PRINCIPLE 11
There Is No Sense Making a Mistake Unless You Can Learn from It
We all make mistakes, and I’ve probably made more than most. It doesn’t matter if we’re talking about my personal life (when I was young and did not get good grades in school), or when I was older in business (see our discussion back in Principle 2), I’ve made a lot of mistakes.
I think that’s a good thing.
If you never want to make a mistake, then don’t do anything. If you always play it safe—research, double- and triple-check everything before you move an inch—then you probably won’t make many mistakes.
You probably won’t accomplish much, either.
To be successful, you can’t remain cautious; you must take calculated risks. If you’re going to take calculated risks, you’re going to make mistakes.
What’s important is to learn from them, so that you can actually end up benefiting from those mistakes. It sounds obvious, but it’s not what most people do. They will fail at something, and yes, they will take steps to make sure that they don’t fail again, but let’s look at two steps they usually take.
1. Going forward, they’ll make sure they won’t make the same mistake again. For example, early in their career they were criticized for misspellings, incorrect names, and missing several commas in a PowerPoint presentation. So, for the rest of their life they triple-check their work and always have two other people proofread all their presentations. As a result, they spend more time making sure that everything is spelled correctly than they do actually giving quality advice.
2. They simply avoid the situation altogether. For example, back when they were in their midtwenties, they gave a speech and it didn’t go well. So, for the rest of their career, they avoid situations where they have to speak in public. Sure sounds to me like they are shrinking their world and becoming overly cautious. (Not surprisingly, their career suffers.)
Neither of these paths are the ones you want to take. As I said, you want to learn from your failures so you can build off of them.
Here’s a personal example. When I was young, I was a bit cocky and so I didn’t always make the best decisions. I didn’t study for my Certified Public Accountant exam, even though I knew for a fact that it’s more difficult than the certification that lawyers take (and almost every lawyer takes a review course before they sit for the bar exam). Not surprisingly, I didn’t pass.
Well, I could have taken either of the several paths we just talked about. I could’ve said I would take a CPA review course—which everyone says is the best way to prepare—or I could have simply not taken the test again and found something else to do with my master’s in taxation rather than become a CPA.
Neither path would have helped me learn from my mistake. My mistake was that I didn’t study. I needed to figure out the best way to study. (The second option wasn’t a possibility. I really wanted the CPA designation.)
Well, it’s true that review courses work best for most people. I tried one of them, and again I failed the test. I’ve never really learned well that way. I looked at myself in the mirror and asked myself, “Where is my core competency?” The answer was that I have an uncanny ability to “see patterns” and this helps me solve problems.
So, the best thing for me to do was to get hold of the five previous CPA exams—they were legally and readily available—and to start studying them. Not only was I looking to see the right answers, I wanted to know how much emphasis they were putting on theory and how much on specific areas like tax, accounting, and ethics. I discovered there were patterns as to which types of questions and subject areas might appear on the next exam. As a result of poring over the previous tests, I passed the next CPA exam with ease.
You always want to learn from your mistakes so you can put that knowledge to your advantage in the future. Again, it ties back to the whole concept of being a calculated risk-taker.
Look for patterns and gain a competitive advantage!
If you eliminate mistakes, you improve your chances of being successful next time. And if you eliminate the mistakes and then capitalize on that learning, you tip the odds even further in your favor.
You always want to minimize the risks you face and maximize the opportunities.
I like sports analogies, so let me use one from golf to underscore the point. The way every golf course in the world is laid out, the expectation is you’ll take two putts, once you’re on the green, to get the ball into the hole.
Suppose you’re not a great putter and you average two and a half putts per eighteen holes. That means you’re taking nine more shots than you should, per round.
If you can correct that and get it down to two putts per hole, you will reduce your handicap by nine. (Instead of shooting 100 as you usually do, you’re down to averaging 91.)
Mistakes—if you treat them correctly—really are an opportunity. This isn’t a platitude. It’s a fact.
Let’s say you really studied what you had been doing wrong: Your balance was off and you were holding the putter too tightly. You kept working at your putting, to the point it’s now the strongest part of your game. Instead of taking two putts per green, you are averaging 1.75 putts. All of sudden, you’re posting very respectable scores of 86 or 87.
CASE STUDY: LEARNING FROM ONE OF THE CLASSIC MISTAKES OF ALL TIME, THE EDSEL
“There’s a commonly held belief that the Edsel was somehow horrible, that it was shoddily built or in some way hideous. These beliefs, though not entirely groundless, fall well short of telling the whole story of why the Edsel failed.” This is the way Jacob Joseph begins his analysis on CarBuzz.com to describe what is commonly cited as one of the biggest mistakes of all time.
In fact, the Ford Motor Company didn’t make one mistake in manufacturing and introducing the Edsel; it made many. It began with the decision to create the car in the first place.
