If someone as smart as Steve wasn’t ashamed to admit trying, maybe I didn’t have to be.

Kahneman: "What you see is all there is"

Here's another great excerpt from Nobelist Daniel Kahneman's new book, "Thinking, Fast and Slow," via the New York Times Magazine. Here, Kahneman discusses his Israeli army assignment of assessing leadership candidates on the basis of a group exercise, an assignment that the group learned, to its dismay, did little to predict future leadership success:

Despite our certainty about the potential of individual candidates, our forecasts were largely useless. The evidence was overwhelming. Every few months we had a feedback session in which we could compare our evaluations of future cadets with the judgments of their commanders at the officer-training school. The story was always the same: our ability to predict performance at the school was negligible. Our forecasts were better than blind guesses, but not by much.

We were downcast for a while after receiving the discouraging news. But this was the army. Useful or not, there was a routine to be followed, and there were orders to be obeyed. Another batch of candidates would arrive the next day. We took them to the obstacle field, we faced them with the wall, they lifted the log and within a few minutes we saw their true natures revealed, as clearly as ever. The dismal truth about the quality of our predictions had no effect whatsoever on how we evaluated new candidates and very little effect on the confidence we had in our judgments and predictions.

I thought that what was happening to us was remarkable. The statistical evidence of our failure should have shaken our confidence in our judgments of particular candidates, but it did not. It should also have caused us to moderate our predictions, but it did not. We knew as a general fact that our predictions were little better than random guesses, but we continued to feel and act as if each particular prediction was valid. I was reminded of visual illusions, which remain compelling even when you know that what you see is false. I was so struck by the analogy that I coined a term for our experience: the illusion of validity.
I had discovered my first cognitive fallacy.

Decades later, I can see many of the central themes of my thinking about judgment in that old experience. One of these 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. When you know as little as we did, you should not make extreme predictions like "He will be a star." The stars we saw on the obstacle field were most likely accidental flickers, in which a coincidence of random events - like who was near the wall - largely determined who became a leader. Other events - some of them also random - would determine later success in training and combat.

I see this every day: "We had made up a story from the little we knew but had not way to allow for what we did not know." And leaders are the best creators of stories out of this limited information - whether or not they are true. They are also powerful and persuasive. This is how delusion expands from individuals, to groups, to entire corporations.

Saturday, October 29, 2011

Jonah Lehrer: it's important to find "the upside of error"

Jonah Lehrer takes up our favorite subject in his Wall Street Journal Saturday column ("The Art of Failing Successfully"). He refers to the work of Carol Dweck (of course), and includes this nugget:

The psychologist David Nussbaum has shown that whether we tend to learn from mistakes or brush them aside, the response is rooted in repairing our self-esteem. Failure is never fun, but success requires that we learn to fight through our frustration and find the upside of error.

Lehrer also refers to this Bob Dylan song that contains the lyric, "there's no success like failure, and failure's no success at all." Enigmatic, just like its creator!

Thursday, October 27, 2011

"Corrections are more heartwarming than perfections"

From the terrific "You're the Boss" small business blog on the New York Times website, a quote from restaurant owner Bruce Buschel, reflecting on what he has learned from his first year in operation:

After seeing it firsthand, over and over, I actually believe what I have been preaching, that every misstep is an opportunity to deepen the connection to the guests. Corrections are more heartwarming than perfections.

Wednesday, October 26, 2011

Manolo Blahnik's big error - crepe heels create "strange movements"

This story is from shoe designer Manolo Blahnik, as published in Newsweek's "My Favorite Mistake" series:

The first time I had a major mistake was due to my inexperience. In 1972 I was invited by Ossie Clark, one of the biggest designers on earth, to do this collection at the Royal Court Theatre in London. I made these divine, fabulous heels. I think it was my first shoe, actually. They were royal-blue suede with acid green inside, and a sole made of crepe rubber, which is beautifully white. It’s like walking on snow, but in rubber.

