“Mistakes are the portals of discovery,” wrote James Joyce in “Ulysses”.
In 1888 Lee Kum Sheung, a young cook in a coastal province in southern China, forgot the oyster soup he was boiling on the stove until it simmered down to a thick, sticky gravy. Once he discovered how tasty it was, he decided to sell his “oyster sauce” in jars. That lucky mistake would make him and his heirs rich. According to Forbes, the Lee siblings—his great-grandchildren—are worth $17.7bn, making them the fourth-richest family in Hong Kong.
Occasional failure may be the price of innovation. Within months of the Amazon Fire smartphone being introduced in 2014 it was clear to all that the device was a resounding flop, with Amazon forced to write off $83m of unsold inventory. The device was late to the market and had limited features, but was nonetheless priced in the same range as the iPhone and the Samsung Galaxy.
Jeff Bezos, the tech giant’s chief executive at the time, would later argue that such misfires were the cost of an organisation relentlessly focused on continual innovation. “If you think that’s a big failure, we’re working on much bigger failures right now,” he said two years after the fiasco.
Amazon’s market value today is around 15 times what it was when it made its disastrous foray into phones.
In “Right Kind of Wrong”, Amy Edmondson, a professor at Harvard Business School, explores how to build a healthy relationship with failure. In a complex world, she argues, excellence requires taking risks. The important thing is to establish what needs to be done differently next time.
In her book Ms Edmondson argues that neither people nor organisations can learn if they deny that an error has happened. Instead, failures need to be carefully and dispassionately examined. That may mean having a process in place to signal when things have gone awry.
Drugmakers, too, have processes in place to learn from failures. Ms Edmondson describes the example of Eli Lilly, today the world’s most valuable drugmaker. After the firm discovered that a chemotherapy drug called Alimta it had spent vast sums developing was unsuccessful, the physician who conducted the trials pored over the results to understand what had gone wrong. He spotted that although some patients had benefited from the drug, those with a folic-acid deficiency had not. Simply adding supplements to the drug in subsequent trials made Alimta go on to be a blockbuster.
You cannot error-proof a career or a company. And if all else fails, a bit of perspective might help. Although it may not feel like it at the time, your error will probably not make the list of history’s most notorious howlers.
In 1867 Russia sold Alaska to America for $7.2m, around $160m in today’s money, handing 1.5m square kilometres of oil-rich territory with access to the northern rim of the Pacific.
Few blunders in business are quite as dunderheaded.