Richard Farson is the author of the book “Whoever Makes The Most Mistakes Wins”, in which he offers a new take on the concept of success. He explains that, without taking risks, without first tasting failure, it is impossible to achieve success. To support his thesis he cites examples such as “the Post-It miracle was produced as the result of a mistake and the rise of Coca Cola began after the failure of New Coke”. He recommends that companies listen to Thomas Watson, the founder of IBM, who said: “The quickest way to achieve success is to make twice as many mistakes”.
“While he was working at Apple, David Levy came in for some very unusual criticism from his boss. He told him that he was not making enough mistakes and told him to increase his error rate to 80 percent. Levy has transformed this comment into the most important principle of his business life and today he is the owner of his own firm and a very successful entrepreneur. He says: “When I don’t make a mistake, I feel that I haven’t been doing my job.” The person who is telling this story is the psychologist and behavioral scientist Richard Farson. Farson’s new book is entitled: “Whoever Makes The Most Mistakes Wins: The Paradox Of Innovation.” It redefines what is meant by success and failure and has some very striking findings.
Richard Farson says that leaders who change the way they look at success and failure are leaders who take risks. Success in the modern business world is based on continual innovation. A completely new way of thinking needs to be adopted in order to be innovative. Leaders who tolerate risk and have an innovative understanding of management can ensure that their companies achieve success. He notes that, in a rapidly changing economy, executives can be faced as much with failure as success.
We conducted an extensive interview with Dr. Richard Farson, author of the McKinsey prize-winning book “Whoever Makes The Most Mistakes Wins: The Paradox Of Innovation.” Farson explained the theories which he puts forward in his new book and how companies can become successful by increasing their error rate. Richard Farson answered our questions as follows.
* What do you mean by mistake? What kind of thing would you class as a mistake?
By mistake I am referring to well-planned mistakes. I mean mistakes such as when someone takes a risk or does something in a different way and is unsuccessful as a result. When I talk about mistakes I am not talking about recklessness, irresponsibility or inadequacy. I am talking about accidents that are eventually beneficial.
* So what happens if the mistakes cause the company severe losses?
Companies can suffer losses as the result of mistakes. But they can suffer greater losses as a result of a concept of management which is averse to risk. Many successful companies do not punish mistakes but try to learn from them. After the Ford Edsel, the biggest mistake in the history of American companies was New Coke. This was very expensive and embarrassing and an unmitigated mistake. Coca Cola started off with the name ‘New Coke’ and tried to give its customers a new project. But consumers did not want the new cola; they wanted the cola they were used to. The result was that the Coca Cola company understood that the secret of success was not in the formula but in the brand. This transformed a mistake into an extremely profitable mistake. Because, as a result of this mistake, Coca Cola was able to concentrate on branding and became an example to many companies around the world.
* What kind of companies are most prone to mistakes? The ones who grow rapidly and take risks?
Companies which take risks are always the ones which grow the fastest. When David Levy was working at Apple he came in for some very unusual criticism from his boss. He told him that he was not making enough mistakes and asked him to increase his error rate to 80 percent. Levy has transformed this comment into the most important principle of his business life and today he is the owner of his own firm and a very successful entrepreneur. He says: “When I don’t make a mistake, I feel that I haven’t been doing my job.”
Thomas Watson, the founder of IBM also used to say: “The quickest way to achieve success is to make twice as many mistakes”. Athletes are very well aware of this. For example, a tennis player does not fault on their serve twice in a row. While if a skier rarely falls over then it means that she or he is not taking enough risks to realize their potential.
* So how should companies manage mistakes? Should employees have the same opportunity to make mistakes as executives?
All companies should stop thinking in terms of success and failure. Instead, they should remove these concepts from their management vocabulary. In this way they can approach what were previously judged as successes or failures in the same way. Instead of punishing or rewarding, they can encourage. Executives who are able to ensure that their employees fully participate in the company can approach things in a non-judgmental way. They are always open to learning and analyzing. As a result, all the management processes improve.
* There are companies which make mistakes, suffer losses and become bankrupt. What are their characteristics? Why aren’t they successful?
Some mistakes can be fatal. These are mistakes which lead companies towards a single subject. But we come across these mistakes very rarely. Today many companies are unsuccessful because of difficulties in human relations or insufficient capital. In the US eight out of every ten companies experience this kind of failure in their first five years. Very few are unsuccessful because of mistakes.
On the other hand, we frequently hear of mistakes which are very expensive. Indeed, being happy with the current situation can be very expensive. Mistakes makes us move forward very slowly. They can make those following in our footsteps leap forward. As a result, success can be dangerous. At first this sounds stupid, but it is true. Just as a failure can produce a stunning rise, so a success can trigger an equally precipitous fall.
HOW ARE FAILURES TURNED INTO SUCCESSES?
SUCCESS IS DANGEROUS IBM is an example of the danger of success. At the beginning of the 1980s it was making tons of money and it ranked first on Fortune’s list of the most popular companies in America. But within two years it was losing more money than any company in American history. IBM was busying itself with making a lot of money from mainframe computers while less successful companies were trying to produce smaller, less powerful lower-cost computers. Even though IBM had begun developing personal computers a long time ago, the first working version was launched on the market by Jobs and Wozniak, the founders of Apple. This means that for years IBM was entangled in bureaucracy and trying to produce a product to its own standards, using methods which it had used before and which had been successful. In this period it was very successful in mainframe computers. It could have achieved similar success with PCs.
THE POST-IT MIRACLE The post-it notes were the result of a mistake. This mistake occurred in 1963 when one of 3M’s engineers, Spencer Silver, was trying to develop an extraordinarily strong glue. Some of the glue on which Silver was working was unusually weak. He mentioned this low adhesive glue to his colleagues at 3M. Maybe he hoped that they would be able to find a use for it. Years later another 3M engineer, Art Fly, was sitting in a church and remembered his colleague Silver’s mistake. While he was thinking about this, he was trying not to drop the pieces of paper he had put in his prayer book to mark the places of prayers. He put the two together. He began to wonder whether it would it be possible to use Silver’s low adhesive glue for these pieces of paper and whether these little pieces of paper could be stuck to a surface, removed and then stuck again. And it was possible. Fry’s invention while he was praying is today used all over the world in every workplace. 3M continues to make a lot of money from the post-its.
HANDE D. SÜZER