Risk and reward are related. The perfect, risk-free way of doing things has no room in today’s organisation. A fast moving enterprise requires a constant ‘prototyping’ philosophy based on imperfection. Keep your company in ‘beta-test mode’ as much as you can.

One of the greatest signs of maturity in an organisation is its ability to function well in ‘good enough’ mode. Every time I have dealt with business people striving for perfection, I have found an organisation lacking in self-confidence, unable to function well without controlling a lot of risk. As a result, perfect things are achieved, but they are also late and not terribly innovative. You will argue that many manufacturing processes and/or regulated product development can not possibly function in ‘good enough’ mode. I agree, but we have extended the famous slogan ‘Doing it right the first time’ to all aspects of organisational life. For many things, ‘doing it right the first time’ doesn’t make a lot of sense because they require a real process of trial and error to find an acceptable outcome. There is a whole philosophical and practical management movement (with Japanese roots) that sees trying and prototyping as the real thing. Here, imperfection is the norm and the only way to get closer to perfection faster.

Organisations that function in ‘perfect mode’ – even if they don’t accept this terminology – are those where you can see people:

• who need to have all the data/facts all the time.
• systematically exploring all the options to the point where all time is spent in exploration.
• waiting for the next set of data before moving on to the next level of decision making.
• only opting for solutions with a more than 80% probability of success.
• afraid of making mistakes.
• using a disproportionate rhetoric about quality

Unfortunately, real life is not about having all the facts and all the data or about functioning in a risk-free environment.

Somebody once said, “no risk = no profit“. Being imperfect by design means you accept that there are levels of risk (i.e. not knowing all the data) and that you need to assess the trade-off between those risks and speed or the need to rule out unworkable options as fast as possible. When there are many choices, ‘failing faster’ is in a strategy in itself. Choosing an option that’s 80% good will keep you moving. Choosing one that’s 100% good will require you to slow down and re-analyse things all the time.

Imperfection by design means that there is going to be more ventilation of mistakes and that that’s necessary. Mistake management is one of those ideas many organisations just pay lip service to. “Learn from your mistakes“, management says, but what they very often mean is, “Learn from previous mistakes and if you make new ones, be careful about where you make them and how big they are.” The philosophy of truly learning from your mistakes needs social validation inside the firm. That is, you need to show that people who made mistakes are promoted in their career and can reach higher levels. Many executive boardrooms are filled with people who never made a mistake. Many of those people are not memorable or can’t point to any personal breakthrough achievement other than reaching higher levels of management.

To accept and embrace imperfection and mistakes as a path to progress means that there will be practical and visible implications:

• Create the Hall of Fame of Mistakes where mistakes are publicly displayed. Once you start (and if you are in senior management, I suggest you put your mistakes up first), it will be contagious and people will have no problem sharing them.
• Ask for decisions based on imperfect data and the associated risk assessment.
• Accept lower probabilities of success.
• Spend time on scenario planning and discussion, on exploring and ‘prototyping’ ideas.
• Have conversations about risks and their behavioural consequences.
• Police, spot and highlight instances where mistakes have been punished.

Being imperfect and accepting that 80% of ‘completion’ is perhaps good enough to move forward is a potentially revolutionary idea which could transform the business! Before you dismiss it as something that you are already doing, be sincere and see how open you really are about sharing mistakes.

Practice ‘good enough’ and ‘higher risk’. It is therapeutic, though painful at first.

Keep ‘doing it right the first time’ for life-saving operations.

Keep many parts of the company ‘in beta-test mode’, improving continuously, but never reaching a ‘final’, ‘stable’ and ‘consolidated’ state.

A permanent state of becoming is stronger than ‘destination reached’.

Create The Hall of Fame of Mistakes and keep adding to it until it becomes second nature.

Copyright © – Leandro Herrero – 2008