For the heels not to bend, they needed a steel spine inside. I didn’t realize that. So here we are. The fashion show started. Everybody in London was there. It was extraordinary to see all these models coming down the runway. I looked down and saw all the shoes going—boom, boom boom! The heels were moving around and bending. The models were moving in such a strange way. It was movements you’ve never seen before, even in the sirens of Hollywood in the ’40s. I thought, “Oh, my God, this is the end of my career definitely. Tonight, it’s finished.”

It was humiliating for me to see what happened at my first fashion show. But when it ended, people came up to me and said, “Congratulations. This is divine! Those shoes are great. It’s sexy. Blah blah blah.” I didn’t see it that way—I thought it was a horrible thing.

But people loved it. People thought, “How strange. How original.” Mr. Clark was in heaven. Even Cecil Beaton, the English photographer, said to me, “Oh, you do create some strange movements.” And indeed, it was strange. I think they liked it because of the way the girls walked, so insecure and swaying around in the bottoms.

Tuesday, October 25, 2011

Nobelist Daniel Kahneman: "Experts may be in the grip of an illusion"

The field of behavioral economics, basically unknown thirty years ago, has had a profound influence on management, negotiations, marketing and many other fields [sadly, it seems to have had less influence on economics, a subject that sorely needs some shaking up]. The dean of behavioral economics is Daniel Kahneman, recipient of the Nobel Memorial Prize for Economics in 2002 along with Vernon L. Smith.

Behavioral economics upends traditional economic thinking by asserting that people are not rational actors - instead they are composed of biases, blind spots, evolutionary holdovers and other components that get in the way of logical thinking. As a result, we act in ways that seem perfectly sensible to us, but bewilderingly mysterious to others. These defects (or so Mr. Spock would call them) contribute to both our making mistakes and failing to learn from them.

Kahneman has a new book, "Thinking, Fast and Slow," which was excerpted in the New York Times Magazine. In the excerpt, Kahneman relates a story from his long-ago assignment with the Israeli military, in which his team of psychologists were unable to predict leadership qualities based on a field test designed to establish exactly that. Notice below that true expertise involves humility - recognizing mistakes quickly and absorbing those lessons, again and again. [There's a simple name for this process: "experience."]

We often interact with professionals who exercise their judgment with evident confidence, sometimes priding themselves on the power of their intuition. In a world rife with illusions of validity and skill, can we trust them? How do we distinguish the justified confidence of experts from the sincere overconfidence of professionals who do not know they are out of their depth? We can believe an expert who admits uncertainty but cannot take expressions of high confidence at face value. As I first learned on the obstacle field, people come up with coherent stories and confident predictions even when they know little or nothing. Overconfidence arises because people are often blind to their own blindness.

True intuitive expertise is learned from prolonged experience with good feedback on mistakes. You are probably an expert in guessing your spouse's mood from one word on the telephone; chess players find a strong move in a single glance at a complex position; and true legends of instant diagnoses are common among physicians. To know whether you can trust a particular intuitive judgment, there are two questions you should ask: Is the environment in which the judgment is made sufficiently regular to enable predictions from the available evidence? The answer is yes for diagnosticians, no for stock pickers. Do the professionals have an adequate opportunity to learn the cues and the regularities? The answer here depends on the professionals' experience and on the quality and speed with which they discover their mistakes. Anesthesiologists have a better chance to develop intuitions than radiologists do. Many of the professionals we encounter easily pass both tests, and their off-the-cuff judgments deserve to be taken seriously. In general, however, you should not take assertive and confident people at their own evaluation unless you have independent reason to believe that they know what they are talking about. Unfortunately, this advice is difficult to follow: overconfident professionals sincerely believe they have expertise, act as experts and look like experts. You will have to struggle to remind yourself that they may be in the grip of an illusion.

Monday, October 24, 2011

From "The Progress Principle," face mistakes squarely

"The Progress Principle: Using Small Wins to Ignite Joy, Engagement, and Creativity at Work," by Teresa Amabile and Steven Kramer, is the best business book I've read in a long, long time. The authors studied 12,000 diary entries, which tracked hundreds of workers across numerous working groups within several companies, and developed a fascinating and surprising picture of employees' "inner work lives"-- how they perceived themselves, their work, their leadership and companies. The crucial finding is reflected in the book's title: the most significant contributor to a rich and happy inner work life is continual progress (even modest progress) toward goals--the "progress principle."

