There are two kinds of potentially critical mistakes people make in business: mistakes of commission, and mistakes of omission. Mistakes of commission are defined as any action one takes which ends up costing more resource than it generated. Most of the time it’s simply an error in judgment. You sized up a situation and took a calculated risk. Your assessment was off, the risk doesn’t pay off and it’s considered a ‘failure’, or a mistake.
Since they are so obvious, mistakes of commission are calculated, number-crunched and tracked. This puts these types of mistakes on the radar of C-level executives and others who determine the direction of the company. If you screw up in a way that can be tracked and if the cost is deemed big enough, you may very well be fired.
The other type of mistake is far more subtle. It’s called a mistake of omission, when one could have taken action and chose not to, resulting in a missed opportunity/loss of potential. These are far more difficult to track since they don’t usually take from current resources. Instead, tracking relies on estimations of what ‘could have been’. Opportunity cost may come with it a ‘too bad’ sentiment, but isn’t usually grounds for firing.
There is a massive disparity between how these two types of mistakes are handled – one could lead to firing, the other leads to a simple ‘we’ll do better next time’. Over time, employees get the message: if doing something could get you fired, and doing nothing avoids firing, then the safest thing to do is to do nothing.
This would be okay if mistakes of omission were actually benign. Unfortunately, it’s the exact opposite scenario. Entire businesses and even countries have risen and fallen based on actions they didn’t take.
There are three things a business needs in order to avoid failing from mistakes of omission:
1. A different way of thinking about opportunity cost.
You never learn from doing something right the first time. If you did right the first time, you either already knew how to do it or you got lucky, in which case you probably cannot duplicate your results. You ONLY learn by making mistakes.
Individuals are microcosms of organizational macrocosms. That is to say, as people we reflect how organizations work, and organizations are reflections of how individuals work. While it’s hopeful that the whole is greater than the sum of its parts, and brings together the expertise and wisdom of many individuals, each organization ends up as its own organism. It’s a new thing that hasn’t existed before, and that means learning through errors. It’s unavoidable, but it doesn’t spell D-O-O-M. In fact, the most successful businesses – just like the most successful people – learn from their mistakes, dust themselves off and recover to get to the next level.
This doesn’t mean having a cavalier attitude toward failure. A business can definitely fall based on mistakes of commission, as well, so being savvy and learning from mistakes is the key. Incremental victories means increasing the quality of your failures, not repeating the same mistake over and over.
As Samuel Beckett once said:
Keeping an attitude of ‘fail again, fail better’ is much healthier than raising hell every time a mistake with cost is made.
2. A system to track both mistakes of commission AND mistakes of omission.
This is tricky. It’s rare to see an institution implement a system for tracking ‘possibilities’. It will never be as accurate as tracking actual cost from current revenue, but that doesn’t mean it’s not possible. There are personality types that are actually extremely well suited to estimating projections, as well as recognizing how components in systems (the variables) alter outcomes (the emergent).
This is called Systems Thinking, and if you haven’t heard of it drop everything right now and Google Gregory Bateson. (Actually… read the rest of this article. Then Google Gregory Bateson.)
Systems Thinking is the technology of understanding how we get the results we want by creating conditions which make those results inevitable.
For example, if I want to drive a car I need to have certain variable in place in order to make that happen. I need to have access to a car, I need to know how to turn it on and drive it. I need to have a matching key and I need to be in a context where driving makes sense (not, say, kite surfing in the ocean). I also need the car to respond to the matching key by having all of its machinery working – the engine, the flywheel, the transmission, etc… need to all be talking to each other in the way that car parts talk to make things go ‘vroom’. (I’m, uh, not a mechanic.)
If any of those components are missing, I don’t drive a car. However, if I have all of my variables in place and I have the desire to drive a car, then it’s inevitable that I will do so.
Most people do not think like this, because thinking like this starts to overwhelm the brain. As efficient creatures we think in ways that we can handle, and believe stuff like “that’s just cause and effect,” ignoring that no such thing exists. That’s okay, it’s makes life manageable. It doesn’t have to exist, it just has to work.
However, there are personality types that are incredible at thinking like this, and given the task of creating systems which track possibilities and projections, well, they feel like they won the career lottery. (In particular, INTJs – Perspectives/Effectiveness users – and INTPs – Accuracy/Exploration users – excel in this arena.)
3. At least one person on your team who is fearless about making mistakes.
The final component needed is a staff member that instinctively understands this principle. Not that you need to hire a maverick or someone who flies by the seat of their pants, but a person who realizes that once a risk is calculated it’s worth taking big chances for big payoffs.
The personality types that excel in this area are the Exploration types – the NPs in the Myers-Briggs system – who learn by pushing buttons and taking chances in their environment. I’ve often described them as people who carry a machete, see 6 foot high grass in front of them, and get excited about blazing a new path. Tigers be damned.
Exploration types are probably the first to say “Hey, let’s go to the moon.” (Though many personality types were required to make that happen, it’s the Explorers who most likely gave the initial push.)
In particular, ENFPs – the Exploration/Authenticity users – and ENTPs – the Exploration/Accuracy users – are great at this. They don’t really worry themselves with fears about getting fired, since they’re amazingly good at getting the next job. In fact, if you have one of these types on your staff, you probably noticed a pattern every employer who has ever employed one of these types knows: they are your best employee for about six months, your rising star, when suddenly what was once a bona fide A-Player suddenly becomes a C-Player. Why? Because these types thrive on novelty and change. While they are learning a job, they’re incredible. Once they know a job, the interest wanes until the employee is now on boredom life-support.
When hiring, it’s not just about getting the right people on the bus. It’s also about getting the right people in the right seats. Exploration types – ENFP/ENTPs – do their absolute best in situations where they’re learning as they go and are able to take big risks. And since they’ve been doing it all their lives, they’re usually pretty good at it by the time they get to you.
Obviously, type isn’t the only indicator of a good team member. Work ethic, character, experience and individual talent all play a part. That said, Explorers have a natural talent for taking your business to the next level by being willing to take chances. Make sure your team is well-rounded by having at least one of these guys.
And get ready to be astonished at how you get the cheese.
p.s. If you’d like to see one of the greatest business minds and system thinkers of the last century talk about errors of commission v. errors of omission, watch this video. I’ve set it at the 6:00 mark for the juicy stuff:
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