As Anthony Young wrote in Automobile Quarterly, “Ford executives attributed General Motors’ large market share [at the time] to GM’s wide range of offerings—from the low-priced Chevrolet and Pontiac, to the mid-priced Buick and Oldsmobile, up to the luxury-priced Cadillac. Henry Ford II and Board Chairman Ernest Breech believed that the low-priced Ford, upper-middle-priced Mercury and luxury-priced Lincoln car lines left a gap Ford should fill.”
That, in and of itself, may not have been wrong, but how Ford decided to fill the perceived gap certainly was. The initial plan was to have Lincoln-Mercury dealers sell the Edsel, but at the last minute the decision was made for Edsel to be a freestanding division. One of the many problems was that the car would still be built at Lincoln-Mercury and Ford plants where “every 61st car down the Ford or Mercury assembly line was an Edsel. Workers had to reach for parts in separate bins, mistakes were made and quality suffered,” Young writes.
And that was just the beginning of the problems.
The company made the decision that the car should have a dramatic front grill to stand out in the marketplace. By the time the committee appointed to design it finished, it was variously described as “an Oldsmobile sucking a lemon,” “a horse collar,” and even “a toilet seat.”
Given the long lead time in producing the car, Ford kept up a steady stream of “leaks” to the press to keep the public interested in the “car of the future.” All this publicity set up extremely high expectations, expectations that would have been virtually impossible to meet.
Then there was the matter of the name. Ford’s legendary ad agency Foote, Cone & Belding initially came up with eight thousand potential names and winnowed the list down to ones like Pacer, Ranger, and Corsair. The Ford Executive Committee couldn’t decide and in “exasperation,” as Young put it, Chairman Breech said “Why don’t we just call it Edsel?” Edsel Ford was Henry Ford’s only son. Edsel’s three sons, William Clay, Benson, and Henry II, were all opposed to Breech’s suggestion, but the name was adopted. Twelve months of work to come up with just the right name was wasted. In a terse memo, the public relations director for the new division, C. Gayle Warnock, typed, “We have just lost 200,000 sales.”
But the “real problem with the Edsel was that it was confusing,” Joseph writes. “Ford was never really able to define exactly what the hell it was or why you would want one. The Edsel range of vehicles were more or less slotted in between the Ford and Mercury brands, but the company didn’t really do a very good job of making this positioning clear. Low-end Edsel models cost about the same as a top-end Ford, which would’ve been fine if there was some sort of reason for the extra cost, but it wasn’t really clear what that reason was, and the fully-loaded Ford was clearly the better deal. Pricier Edsel models cost as much or more than comparable Mercury models, but didn’t offer any kind of reason why you should pick one over the other.
“Even before the first model year was up, Edsel sales and marketing were folded into the Lincoln-Mercury division, where they were ignored and left to die.”
EXERCISE 11: THE EDSEL
1. Was the Edsel truly needed in the marketplace?
2. If you said no, what would you have done to counter GM’s dominance? If you said yes, how would you have positioned the vehicle?
3. Was a freestanding division a good idea executed poorly, or simply a bad decision?
4. What role should the Ford Executive Committee have played? (Remember that the Ford Company, at that time, was very much a family business.)
YOU HAVE TO ADMIT YOUR MISTAKES
You’ve seen this situation hundreds of times. (You may, in fact, have been the main character yourself at least once.) You work incredibly hard to develop a great product or service. You introduce it into the marketplace . . . and it bombs.
Your reaction? “The problem wasn’t me or my product. The problem was the market/customer/whoever didn’t appreciate what I had. It was a great product (or service). The customers are idiots. That’s all there is to it.” Because you are convinced you are right and everyone else is wrong, no learning takes place after the fact. There is nothing to learn, you argue. You did everything right.
Written down this way, it sounds silly, doesn’t it?
The only person who gets to decide whether you have a truly great product is the customer. If they love it, you do. If they don’t, you don’t. If they don’t buy what you are trying to sell them, you need to figure out why. Otherwise, you run the very real risk of making the same mistake next time.
Now, you could be right. It could’ve been a great product, but it might have been one that solved no real need. Or maybe it solved a need, but you didn’t communicate it clearly enough. Or maybe it solved a need and the communication was good, but . . .
I love competing against people who don’t learn from their mistakes.
If you’ve studied their patterns, you know exactly what they’re going to do in any situation—because they always do the same thing—and it’s easy to take advantage of that fact. It’s like playing poker with people who constantly show you all their cards.
You need to figure out what the problem was. Make no mistake, there was a problem. Otherwise, the product would have sold. Figure out what went wrong and learn from it.
ONE WAY OF REDUCING MISTAKES AHEAD OF TIME
Obviously, it would be better not to make mistakes. That’s not possible. One way to reduce the number you and your staff are going to commit is to be extremely clear on expectations up front.