The book is not about mistakes or learning from mistakes, but our favorite subject makes more than one appearance. Here's a short excerpt:

No matter how skilled people are, or how well designed and well executed the projects, problems and failures are inevitable in complex, creative work. We found that inner work life was much more positive when problems were faced squarely, analyzed, and met with plans to overcome or learn from them. Inner work life faltered when problems were ignored, punished, or handled haphazardly.

Learning from success mattered, too. Our participants' thoughts, feelings, and drives fared better when successes, even small ones, were celebrated and then analyzed for knowledge gained. They fared worse when success was ignored, or when its true value was questioned. [p 106]

Sunday, October 23, 2011

Reed Hastings reflects on Qwikster & pricing controversies

Netflix CEO Reed Hastings has come in for a lot of criticism in 2011. Whether or not you agree with Hastings' strategic moves and tactics around the future of Netflix' DVD-by-mail and movie-streaming businesses, watching the process unfold in public view is a rare and educational experience. In this interview in the New York Times Magazine, Hastings reflects (pretty soon after the fact) on the decisions he made and the fallout that ensued:

You really botched the handling of the DVD spinoff, Qwikster. In your recorded launch announcement, you flubbed your lines. You somehow neglected to secure the Qwikster Twitter handle. Then, facing a backlash from shareholders and consumers, you put the kibosh on the whole idea. Seriously, what’s the deal?
Over the last couple of years, we’ve been moving toward streaming, doing the Starz deal, doing the Xbox deal. We simply moved too quickly, and that’s where you get those missed execution details. It’s causing, as you would expect, an internal reflectiveness. We know that we need to do better going forward. We need to take a few deep breaths and not move quite as quickly. But we also don’t want to overcorrect and start moving stodgily.
Last month, when announcing Qwikster, you apologized for the way Netflix handled its price hikes, writing, “In hindsight I slid into arrogance based upon past success.” But wasn’t introducing Qwikster the way you did the most arrogant move of all? 
No, I think it was just a mistake in underestimating the depth of emotional attachment to Netflix.

Friday, October 21, 2011

Tim Harford describes "chasing losses" and other cognitive processes that impede learning from mistakes

There's a terrific excerpt from Tim Harford's book "Adapt: Why Success Always Starts with Failure" on the Co.Design blog. Harford discusses several traps in learning from mistakes, and uses choreographer Twyla Tharp's experience with her show "Movin' Out" as a frame to discuss how these traps work, and how Tharp avoided them. An excerpt of the excerpt:

The first of those quirks leads to denial. It’s why Sir James Crosby sacked Paul Moore rather than accept his valid critique of the bank, why Joseph Stalin ordered Peter Palchinsky to be killed for his correct analysis of the great Soviet engineering projects, and why Donald Rumsfeld forbade his senior general to use the accurate word “insurgency.” It seems to be the hardest thing in the world to admit that we have made a mistake and to try to put it right....

The second trap our minds set for us is that we chase our losses in an attempt to make them go away. [Editor's note. Anyone who has gambled in a casino knows of this pitfall.] Recall Frank, the luckless contestant on Deal or no Deal: having discarded the box containing half a million euros, he proceeded to reject ever more reasonable offers from the Banker until he ended up with next to nothing. All because, to quote the psychologists Kahneman and Tversky, he had not “made peace with his losses.”...

The final danger Tharp avoided is one we might call “hedonic editing,” borrowing a term coined by Richard Thaler, the behavioral economist behind the book Nudge. While denial is the process of refusing to acknowledge a mistake, and loss-chasing is the process of causing more damage while trying to hastily erase the mistake, hedonic editing is a subtler process of convincing ourselves that the mistake doesn’t matter.

Related posts:
Tim Harford challenges us to "make good mistakes."
Twyla Tharp on the usefulness of failure