Mistake Bank Bookshelf: "The Logic of Failure"

This week’s selection on the bookshelf is an amazing book I discovered thanks to a tweet from Roxanne Persaud (@commutiny), The Logic Of Failure: Recognizing And Avoiding Error In Complex Situations by Dietrich Dörner. It was published in English in 1995, but is still (apart from a couple of dated references to the difficulty computers have playing world-class chess) amazingly current.

Dörner is professor emeritus of psychology at the University of Bamburg. In the book, he discusses many psychological simulations that illustrate how difficult it is for people to manage in complex environments. In the experiments, subjects are given a complex objective – say, to manage the well-being of an African tribal community by allocating water, seeds, etc. – and the ability to make periodic interventions. Due to the many psychological biases and blind spots we have, this task is very difficult, and very few participants can successfully keep things as good as they had been before the simulation began (many result in the collapse of the society). Participants develop tunnel vision, overcorrect for mistakes, and act before thinking. I have done some of these exercises and have suffered a similar fate. The few successful subjects observe before acting, develop an understanding of the interrelation of the system’s parts, and manage side effects. The average performance in this simulation might be cause to keep us humble about our ability to successfully intervene in the developing world.

One factor complicating the ability to manage complex systems is the time lag between cause and effect that these systems demonstrate. When a change is ordered, the result may not be seen for days/weeks/months, and may even be obscured by other factors. Dörner’s illustration of the difficulty subjects had with a relatively simple task containing such a lag (regulating the temperature in a room by adjusting a dial) will give pause to anyone thinking about proposed technological solutions to manage global warming.

There is a powerful amount of insight in this book. Some examples:

If, the moment something goes wrong, we no longer hold ourselves responsible but push the blame onto others, we guarantee that we remain ignorant of the real reasons for poor decisions, namely, inadequate plans and failure to anticipate the consequences….

This tendency to “oversteer” is characteristic of human interaction with dynamic systems. We let ourselves be guided not by development within the system, that is, by time differentials between sequential stages, but by the situation at each stage. We regulate the situation and not the process….

Clear goals will give us guidelines and criteria for assessing the appropriateness or inappropriateness of measures we might propose.

The Logic of Failure is a wise book with ample lessons. While it points out where our instincts get us into trouble, its point of view is generous and sympathetic. As a companion to Kahneman’s Thinking Fast or Slow or Taleb’s Antifragile, it is highly recommended.

Examining reasons for startup failure within the founder's mind

Tom Eisenmann posts over at Platforms and Networks on founder-related reasons for startup failure. It's a great summary post, with lots of useful links, including lessons from MBank favorites Steve Blank, Mark Suster and Jerry Colonna. Here's a taste:

If entrepreneurial success hinges on a founder’s mastery of psychology, it stands to reason that a founder’s flawed ego is often the root cause of startup failure.

Categorizing causes of entrepreneurial failure is tricky. Asking entrepreneurs why their venture failed doesn’t always yield reliable answers. To bolster our fragile egos, we credit our successes to our own brilliance and skill, and we attribute our failures to the shortcomings of others or to events outside our control. This pattern is so deeply ingrained that psychologists have labeled it the Fundamental Attribution Error.

Furthermore, just as a living organism might die for many reasons—for example, hunger, predation, or illness—startup failure has diverse causes. Paul Graham cites 18 reasons why startups fail; in her post, What Goes Wrong, reprinted in Managing Startups, Graham’s partner at Y Combinator, Jessica Livingston, warns founders that they must navigate a “tunnel full of monsters that kill.”

The post is well worth reading in full.

"Teaming" Day 5: Final Thoughts

This is the last in our weeklong series of posts on "Teaming: How Organizations Learn, Innovate, and Compete in the Knowledge Economy," by Amy Edmondson.

I will wrap up our week by highlighting some of the best quotes in "Teaming." I've added a couple of editorial comments in [square brackets]:

When facing an uncertain path forward, trying something that fails, then figuring our what works instead, is the very essence of good performance. Great performance, however, is trying something that fails, figuring out what works instead, and telling your colleagues all about it - about both the success and the failure. (pp 29-30)

Despite rhetoric to the contrary, many of us still expect ourselves and others to get things right the first time. We view failures as unacceptable. We give directives to those below, and look for direction from supervisors above. (p 40)

When people frame a task as a "performance situation" they are more risk averse and less willing to persist through obstacles than when the same task is framed as a "learning situation." Not only do people adopting a learning frame persist longer in unfamiliar, challenging tasks, but they ultimately learn more as a result. In addition, people with a performance frame engage in less experimentation and innovation and are less likely to formulate new strategies in difficult situations. Instead they're more likely to fall back on ineffective strategies they have used previously. (p 86)

To learn from mistakes and missteps, organizations must employ new and better ways to go beyond lessons that are superficial (procedures weren't followed) or self-serving (the market just wasn't ready for our great new product). This requires jettisoning old cultural beliefs and stereotypical notions of success and replacing them with a new paradigm that recognizes that some failures are inevitable in today's complex work organizations and that successful organizations will be those that catch, correct, and learn from failures quickly. (p 150)

People tend to be more comfortable considering evidence that supports what they believe, denying responsibility for failures, and attributing problems to others. (p 155)

The difference between failures that are truly blameworthy and those that are simply treated as blameworthy reveals a gap between logic and practice. [I would add that it reveals a gap between a person's vision, or what she hopes to be true, and raw reality.] (p 160)

Engineers' or scientists' intuition can be telling them for weeks that a project has fatal flaws, but making the formal decision to call it a failure may be delayed for months. Considerable resources are saved when such projects are stopped in a timely way and people are freed up to explore the next potential innovation. [I've experienced this in business-to-business sales environments. The declaration of a loss can take weeks or months, chewing up resources all the while.] (p 174)

Most of us would prefer to have reliable solutions to the problems we face, and we certainly like to feel that we are good at what we do. But execution-as-learning requires us to accept our individual and collective fallibility. (p 225)

You can find all our posts related to "Teaming" here.