Black Box Thinking
Matthew Syed John Murray, Portfolio (in November), $27.95
Embracing failure is a cliché of the business world. Being open about mistakes is the route to improvement, goes the thinking. But as British journalist Matthew Syed writes in “Black Box Thinking: The Surprising Truth about Success,” a “stigmatizing attitude towards error” is the reality of everyday life. This has big implications. Success brings its own rewards, but the world comes down hard on those who are deemed failures. The desire to avoid such opprobrium prompts people to cover up mistakes, Syed argues.
Fear of failure can have devastating consequences. Syed tells a story about a United Airlines pilot in 1978, who worried that the landing gear had not come down as the plane approached its destination. Desperate, he tried to establish what was wrong, becoming blinded to the plane’s dwindling fuel reserves. Eventually the tank was empty and the plane crashed. The worry of making a mistake blinded him to bigger problems.
The story is a metaphor. Investors hold on to losing stocks longer than they should. Unable to face the shame of a bad return, they end up with a much bigger loss. The medical profession is especially intolerant of mishaps, Syed says. What to do? One solution is making it easy for people to own up or speak up, as the airline industry has learned to do better than any other. Syed’s more novel suggestion, though, is the rigorous testing of business strategies. This forces people to make improvements, he concludes.