When we confront a new situation, there’s no way to guarantee immediate success. You will take “wrong actions as a result of inadequate knowledge.” So what kind of steps can you take to ensure your mistakes are smart mistakes, rather than dumb ones?
Rita Gunther McGrath and Ian MacMillan, in their classic Discovery-Driven Growth, emphasize the importance of documenting assumptions and taking steps to validate those along the way. They recommend creating experiments specifically designed to test out parts of a business plan – business model, market size, development estimates, competition, etc. If you were crossing the brook, therefore, you would want to use many senses – sight, hearing, touch – to analyze the situation as you crossed. Are big rocks more stable than small ones? Does a rock move when you first step on it?
3. Order your steps properly. Christian Terwiesch and Karl Ulrich, authors of the book, Innovation Tournaments, demonstrate that in creating a new product or service, the order of operations is crucial to success. Their great counterexample is Segway. Enamored by his technological vision for a self-balancing, easy-to-ride, 2-wheeled scooter, Segway inventor Dean Kamen invested in a full product design, supply chain and even lobbying efforts – before he had thoroughly studied the market or created product demos – relatively cheap and fast activities.
Kamen took the most expensive, most prolonged steps first. When he confidently sprung his product on the marketplace in December 2001, the hype was intense – and only after it died down did he begin to learn about the marketplace. Rather than fulfilling his VC’s prediction of reaching $1 billion in sales faster than any other company, Segway by the mid-2000’s had sold a total of 23,600 scooters – less than $118 million in retail revenue in four years. Segway was a high-profile and expensive failure. ”
Don’t do what Segway did. Do as much work as possible on paper first. Do the cheapest steps that give you the most information (see above steps 1 and 2), and only armed with that information plunge into a long, expensive development process.
And one final type of smart mistake…
Can you imagine a situation in the brook crossing where you would walk in the water, avoiding the stones on purpose? This is a deliberate mistake, an intentional act that defies your internal sense of logic. Why would you do something like this?
Our feelings of what makes sense and what doesn’t are shaped by our deepest assumptions. Those assumptions, for example that walking in dry shoes is more comfortable than in wet shoes, are mostly useful. But some aren’t valid, or have become obsolete over time.
Making what Paul Schoemaker, author of Brilliant Mistakes: Finding Success on the Far Side of Failure, calls “deliberate mistakes” is called for in this situation. In one example Schoemaker cites, AT&T Long Distance challenged its traditional credit-checking standards in a subset of accounts by eliminating credit-checking altogether. (Note that trying the change on a small sample reduced the cost of failure.) Did they think this made sense? No: they had every reason to believe that their long-trusted algorithms worked. But they had no other way of finding out whether their approach to credit-checking was still the best policy they could pursue.
AT&T learned that the increased bad debt that they incurred by approving everybody regardless of credit rating was far outweighed by the increased profit from the new customers who were brought on board. The “mistake” turned out to be the right approach.
What About You?Smart mistakes aren’t blunders; they are well-considered actions that reveal new information or challenge our assumptions. They should be a key part of your creative toolkit. How do you enable smart mistakes in your work?