« Freakonomics Radio

169. Failure Is Your Friend

2014-06-05 | 🔗

In which we argue that failure should not only be tolerated but celebrated.

This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
This podcast dynamically inserts audio advertisements of varying lengths for each download. As a result, the transcription time indexes may be inaccurate.
If you'd like to listen to free economic radio without ads the place to do that is sticker premium five dollars a month and you can get a free month trial by going to stick your premium dot com and use a promo code freak. You also get access to all our bonus. Episodes and you'll be supporting our show to that sticker premium: dot, com, promo code, freak thanks. Disappeared, hi, I'm getting Jacobs and I'm Deanna reason we ve got a new podcast called. If, then, when we basically talk to scientists engineers books from NASA just a bunch of really smart curious people about the cool stuff that they do, it then is out now just search if Slash said, to find the shell
that's if flash, then no spaces, listen instead, sure ass, all the serious ex em up or wherever you got your PA tasks. So, leave it you're a fairly successful fellow. Thank you. I'm just curious. Have you succeeded everything you ve ever done now have mostly failed at everything. I've ever done, particularly Definite golf gulf has been a lifelong failure. You know when I was a kid. I wanted to be a professional golfer and thank God that I was so bad
golf that I couldn't even imagine trying to be a programme, for I think one of the worst life you can have in some sense in the modern world is thinking you're good enough to play programme not being enough play broke up struggling for a decade or twenty years, and then you got nothin to show, but luckily I was so. It could even pretend found now. You also failed it becoming the kind of economists at you thought you should become when you first started, studying economics rank started out as a macro economist, wannabe and very quickly. I realized that modern macro is all about solving dynamic, optimization the trees, hopeless. Then I wanted to be an economic theorist and I actually that with more dangerous because I may occur we're almost there now I actually was able to publish some papers that we're pretty good in pretty good journals, but the thing that saved me, I'm being a micro economist, is actually a funny story which is there
One of my advisers at MIT I walked, hinders office undone, he said what you ve been working on days, any normal person would have said. Actually, my name is Steve, but I didn't do it and he called me Dave for literally weeks. Got so bad that at the annual party of the fact that students I gathered, and all of my friends said, look he's gonna call me Dave. Just don't worry! Finally, it is not that I thought I couldn't be a theorist. It was that I was so embarrassed and traumatized by the idea that simple and I was going to have to say to my main adviser- my name was actually Steve. Nash Dave after six months of pretending decided, I should disregard for our theory and go to something.
from W and my see, this is free economics, radio, the podcast that explores the hidden side of everything. Here's your host Stephen Abner last week's episode we talk about quitting, specifically the upside of quitting wires. You people so reluctant to quit? One reason is that we tend to equate quitting with failure and there's a huge stigma attached to failure, but should there be in our new book? Think like a freak, make the argument that perhaps we are not thinking clearly, failure. Maybe failure to be your friend I was Thomas students fail quickly. The quickly fail, the more chance you have to fail at something
us before you eventually, maybe fine things, you don't here's the thing when failure is stigmatized. Demonized people will try to avoid it at all. Costs even when it represents nothing more than a temporary setback, Steve Levitt, I freaked mimics friend and co author. He doesn't consulting on the side. He tells a story about one of his earliest consulting jobs with a big multinational retailer. This was affirmed, like many firms have had a very particular culture, and this was a culture in which, if you ever said anything bad about the firmer the prospects of the firm. You were a corporate you're, not a team player. This firm was about to open its first store in China in Shanghai, was pretty big deal and for all kinds of reasons. It was really important that store open.
