The Magnificent Mistake

When I was doing my MBA a number of years ago, much of the curriculum centered around the infamous case study. In preparation for our career as management professionals, we studied essentially two types of stories: those of how small companies became big, and how big companies acted small in somehow nimbly sidestepping strategic pitfalls.

I recall a few quite vividly. The Southwest Airlines success story was particularly memorable, as I was struck by certain anecdotes that reverberate in my mind to this day. CEO Herb Kelleher had seen the future of airline travel and zigged when everyone else zagged, it seemed. While large airlines were arrayed around hub and spoke routing systems, he flew point to point. While the flag carriers amassed impressive fleets filled with all types of aircraft, he flew only one. As the rest of the industry competed on perks and in-flight goodies, he stripped those out and focused like a laser on rapid turnaround and on-time departures for his flights (without food to clean up, it took less time to prepare the cabin for departure again). He even borrowed the operations expertise of Formula One pit crews to streamline his processes and shave critical minutes off the down-time planes spent on the ground.

He didn't do this all just to be different. These moves were designed to strip away cost and increase efficiency. Point to point travel eliminated the problem of missed connections and the need to re-route passengers. Maintaining a fleet of the same aircraft meant that he only needed to train and equip his repair crews for one model of plane and keep an inventory of fewer parts (since they were interchangeable on every one of his planes). Finally, by adopting F1 efficiencies his airline achieved the shortest turnaround speed in the business, reducing lost time on the ground and increasing the amount of (revenue-generating) flights possible. Within a few years, Kelleher flipped the airline model on its' head and built the regional, low-cost flight category that is the most profitable segment of the market today. To wit, last year the market capitalization of a low-cost European carrier, Ryanair, was at one point higher than that of venerable British Airways.

I remember thinking at the time that Southwest was a logical success to study, if not emulate, as many low-cost airlines have come to since (Ryanair, Easyjet and JetBlue, to name but three). I laughed privately at the idea of an analysis of TransWorld Airlines, the old TWA of our parents' generation. Wouldn't it have been fun to read instead about how that airline figuratively crashed and burned in the space of a few short years? But business school case studies are all about successes and what they can teach us, I quickly realized. Putative MBAs spend much of their first year reverse-engineering growth stories in the belief that they can identify the strategic tipping points for that particular corporation. In essence, we were taught to plumb those companies' trajectories in order to discover the power laws of superior business performance.

It made sense at the time. Knowing what I know now, however, I've come to wish that we had analyzed the likes of TWA instead. We should have focused on failures rather than studied successes.

I'm sure that this sounds a bit counter-intuitive, if not heretical, but hear me out. We have far more to learn from failure than we can glean from success.

For one, successes are often either spontaneous or serendipitous. In contrast, failures are frequently systematic. How many times have you committed the same mistake? It's a particularly cruel tenet of the human condition that we tend to make the same errors over and over. Whether it's something as innocuous as that persistent penchant for going to the net in tennis behind a weak serve, or more ominous activities such as sabotaging your career with antagonistic behaviour at the office, most of us are guilty of repeating both big and small miscues. Those who don't learn from history, they say, are condemned to repeat it; the same can be said of mistakes. To avoid the Sissyphean fate of constantly rolling our personal boulder up a hill only to have it fall down the other side, we owe it to ourselves to identify and ultimately excise that error-prone behaviour. It's more important to analyze and deconstruct errors (in order to avoid them) than try to replicate 'random' successes. As Esther Dyson pithily puts it, "always make new mistakes."

Another reason to focus on failure is that, in some senses, it's easier. It's very hard, if not impossible, to actually 'reverse-engineer' and reproduce winning performances, much as we'd like to. Failures, on the other hand, are simpler to understand.

Finally, it's almost fatally limiting. Focusing solely on successes while ignoring failures is a bit like trying to be profitable while only looking at the revenue side of the balance sheet and ignoring costs; one is, in essence, only attacking half of the problem.

My Dad and I have discussed this issue for many years. As he is in some ways the proto-Pop Philosopher (pun intended), it should come as no surprise that he actually devised a theory and taxonomy of errors (he also, apparently, has lots of time on his hands). His Grand Theory of Errors - to which I've come to subscribe - posits that people make bad decisions most of the time, and that by virtue of this error rate alone we should act vigilantly to avoid miscues. Moreover, he believes, as I do, that most of these mistakes are systematic, not spontaneous, and that there are essentially 4 broad types of errors: diagnostic (for example, a doctor diagnosing the wrong disease from a particular set of symptoms), prognostic (predicting the wrong outcome from an event), strategic (identifying the wrong course of action for a given problem), and executional (not implementing the right course of action).

