| Mar 01, 2012
Of all the lessons I’ve learned in business, rule #5 from my personal 10 Rules for Entrepreneurs
- Make mistakes, move fast, recover and learn - should apply to everyone from the CEO on down. But it doesn’t mean that we should strive for mistakes. It means is that you have complete tolerance for good bets that go wrong. There’s a big difference between mistakes that are the result of incompetence and mistakes that are the result of a carefully considered risk that goes sour.
Let me give you an example. Suppose an engineering team releases a product that turns out to have an obvious security flaw that causes huge harm to the company’s reputation. It turns out that nobody had performed adequate testing. That’s simple incompetence and somebody clearly really messed up. On the other hand, let’s say that in order to beat a competitor to market, an engineering team takes some shortcuts to get a new product out the door in half the time that they had originally estimated. Nevertheless, the product flops. It would be easy to say in retrospect, “You should have done more market research, more testing, more focus groups, etc.” but those processes would have delayed the product to the point where it would have surely flopped. The bottom line: you took a chance, and you failed. Now, you need to figure out why you failed so your next chance unfolds differently. What could have been done differently that would have made the outcome more favorable? How will you apply what you learned to the next product? And, is it too late to go back and fix what went wrong and try again?
In a fast moving industry, you can’t eliminate risk. Trying to eliminate risk is like driving by looking in the rear view mirror – as long as the road is straight, it works fine. -Dave Friend, Carbonite CEO