So that, two months before the scheduled opening the ceo summoned, the leaders of the seven teams were involved in stores opening and he asked each of them for a detailed, a status report. All the reports were positive then? The ceo asked Paul seventeen leaders to pick one of three signals green light, yellow light or red light to show how confident they were that the Shanghai store would indeed open on time all seven went with the green, like everyone was so excited. They were completely
track for this opening. Two months later now, there was a very smart set of people, this firm, who completely understood how this culture, while helpful in some ways, was predicted detrimental another's, so they had set up an internal production market and they wanted people to be able to express their true opinions in the market, the sort of protection work. It is a great way to get people to tell you the truth, because its enormous and and because their actual assent of money incentives tied to it and it's fun. People like to win. It was a competition to see who could amassed the most money, buying and selling securities that were tied to the outcome of the fur and unlike stock market, which is not supposed to allow insider knowledge. This is actually the opposite right in a firm you're trying to get the best knowledge can from people who actually are working on the project. Exactly the firm had put this internal prediction market into place, exactly with the hope that they could learn the truth, but what was going on because they weren't sure they were learning. Otherwise, this prediction market offered one bet on whether the chinese store
it would open on time now, considering that all seventeen leaders involved in the opening had given the green light, you might think that everybody, the company, would be bullish. They weren't the company's internal prediction market showed a ninety two percent chance at the store wouldn't open on time. So guess who is right? The anonymous betters in the prediction market or the leaders who had to stand and from their bosses so even though the seven teams at all it were sure, were on track. Everybody basically knew almost for sure that there is almost no chance restored open on time, and indeed the stork did not open. What does that say about these? Seventeen leaders, who had to present to the ceo and their fear of failure, was at fear of failure. Was it a sphere of appearing that they're not doing their job well, had his failure factor and let you know it's funny, because in this case, value can be defined and in different ways and ultimately, they felt distorted, not
but could you pin that failure and any individual not really but its tricky, because the incentive em, who talk so much about incentives over the years and what kind of incentive them ivy there were some financial incentives associated with the desert? It wasn't yet. I think that what really was most- Lastly, is for you to stand up in the room and be the only one willing to say. I'm really sorry- and I know we ve been planning this launch for five years, but we botched it and we're not gonna make it, but there was no place. That so it's easy, especially from a distance, to criticise the seventeen leaders who told their ceo that they were sure the store would open on time from the sound of it. The ceo had what is called GO fever ever her to go fever,
the phrase associate with NASA having to do with rocket launchers. When a boss catches go fever, it can take a lot of courage to focus on potential failures. Just think of all the factors working against you lose momentum, institutional politics, ego and the consequences of go fever can be far more tragic then the delayed opening of a retail shop in Shanghai. Twenty, nothing counting here, come on out my crew, putting the elevator ready to depart the OECD Building or the launch pad. On January twenty eight nineteen, eighty six NASA was planning to launch the space shuttle challenger from Kennedy space. Cape Canaveral Florida. The mission had drawn massive public interest, largely because the crew included a civilian, a schoolteacher from New Hampshire, increased Mccall. If I'm so excited to be here, I dont think any teacher has ever been more ready to have two,
things in my life by the launch had already been delayed a few times on the mate, or the new launch date NASA a long teleconference call with engineers from Morton Fire call. That's the contractor that built the challengers, solid rocket motors Ok! Well, I, my mcdonnel Mcdonald was one of the five call engineers on site in it can ever at the time I was the director of the space shuttle solid rocket model projects for my company, Morton Thacker. It was unusually cold in Florida. There is a meteorologist in Orlando. That saying that these strong winds we saw today are being followed by extreme call front moving toward the cape and their expecting to see temperatures may be as low as eighteen degrees Fahrenheit tomorrow morning, at the opening of our lunch window- and I said good grief, ices, I'm really Turn that are already seals in these big joints will operate properly. Those kind adapters,
These o ring seals kept the extremely hot gases like six thousand degrees hot from escaping the shuttle. Boosters do not want those gases to escape the shot. Boosters, but as Mcdonald later described in his book, truth lies and oh rings. The boosters had never been tested below fifty three degrees and the forecast for launch morning conflict temperatures much lower than that. So on that teleconference call the night before the launch Mcdonald and his team recommended that launch be postponed again and at NASA immediately challenge the basis for such a recommendation, which really surprised me, because prior to that time. I had given every flight readiness review for every flights inside was put on the programme and I was challenged at every one of them of making sure that I could say it was safe enough to flight and he
you're all of a sudden we recommended not fly. And they challenge the basis for that Mcdonald couldn't believe NASA wanted to launch, despite what he saw, is an obvious risk. I was amazed that they made such statements because we always err on the side of safety. In fact, the engineers got put into a position to prove that it would fail, and they could not do that. That's all different question. According to Mcdonald, his boss, Beckett Morton vehicle headquarters in Utah, got off the NASA conference call for about thirty minutes. Talk about the situation with other fire call executives when he got back, I'm a line. Mcdonald says the recommendation to postpone the launch had been reversed. Mcdonald was angry, but he'd been overruled. The launch was back on now. NASA requested that the responsible, Morton Fire call official sign off on the decision to launch. I knew
who that responsible, firearm official was. That was me. That was my That was my responsibility. That's why I was whereof there and Did the smartest thing I ever did in my entire lifetime, and that was I refused to sign the launch recommendation, as a result of that my boss, had to sign it and send it down to me which he did by fax machine, as the engineers are waiting for the facts. Mcdonald spoke up again so then I got mark a stranger is well. Let me tell you some. I certainly hope nothing happens tomorrow, but if it does, I'm not gonna be the person to stand before a board of inquiry, explain why I gave you permission to fly the Solid Rock motors condition that I knew they were never qualified to do
coming up on economics, radio, you know happens next morning. Don't you here. What do very carefully and situation? a major malfunction, the only thing I saw fly or the solid rock boosters. They were still going everything also disappeared. This huge explosion cloud Tina, and what, if you could learn how you might fail without going to the trouble of actually failing, leaned back in his chair. It yourself com just a little bit dreamy. I don't want any daydreaming, but I just want you ready to do anything about it.
