Mistake Bank Bookshelf: "Whoever Makes the Most Mistakes Wins"

"Whoever Makes the Most Mistakes Wins: The Paradox of Innovation" by Ralph Farson and Ralph Keyes is our first entry in our "Mistake Bank Bookshelf" series. We'll write a short post on each book that falls into the category of must reads if you are interested in this topic. We'll post this every Friday. Most of the books have been covered in the past, but we will include them here in a simple summary post. You can find them all by clicking on the label "Mistake Bank Bookshelf."


"Whoever Makes the Most Mistakes Wins" is not one we've written about before. It's a slim book, just over 100 pages, and the size made me think of the upcoming Mistake Bank book, which will be about the same size. It's a straightforward business book, focusing both on the psychology of success and failure and its impact on innovation. Women readers alert: there are LOTS of sports analogies, including shout-outs to Vince Lombardi, Bill Russell, Phil Jackson, Michael Jordan, etc., etc.

The book was released in 2002, and I wonder if it didn't do so well in its first release, because it's was rereleased a year later as "The Innovation Paradox: The Success of Failure, the Failure of Success." [Note to self: I hope it wasn't the word Mistake that hurt the book's sales prospects!]

Farson and Keyes do a good job of exploring how success and failure intertwine - how failures enable successes and successes set you up for future failure. I particularly love a brief autobiography they include for a "management consultant" who seems a lot like Farson himself:

Because I didn't receive a single "A" in college, I couldn't get into medical school. Instead, I worked as a lifeguard, but got fired at the end of the summer. My next job, selling advertising in the Yellow Pages, was interrupted by breaking my leg badly while skiing. This gave me three months to think about what to do with my life. Since I'd enjoyed my psychology courses in college, I thought I might try to become a school psychologist. So, I enrolled at UCLA to pick up psychology and education courses, but got kicked out of student teaching because I couldn't get along with my supervisor. Back to lifeguarding. Then I noticed that a prominent psychologist was giving a summer seminar at my alma mater, so I quit my job and enrolled. This experience was electrifying. The psychologist invited me to study with him at the University of Chicago. I was so intimidated by that most serious academic institution, however, that I put off going there for a year. Just before receiving my Ph.D. from Chicago, I was given a one-year fellowship on the Harvard Business School faculty. I left there at the end of the year with almost everyone mad at me.

My other favorite part of the book is the final chapter, entitled, "Samurai Success," in which the authors revisit a paradox of competition. In the greatest, most intense competition, winning and losing loses importance to the exhilaration of performing in the moment. And Japanese samurai, adopting Zen principles, "strived to achieve victory by becoming fully absorbed in a process that would lead them there, not by setting their sights on victory itself."

The lessons are that success has a significant component of subjectivity; that there are reversals along the way, and that the process and daily work is where satisfaction rests.

"Trying to be all things to all people costs you money"

There is a very useful story in the You're the Boss blog in the NY Times today. In it, Josh Patrick explains a dilemma common to small consulting firms and other, as he calls them, "micro-businesses":

If your business doesn’t have enough cash, you will be under stress. That is something I can attest to from first-hand experience. When you don’t have enough cash, you feel pressure to take any client who walks in the door. But this is usually a mistake. Trying to be all things to all people will cost you money.

Most owners understand this. But when you are under pressure to pay your bills, it’s hard to say no — even if the customer is outside of your target market. You need money, you take the business, and you often end up spending an inordinate amount of time serving the customer. And if you stay in this cycle, you put your business at risk. When you own a microbusiness, burning time is just like burning money.

Several years ago, I did some work with a graphic design firm, Gray Cat Studio. Michelle Bisceglia, the owner, had built a knowledge base working with specialty food manufacturers. She knew a great deal about the businesses and what made them successful.

When I first started working with her, she would take work from anyone. She often lost money when she went outside her knowledge area, but like many microbusiness owners, she was often short on cash.

We worked on developing her niche and I coached her in using a new word: No. Over time, two things happened. She was able to charge higher fees because of her expertise, and it took her much less time to complete projects. This allowed her to create a cash cushion, which made it even easier to say no to customers who didn’t fit her profile.

So: mistake is taking any piece of business you can. Solution: create discipline to say "no" to inappropriate customers, raise price to high-value customers, build a cash cushion to deal with the inevitable peaks and valleys of selling. Degree of difficulty: high.

But even though it's difficult, it's vital. There is a similar story in the upcoming Mistake Bank book on this very topic. Stay tuned!

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.

Transcript:

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.

Monica Gould audio story - learning to work with subcontractors

Monica Gould is the president of Strategic Consulting Partners. She discusses bringing on a subcontractor to help with a big project, and how she felt when she saw the sub doing things much differently from how she would have done them herself. This story came from our longer interview with Monica from 2010.

Download the story here (3min 43sec).

Monica Gould audio story - the importance of focus

Monica Gould is the president of Strategic Consulting Partners. In this story, she talks about her early days in consulting, when she fell prey to a common mistake of consultants (I can tell you from experience): the temptation to say you can solve any problem.

Download the story here (1min 57sec).

Transcript:

When I first started my business, I was dabbling, I was trying to make an income and keep abreast of what was going on in the business community. I really didn't think of it as, I was going to grow this consulting firm and make a million dollars a year. It wasn't my intent. So I don't think I had the focus of what services I could provide, why I could provide them, how I'm positioned in the market and why people need to hire me rather than someone else. I didn't really think through that.

Oh, you need some work? I can do that for you. I pretty much did anything anyone wanted me to do. Whether it was my key strength or not.

When you splinter yourself, because you're so hungry and you want the work, and you want to just move forward, you can dilute the quality of your service and dilute what you offer the market.

So what I've really learned to do, especially honing in on this in the last few years, is picking and choosing the opportunities that I go after. Making sure that it is part of the core strategic strength of the firm. That we can do the work. Not necessarily that I could do it, but our firm would have the right people in place. And that I can do the work. Not that I won't stretch, and look for opportunities that would stretch our skillset, but really trying to be strategically focused and not splintered all over the place, not confuse the market in terms of what we do.

Ford Harding learns from a prospect who won't return his calls

Professional Services Sales Consultant Ford Harding, author of "Rain Making," shared a second mistake story.

In this one, he tells us of the profound teachings he received from a prospect who simply wouldn't call him back (right-click to download).

Related Post:
Ford Harding on sharing the good side and bad side with a reporter

Management Consultant Ford Harding - sharing "the good side and bad side" with a reporter.

Professional Services Sales Consultant Ford Harding, author of "Rain Making," was kind enough to share a mistake story for inclusion in The Mistake Bank.

Actually, he shared two. In the first, he relates a story that taught him there can be pitfalls in sharing the good side and bad side of things with a reporter (right-click to download).