This analytical approach to errors is actually borne out by a more intuitive understanding of everyday life. It's clear that people make mistakes all of the time. Psychologist Daniel Gilbert, author of Stumbling on Happiness, points out in his book that "the average American moves more than six times, changes jobs more than ten times, and marries more than once, which suggests that most of us are making more than a few poor choices."

We don't really need an author to tell us this is the case; all we have to do is look around our own private worlds to see the evidence. At home and at work, aren't we more commonly surrounded (and suffocated) by failure than inspired by success? Most marriages, sadly, end today in divorce. Over my professional career, I've learned as much, if not more, of what NOT to do than by witnessing positive role models of behaviour and excellence. Isn't that true of most of us? True greatness - in the corporate world as in life - is hard to come by, while mediocrity is rampant. Sadly, I've come into contact with many more execrable managers than excellent ones. As a result, I've tried to tap that far richer vein of flawed executives and the object counter-examples they provide. In life, many of the best lessons come not so much by emulating the rare air of excellence as by avoiding the regular, repeated and routine pattern of other people's errors.

The concept of what I have come to call the Magnificent Mistake is neither new nor original. The Romans understood it when they wrote about a Felix Culpa, which in Latin means a happy error. Millennia later, the expression 'sometimes you win by losing' comes to mind as another plank in the philosophical view that miscues have a sometimes hidden worth. Even more recently, Harvard Business Review posted a podcast extolling the virtues of the 'deliberate mistake' (HBR IdeaCast 4, June 7 2006). Just a short while ago, the venerable New York Times ran an op-ed entitled "The Power of Negative Thinking". In it, guest columnist Atul Gawande extols the virtue of "looking for, and sometimes expecting, failure." He recounts how surgeons at the much-maligned Walter Reed Army Medical Center were able to lower the death rate for wounded soldiers from 25% in the first Persian Gulf War to less than 10% today. How did they accomplish that feat? Not by studying 'successful' trauma centers abroad and transplanting or reverse-engineering their processes. Instead, they "actively looked for failures and how to overcome them." As the author concludes, "negative thinking is unquestionably painful. It involves finding and exposing your inadequacies. That's an unhealthy way to be in large parts of your life; but in running schools or business, in planning war ... negative thinking may be exactly what we need."

Unwittingly, I have come to embrace the mantra of negative thinking. One of the axioms that I live by is the following: learn from your mistakes, then forget about them. Like a Quarterback who just threw an interception, you need to realize why you made the miscue but not obsess over it on the next series of downs. In order to extract excellence out of an error in such a way, however, you need to study it first. Don't shrink away from facing your failures; instead, embrace them as the incredibly valuable learning experiences that they are. Turn those miscues into magnificent mistakes.

The next time you hear a success story, ignore it. Chances are that 'success' was more about chance than conscious choice; moreover, you are unlikely to be able to repeat the combination of moves that led to that fortuitous outcome. Rather, search out examples of massive, abject failures - either in real life or in your life - and try to deconstruct what went wrong and why. By uncovering the root causes of your errors, you can ensure that they won't likely be repeated. As you wean yourself off wrong decisions, you will actually edge ever closer to success - in a way that is more organic (as opposed to reverse-engineered), systematic (as opposed to spontaneous) and sustainable (as opposed to serendipitous).

The perfect definition of the cynical German concept of Schadenfreude comes from de la Rochefoucauld: "it's not enough that I succeed; my friends must also fail." Let me take poetic license and paraphrase it to capture my overarching view on mistakes: it's not necessary for us to succeed, so much as it is critical to avoid failure. Maneuvering through life without making mistakes may actually lead to extraordinary success, and steering clear of errors - especially systematic, repeated and avoidable ones - seems to constitute more than half the battle towards that goal. At the very least, we all ought to aim to break the cycle of recidivism and never make the same mistake. If we can stand to look at our failings coldly and analytically in the face, though, we can only benefit from the opportunity to exorcise the one demon we actually have control over - our own errors. So forget success, and focus on failure; you'll ultimately be glad - and better off - that you did.