Fr Economics, radio is supported by zipper. Creetur businesses have had to be flexible this from working remote. We too pivoting their business models for long term survival. If you are in charge of hiring for your business. These pivots have made your even more challenging, thankfully theirs. One place that you can count on to make hiring easier, zip, recruiter, dot, com, flash freak, zip, recruiters technology finds the right people for your job and invite them to apply its. No wonder that four out of five employers who post Unzip recruiter, get a quality candidate within the first and right now you can try zip recruiter for free at zip, recruiter, dot, com, slash freak, that's zip, recruiter, dot, com, slash freak yet,
hi I'm guilty and Jacobs and I'm Deanna reasonable? We ve got a new path task called if that worry politically talk to scientists, engineers NASA folks, just a punch of really smart curious people about cool stuff, Julian. I think most people know you from your work on love and community, and most people would know you as friends, EC scientist Casey Heinz on Anti I ass, so we were both. But what most people don't know is that we're both really curious and passion? about stem, if we have a more the first outlook in how we look at science and engineering and technology and map, then what, this is possible. I gotta go when I get to speak to these people, get a chance tat back into my curiosity excitement. You know that I have a kid about all these topics so come on this journey with
as we learn from some of the poorest smartest people in their fields. If, then, is out now just search, if slash than to find the show that, if slash then no spaces, listen in stature, apple, the serious Ex m F or wherever you get. Your PA casts from W and Y see, this is for economics, radio, here's, your host Stephen governor. So Alan Mcdonald was the director Space shuttle, solid rocket motor project for Morton Fire CALL, the company work with NASA on Challenger Shuttle launch the night before the launch Mcdonald recommended the one. Be delayed out of concern that the shuttles o ring seals might fail in the unseasonably called Florida weather, but Mcdonald was overruled the next morning. He walked too
control gang may verification, one hand had said the other and there it was like twenty two degrees I saw these icicles hang all over the place, and I said I myself have. They obviously have been launched. This thing today and I was amazed- they finally came on said they were gonna- send the team steam out to see if they could knock the ice down as much as possible to reduce the debris is risk. They did. They ended up doing that actually twice before They finally wind tunnel car and launched the challenge I'm a Dublin. We Main engine start, and I remember I held my breath three two one and the money that they subtle measure man. It is clear that power.
Twenty nine hundred per second attitude nigh nautical mile divested of seventeen. Seventy three seconds later, to see this thing blow up the sky. I was in sharp eyes it blew up my saint, just like everybody in the control room, and I could hear people sobbing the background. You're looking very carefully at the situation. Obviously a major malfunction, hearing this voice over the network. Saying archaeology start tls, which is return the launch site not getting response back from the arbiter. The only thing I saw a flying with a solid rocket boosters. They were still going everything else that disappeared. This huge explosion cloud
many pieces report only by dynamic vehicle exploited by director that we are looking at the checking, whether reporters to see what can be done at this point. No way they can survive that in my opinion, and that they didn't. Obviously, at that Point Mcdonald says, the cause of the explode was unknown were tall. Do not copy anything off the screen. Hurrah frozen, they lock the doors they cut off. Telephone lines. So nobody could talk to anybody. The meeting, saying that all the data will be considered secret agenda.