As an employee, you want to know whether the person you’re working for only wants “textbook” answers, or really wants solutions that are outside the norm and might be more effective than usual. (Your boss will fall into either of these two camps.)
If you’re hiring people, you need to tell them whether you want things strictly by the book, or whether you want them to also use unconventional approaches to get the best answers.
Knowing the approach that is expected will make everyone’s life easier.
LET OTHERS HELP YOU LEARN
As you analyze what went wrong, have others help you. If they were part of the decision-making that led to the mistake, they may have insights (and the process of analyzing what went wrong will help them learn as well). If they were not part of the initial decision, they may be able to see things with fresh eyes.
There is a tendency for senior leaders not to involve others in their after-the-fact analysis. Part of this, I believe, is that they simply don’t think to do it. Another reason is probably that, somehow, they think they’re going to be criticized and blamed for the mistake.
Well, the leader is always ultimately responsible, so that’s not a very good reason for not involving others. The reality is that you should not take it personally; you’re all just trying to come up with better solutions together.
YOU CAN LEARN FROM OTHER PEOPLE’S MISTAKES BY OBSERVING THEIR PATTERNS
I love reading biographies. I look for ideas that I can borrow and use in my own life. You know, if George S. Patton typically did X, Y, and Z and was successful, then maybe if I do those three things I will be successful too. I’m also interested in how people do things differently. Steve Jobs is an example of using both positive and negative reinforcement.
Jobs frequently would call his employees or suppliers “idiots” or worse when they gave him less than an A+ answer or turned in less than A+ work. What I noticed in reading his biography was that denigrating people could have two effects.
There were some who found this criticism devastating and never recovered. Clearly, it was a mistake to try to motivate those people that way.
But for others, it was a motivating force; they were driven to show Jobs that he was wrong and that they were capable of doing great work. After being criticized, they went back, tried even harder, and excelled.
For example, when Jobs wanted to use glass in his iPhone, he went to Corning to see if they could manufacture it for Apple. The president of Corning explained to Jobs that it couldn’t be done from a technology point of view. Jobs told him “to get his arms around it and find a way to do it; if you can’t, you shouldn’t be president.”
Six months later, Corning was producing the Gorilla Glass that Apple needed for the phone.
When the business is facing difficult times, I believe motivating people to work harder is essential; if the “carrot doesn’t work, use the stick.”
A CHECKLIST THAT CAN HELP YOU REDUCE YOUR MISTAKES
The book is long out of print, which is too bad, but in Getting It Right the Second Time, Michael Gershman came up with a wonderful checklist that you can use after something has failed to help you figure out why.
Yes, of course, every failure is caused by different reasons. But invariably, if something went wrong, he says it can be attributed to one of the following reasons:
1. Perception. People simply didn’t understand what you wanted the product or service to be. (See our discussion of the Edsel earlier in the chapter.)
2. Pitch. You stressed the wrong product attributes, or did it in the wrong way.
3. Price. It was too high, or sometimes (surprisingly) too low.
4. Packaging. Was it attractive or did it send the wrong message? (For example, it looked down-market, even though you were trying to sell a high-end product.)
5. Piggybacking. Sometimes coming out with a “me too” product is fine when the market, for a certain type of product or service, is exploding. Other times saying, “It works just as well as X” is the wrong way to go. If the price is basically the same, people will go with the original.
6. Promotion. Would you really buy a luxury car because it’s promoted as being “least expensive in its class”?
7. Promises. This one is almost always fatal. If you promise something—or overpromise—and don’t deliver, you’ll lose the customer forever.
8. Positioning. Is what you have the best or the cheapest; just as good as the leading brand at half the price? You need to make your positioning both explicit and appropriate for your product. 7-Up was a struggling soft drink before it began to position itself as “the Uncola.”
9. Placement. Was the product in the right stores—and in the right position within the store? If you’re selling a high-end toy, you may not want to be in Toys “R” Us. Or would your product be better off near the register than down an aisle?
10. Premium. Cracker Jack was just another failing snack food until they hit on the idea of including a “prize” (premium) in every package.
11. Publicity. Did you get the word out? Effectively?
12. Perseverance. Did you give up too soon?
13. Procedure. If you have a certain way of doing things, did you follow it in the case of your failure? If you always have three senior people sign off on an idea, for example, did they, in this instance?
FOUR TAKEAWAYS FROM THIS CHAPTER
1. Be willing to make mistakes if you want to be successful. Doing the same thing over and over again may be safe, but you rarely grow if you take that route. You should continue to take calculated risks.
2. Let the marketplace tell you whether you are right. It’s great that you think you have the best product in the world, but if no one buys it, you don’t. Put another way, if the dogs won’t eat the dog food, it’s bad dog food no matter what you think.
3. Analyze your mistakes. Always get input from other people. They may see things you don’t.
4. Don’t forget to learn from the mistakes of others. They can keep you from making the same mistake yourself.