Thursday, May 30, 2013

Rita Gunther McGrath's "Contract for Intelligent Failure"

Connected with the launch of her book "The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business," Rita Gunther McGrath has published a "Diagnostic Workbook" to identify if your company is ready for the new age of transient competitive advantage. One page in that workbook was a "Contract For Intelligent Failure" - a brief bullet list of criteria to evaluate whether an effort is set up properly to capitalize on failure, if it occurs. There are resonances with the ideas of Sebastian Thrun (in uncertain work, have a very clear objective), and chapter 5 in the book, which covers smart mistakes.

A contract for intelligent failure

  • The effort involves genuine uncertainty
  • The outcome will be decisive because we planned carefully
  • It’s riskier to do nothing - or to conduct further analysis – than to act and fail
  • The cost is small
  • The underlying assumptions are documented in writing
  • There is a plan to test the assumptions
  • The risks of failing are understood and to the extent possible, mitigated
  • The cost is contained
  • Commitments are scaled according to our increasing understanding
  • We’ve defined what success would look like – and the opportunity is significant


(c) 2013 Rita Gunther McGrath. All rights reserved. Used by permission.

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