He wasn't until the next day that I already realised what had happened in the days after the accident Mcdonald says a review of the data showed the cause of the explosion to be what he had feared might happen. The o rings failed to hold their seal in the cold temperature, That's exactly what happened! This cause was later made official by a presidential commission, to which Alan Mcdonald contribute testimony in the televised portion of the hearings. The physicist Richard Feynman famously demonstrated the cause of the failure by dropping the o rings into some ice despite that, I got out of mercy and I put it nice one, I discover that when you put some pressure on it for a while and then do it maintains it doesnt stretch back its day the same dimension. Another word for a few seconds at least more cycle
there's no resilience in these particular material when a temperature- thirty two degrees I believe that has some significance for our problem. Now, of course, Ellen Mcdonald's already knew that are least that's what he was worried might happen, and that's what makes the challenger explosion so remarkable and even more tragic than it was the people in the know me. Some of them had foreseen the exact cause. Of the failure, so why? Even with that warning, did NASA push on? What really happened was typical. I think in large bureaucratic organizations and in any big organization were your frankly. Trying to, be hero and doing your job and ass. I had two strikes against it from the start, which One of those is they were too successful. They had
I didn't buy for a quarter of a century now and never lost a single person on the space which risks very hazardous thing to do and they had rescued the appalling Thirteen have waited the moon when part of the vehicle blew up seem like it was an impossible task, but they did so, how could this pole lowering cause a problem when they had done so much over the past years, to be successful, so gives you a little bit of arrogance. You shouldn't have and huge amount of money involved, but they hadn't stumbled yet and they just pressed on so you really had to quote prove that it would fail nobody, to do that You might think it's a rare case when a group of decision makers no with such precision just what will go wrong with the project, but is it what? If
were away to peek around the corner on any project to see if its destined to fail if you can learn how you might fail without going to the trouble of actually failing I'd like you to meet very climb. I'm cognitive psychologist. I got my phd back in eighteen. Sixty nine experimental psychology Klein's most recent book is seeing what others don't the remarkable ways we gain insights. He studies decision making especially help me make decisions in real settings like the challenger launch The challenger incident has been intensely studied and serves as a wonderful object lesson in what we say I hear was repression of consequences that you you didn't have to deal with, because would have been so inconvenient so We make the argument in our book that there's a
a general reluctance to quit or to untangle herself from projects or relationships or what not and that that's in part because- Failure is seen as such a stigma. No one wants to. We don't want to quit, because we don't wanna be seen as having failed, and so let's talk first of all about the stigma of failure. Do you think it deserves it or do you think we should rethink the way we consider failure generally, while the two hundred line is there dumb? You fail often to get smarter and you fail in. Doktor of ways and it's a way of building mental models and all, Those things are true
so how can failure be made more fruitful? Gary Klein has one idea, which I think is pretty brilliant: it's called the Pre Morton. You have surely heard of a post mortem, that's a process by which you figure out what exactly killed, say: hospital patient or maybe a big project. Theoretically, everybody benefits from knowledge you gather during a postmortem, everybody except the patient, was the patient is dead. For free modem is to try to run through that process before the patient dies, but the patient in this way we should say, is not a human, but it's a project or a product, or something like that correct exactly exactly with Pre Morton, You try to find out what might go wrong before it goes wrong. How does this work Gary Klein will walkest Imagine you work for a company is about to launch some big project that,
you and a lot of others been working on for months, maybe years, but before you launch Klein, gathers all the important team members in a room you to be in a relaxed state of mind. So late back in your chair. Get yourself calm and just a little bit dreamy. I don't want any daydreaming, but I just want you ready to to be safe from the bad things, and I'm look in a crystal ball and the image in the crystal ball is a really ugly. This is six months effort we are now. A three months into the effort and its clear. This project has failed There is no doubt about it. Where there is going to succeed Looking at another seen a few months later, project is over and you don't even
to talk about it and when we passed each other in the hall you don't ever make eye contact? Is that painful okay? So this project has failed, no doubt about it. Now, for the next two minutes and I'm gonna timeless and the next two minutes, I want each of you to write down all the reasons why this project has failed. We know it failed, no doubt right down, why it failed. I keep a strict clock because we don't wanna too, are too much time on this and I area. But he is writing, and I say this seconds to go near writing faster Christie, trying to get everything in a now five seconds and then ok finishes sentence and then pencils up
