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An article in the June 2006 Harvard Business review, “The Wisdom of Deliberate Mistakes” by Paul J. H. Schoemaker and Robert E. Gunther, makes an interesting case for going against conventional wisdom when it comes to making business decisions, although it’s easy to be put off by the title. The term “deliberate mistakes” is intentional by the authors, it seems, to provoke the thinking process. They present the idea that by being willing to experiment a bit, some decisions can return potentially huge payoffs.

They say, “Although organizations need to make mistakes in order to improve, they go to great lengths to avoid anything resembling an error… Consequently, companies may be moving in the wrong direction, retreating from error making even though mistakes - done right - are a powerful way to accelerate learning and increase competitiveness.”

The difference between experimentation and mistake-making seems to be in its intention. Many times experiments are designed to merely confirm present assumptions. The value of making a deliberate mistake is when it pays off. The authors point out, “But if such a mistake unexpectedly succeeds, then it has undermined at least one current assumption (and often, more). That is what creates opportunities for profitable learning.”

The authors identify five situations in which you should consider making deliberate mistakes:

• The potential gain greatly outweighs the cost of the mistake
• The same types of decisions are made repeatedly
• The environment has dramatically changed
• The problem is complex and solutions are numerous
• Your organization’s experience with a problem is limited

How do you distinguish smart mistakes from dumb ones? The authors outline a plan they used internally for determining which mistakes to make:

• Identify assumptions
• Select specific assumptions for testing
• Rank the assumptions
• Create strategies for making mistakes
• Execute the mistake
• Learn from the process

“Every company needs people who have made mistakes - and then made the most of them.” - Bill Gates, on hiring Craig Mundie, founder of a supercomputer company that ultimately failed.

The authors wrap up by saying, “Leaders who understand this will foster an organizational culture that encourages intelligent, deliberate mistake making. As IBM’s Thomas J. Watson, Sr., noted, ‘If you want to succeed, double your failure rate.’ “

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