With the right organizational philosophy, errors can become a competitive advantage.
by Matthew J. Painter
March 7, 2011
People make mistakes. This is not an axis-shifting discovery of the 21st century; it’s ancient. None of us are immune to mistakes, so why does corporate America insist that employees avoid them entirely?
Because mistakes are common — and we know that mistakes can prevent companies from reaching their goals — then companies should ask themselves, “How do we foster an environment where mistakes become a competitive advantage?” They can become advantageous when they’re expected, encouraged and unique, and when we learn from them, self-identify them and can laugh at them.
Organizational-learning scholar Peter Senge, in his book The Fifth Discipline, described a beer game. In the game, a retailer, wholesaler and manufacturer of beer came into a simple, yet seemingly quite complex game of supply and demand. Each stakeholder wanted to maximize profits, so when demand grew, the retailer ordered more, the wholesaler became backordered, the retailer ordered even more, and the manufacturer couldn’t keep up with demand. Logically, or even illogically, the retailer kept trying to order more beer to keep the shelves stocked. Demand had only risen once and leveled, not steadily increased. Each person made a mistake.
Senge alludes to this as a systems mistake resultant from not considering the system as a whole. Instead, each link in the supply chain thought only about their individual piece of the larger whole. This is a costly mistake that could have been avoided. It’s also one that all involved stand to learn a great deal from. These types of mistakes, the ones that occur because of the system, are expected. The participants here were thinking about their pieces of the beer puzzle, and that’s good, right? They can learn, however, to think about the effects that their pieces have on the whole — and that’s when mistakes become competitive advantage. If we not only expect but also learn from our mistakes, it becomes an advantage both for us and the organization as a whole.
James Kouzes and Barry Posner discuss learning from mistakes in their book The Leadership Challenge. They assert that if we can learn from mistakes, then we can expect them or even embrace them. The key is to understand that mistakes often drive success. Kouzes and Posner quote former Apple executive Mike Markkula as stating, “I believe the overall quality of work improves when you give people a chance to fail.” They go on to state that “failure breeds success” and challenge us to think about our own mastery of work, sports and other skill-based activities. We didn’t become masters at them overnight. We had to make more than a few mistakes for us to get good — really good. They highlight the failures of some famous folks: Have you heard of Babe Ruth’s strikeout record? Or R.H. Macy’s failures as a retailer? Mistakes are part of the path to success. “Learning doesn’t take place in the absence of mistakes,” Kouzes and Posner write. If we don’t have room for mistakes at work, how can the organization ever reach its fullest potential?
Have you ever heard of a company actually encouraging mistakes? The norm is expectation of perfection. But developing a corporate culture where mistakes are not viewed negatively doesn’t take a lot of practice or skill. Getting to the point where people in the organization self-identify mistakes may be more difficult, but this can be a natural progression. In a culture that embraces mistakes, people will begin to watch themselves, know the mistake then immediately begin to move on, learn and try something new. This goes back to the foundation of business: All businesses started out with an entrepreneurial spirit, a risk, and likely because of mistakes, not in spite of them.
Inc. magazine’s August 2007 cover story declared “Fun: It’s the new core value!” Fun at work isn’t possible unless mistakes are understood. This doesn’t mean encouraging mistakes, mind you, but understanding them and their nature. It means knowing that mistakes are part of the process and working with employees to overcome them. If employees fear retaliation for mistakes, morale declines and fun is no more. The attention and energy focused on pointing out and reprimanding mistakes can be better spent on creating innovation and value.
Competitive advantage from mistakes comes when stakeholders understand and expect mistakes, foster an environment to learn from them and invest in employee development. Embracing mistakes can engender an organization-wide entrepreneurial spirit where employees are encouraged to try anything. Understanding mistakes enhances workforce self-awareness and knowledge transfer.
Matthew J. Painter is the system organizational leadership degree program coordinator for National American University. He can be reached at email@example.com.