Paul Schoemaker is a rigorous thinker who is not afraid to buck conventional wisdom. His book, Brilliant Mistakes, is living proof that he has no fear when it comes to confronting one of the most basic tenets of big business - failure is a career killer.
Mr. Schoemaker earned an MBA and PhD in decision sciences from the Wharton School. He has spent time as a professor - heading a research centre into behavioural economics at the University of Chicago and leading Wharton’s Mack Center for Technological Innovation - and a real-world scenario builder at Royal Dutch/Shell in London.
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His academic work includes a 1995 article on scenario planning published in the Sloan Management Review that I use in my strategic decision-making course. And he heads Decision Strategies International, a consulting firm.
Brilliant Mistakes starts from the premise that 99 per cent of successes come from failures. Therefore, he argues that it’s puzzling for failure to have such a negative label. And he believes that since mistakes are so valuable, people should learn from them.
This observation leads Mr. Schoemaker to three implications for managers:
1. Mistakes should be planned. Companies go to great lengths to avoid mistakes. Instead, Mr. Schoemaker argues that organizations should not let them occur by chance but should actively plan to make mistakes. His common sense kicks in here and he suggests that companies should manage their mistake-making in a disciplined manner. Specifically, that means using criteria to rank mistakes - such as low cost, quick learning and extending the bounds of what managers think is possible. This is the sort of thing that is a matter of course for start-ups but very difficult for large organizations to pull off.
2. Mistakes must be mined. Mr. Schoemaker argues that even if companies do not take a systematic approach to making more mistakes, they should learn from the ones that they unintentionally make. As he put it, "You’ve already paid the tuition so why not get the learning." To do that, Mr. Schoemaker argues that organizations should take a forensic approach to mining the learning by understanding at a detailed level why the mistake occurred and figuring out how the company should change its processes.
3. Mistake-making must be promoted. As anyone who works in an organization knows, people will follow the leader. Unless the CEO is encouraging people to make mistakes and learn from them, following Mr. Schoemaker’s prescriptions will be a career-ending decision. However, if the CEO changes an organization’s incentive systems to give bonuses and career advancement to people who make mistakes that provide meaningful learning, then Mr. Schoemaker’s prescriptions could indeed come to life.
The business literature is rife with tales of great businesses that emerged from failures. Mr. Schoemaker pointed out that Alexander Fleming’s discovery of penicillin was a result of a contaminant in an experiment he was conducting for a different purpose, and the Beatles spent years playing in obscurity before they became popular.
I suppose if you include 3M’s (MMM) famous 20-per-cent time - the idea that employees can spend 20 per cent of their time working on projects that interest them, then that might be an example of a company that has systematized learning from failure.
But I see Mr. Schoemaker’s idea as fundamentally different because 3M is not programming the projects that its people choose - which seems to be a key idea behind his proposal. If two aspiring CEOs are competing for the top job in a big company, I have a hard time believing that any board would pick the one that made the most mistakes.
On the other hand, if a company was run with learning from mistakes as a key principle, it would probably trounce competitors who follow the traditional route of distancing themselves from mistakes by firing those who are easiest to blame for them.
Nevertheless, I do not envision that many organizations will embrace Mr. Schoemaker’s idea of intentional mistakes - even though it could stretch their thinking.
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