Tim Harford: Admitting Failure as the First Step to SuccessMay 17, 2012
In traveling around the country for the 30 Million Jobs tour, we noticed something similar in nearly everyone we met: in the face of great economic and financial problems, Americans have an overwhelming appetite for new, impactful ways to influence our collective fate and, together, sieze a culture of visibility, integrity and choice.
Two words describe it: Collective collaboration — or solving problems together — is something that we’ve been talking a lot about on the show over the last few months.
“Working together” may sound simple, but it’s not easy. In order to effectively perpetuate collective collaboration, our results are only as good as the visibility, integrity and choice of the network of people and institutions we have involved. The other challenge is recognizing (and accepting!) that it’s impossible for us to know everything. But guess what? It’s okay to not know everything. Through experimentation, a willingness to learn from results and a willingness to adapt, we can find better outcomes for nearly any challenge.
On the theme of collective collaboration, we spoke with Tim Harford, the “Undercover Economist” and senior columnist for the Financial Times. He is the author of Adapt: Why Success Always Starts With Failure. Harford hares his tips on how people, and even nations, can utilize trial and error feedback in order to succeed.
We’ll be talking more about collective collaboration on May 24th with Russell Simmons at the 92nd St. Y in New York. For tickets and information on the event, visit 92Y.org.
>>> in traveling around the country, we have found america has an overwhelming appetite for new impactful ways to influence our collective fate and seize a culture of visibility and integrity to create choice and ultimately solve our problems and that is exactly how basically every problem on the list can be addressed. two words describe it. collective collaboration. it's the idea behind today's specialist, undercover economist and tim harper is a columnist for the new york times and his book "adapt ", is now out on paper bark. tim, the most absent component is a culture, a culture that says it is okay to fail, a culture that says here is how you adapt, a culture that says this is how you collaborate, this is how we find each other. which cultures would you point all of us to that do this the best?
>> i look at successful institutions, successful organizations. they're not organizations that don't make mistakes. they are organizations that are very, very good at fixing the mistakes when they occur. i mean, fun example is a serious example but interesting to contemplate. pixar make all these wonderful movies. in p ai xar, the whole process of making a movie is one long feedback session. where people are saying, well, you know, we need to improve that, improve that, improve that. and they've developed a culture where they can correct each other's mistakes and admit to mistakes and move on. that a sort of trivial example because of course, it is all just you know, toy story and toy story 2. but i think that far more important institutions, whether we are talking about the u.s. army, congress, the european union. we need to learn from this ability to fix our own errors. too often we have the assumption that we won't make any. that assumption is always proved wrong.
>> well, hello, another british voice, overloading now with brits. you talk in your book about iraq and success and failure there. i'm wondering if you could expand on that for us now.
>> absolutely. it would have been -- let's leave the decision to go into iraq. i think everyone has strong viewes about that. what interests me about the situation in iraq was you add large organization, professional organization, very brave men and women, trying to do the job that they had been given. and they had been given a strategy that wasn't working. and i was fascinate had by the process of actually figuring out the strategy wasn't working and trying to do something about it. and that change didn't come from the top. didn't come from donald rumsfeld or from the senior generals. it came from middle managers. people further down the organizational hierarchy. who were incredibly brave, took risks with their lives but also to their careers which i think for soldiers perhaps a harder thing to do. to actually almost launch an internal rebellion inside the u.s. army and say, we can do it differently. and these new ideas, this is where we are talking now 2006, 2007, 2008, they didn't spread by going to the top. they spread horizontally. colonels, majors, they knew they could save lives if they learned what was working. so they are very keen to learn from each other, even from a while, the top brass wasn't interested in all in what was being done.
>> tim, listening to what you are saying, i'm trying to figure out how this adapting and admitting failure and correcting failure, how that would apply here. in washington. and to admit failure requires, you know, strength of character but also a bid of courage. how would you advise, if you had 535 members of congress on a couch before you, how would you advise them to, one, admit failure, and two, go about making the decisions to change what's failing? yeah, it is a really important question. i think one thing i would love to see members of congress do is to admit uncertainty before they act. it is tough to admit that you failed. it is easier to say, we've got ideas for saying improving education or prisoner reform or whatever it is. we've got ideas. but we can't guarantee those ideas will work so we will republican pilots, run randomized control trials, the same way drugs are tried out. can you run a randomized control trial. we will try the new ideas out. and if they work we will use them and apply them more widely. if they don't work, we will stop. and there's no shame in that. i think part of this culture of admitting failure is admitting you don't know ahead of time. but it is tremendously difficult to do. the very polarized culture and politics in general where people are just encouraged to that. last week j.p. morgan comes out and says they lost $2 billion trading in credit default swaps of some sort in london. jamie dimon, ceo, comes out and says, we screwed up. a big mistake. failure. we will learn from it. should we say, okay, jamie, we are all happy. if you walk around wall street or washington, there's a lot of people for blood or retribution or changing leadership of the bank. let's think of this in that context.
>> sure. i think that the broader context, i think that in itself is not significant. what is significant is that this money was lost by a part of the bank that was supposed to be hedging risks. saving the bank from making, you know, from losing money. it is supposed to be really safe. it is not easy to see how they lost $2 billion. the broader context is the volcker rule and other in world, the vicker's report, they are trying to make the banking system safer by making it more modular. by saying, look, parts of the banking system may fail but we can't allow the failure of a single part it bring down the whole. and of course j.p. morgan chase was campaigning vigorously against the volcker rule and i think that demonstrated why it is such a good idea in the first place.
>> the book is called "adapt." the author, the man you hear speaking. tim harper. check him in the financial times. there's the book out on paper back. thank to the mega panel. he invite all of you to join us at 92nd street y in new york at 8:15. russell simmons with the topic, you guessed it, collective collaboration it fix america's problems. head to dylan ratigan.com for more details.