now climb would go around the room and ask for one item from each person's list and they compile a catalogue of all the ways the project might fail. Klein calls this perspective hindsight What is it accomplish, really reduces overconfidence and people are usually way too confident of beginning of a project, so the pre mortem tempers that overcome Now climate ask everyone in the room to think up. One thing they could do to help the project. Around the room to see what people are planning to do that they hadn't thought of before to try to make more successful, so you happy ending on a potentially sad story, exactly ass, we were trying to do without sugar coding the problems that their faces. Now. Here's an obvious question. If you are running a primordial
and everybody involved with the project is able to come up with a few ways in which the project might fail. Why are these potential problems on the coming up? Now, when the project is about to launch Gary Klein says it's because the pre mortem liberates people who might otherwise be afraid of Looking like they're, not a team player, because now everybody is being asked to think about failure. So, instead of looking like a bad time, You are pulling in the same direction as everybody else now that demand characteristic is show me how smart you are Ah me how clever you are and how experience you are by identifying thinks that we need to worry about. I'm curious to know. How well pre. Mortem is catching on because I feel like whenever I describe it to
of people small or large, their blown away by they love the idea, and very few of them have heard of it. So I'm curious for an idea that sounds so great sense of practical. Why has it taken over the rolled a bit. More is very kind of you than I am not entirely sure I think one reason is: we have not gone out of our way to publicize it. This is just a kind of activity that grew up out of in practice, and we would just doing it internally and after we would do with a few project, managers and sponsors, and they said, can you use with some of our other projects, even though you're not involve so I sort of sea it the other way, I'm surprised at how many people are used. I hear about people using it, I've never in a no nobody ever mentioned to me. So I'm impressed that has gotten his
my apologies, it has I went back to Steve level with a couple of questions Why do you think of such a stigma? Associate with failure? Generally, I think to be willing to accept failure. You have to have self confident that term. You have to be accepting of the idea that
failing, isn't it doesnt defined? Who you are failing, get something out of the way that keeps you from finding the thing that you're actually going to be good at, and I mean like we're spoiled way you and I both of stumbled onto a lot of success and is so much easier to be terrible things into admit your terrible when, in other parts of your life you get rewarded and people write letters and say your gray. I think it's easy for us to accept value in and honestly, I think I've gotten much better as I've gotten older. At being ever laugh at myself. I was really in secure for a long time. I want to show people is bad, but I think I've got a gun I mean I offer will laugh. I, when I do stupid things, I left the hardest. So what's a strategy, a fear this YO or fear another ceo, even if you the ceo of two percent operation. Listening to this, what is the strategy to encourage people to acknowledge that failure may happen and that we'd be much better off dealing with the failure
before him and after I think the only credible way to make failure acceptable is to celebrate failure. I know my little firm did you do the greatest good? We had our greatest failure actually turned out to be our greatest success. I think in terms of rail building Winna, let s give a speech on our clients and dumb. I told the truth in that speech and it led to our being fired the very next day the executives of the company did turned out weren't that interested in hearing the truth and unceremoniously through email. We were fired from one of our biggest account and dumb. The thing was that we celebrated like that. Just pretend celebrate. We really celebrated, because our view was there's no point in staying up all night working on projects for clients, if they don't appreciate, if they don't want to hear the truth
then how in the world we want to spend our life doing this work and what happened was that people at at our little firm? I think they would have thought we'd be upset and it wasn't me the other people ran firm, we couldn't have been happier and we broke up beer and wine. We celebrate the fact that one of the biggest companies in the world had decided to fires, because we told the truth- and I think in a one of the things that you and I have really come to believe over time- is it's really not for most people about money is something bigger than did that if you're gonna work hard and do something about the pride in the joy of feeling, like your part of something bigger something exciting and the folks who worked at our local tilting, I'm actually felt that day that it was about something bigger than we were about the truth. We are about doing good work and an it's hard to do in a business setting but there was an hour to grant MR nobody's gonna magical.
A package of measures on the next week and I'm afraid you time to the World CUP, which means that every sports fan in America, putting my thirteen year old Son, tries to get excited about soccer. What socket you dont? Let me say the word soccer. Do you know? I didn't you hear from football fanatics, including Andrew Luck, quarterback for the american Football team, Indianapolis colds. We asked him what it would take to finally turn the who s into a pretty loving nation, a bit more of a pipe piper would be a? U S. National TV one in the World CUP materialise. We go. We love winners in this country, world CUP fever, and why we don't catch it. That's next time and finance radio.
Freak anomalies, radio is produced by W and why see and Dublin productions, our staff includes David Herman Gregg resolves ski gretta, cone, very Lamb, Susie Electing Burke and Chris Bannon, with engineering help from Jim brakes. If you are more frequent, comics radio, you can subscribe to a hot cast on Itunes or go to friggin mixed up real fine lots of radio, a blog, the books and more
Transcript generated on 2021-03-13.