You don't have to learn everything the hard way

I went to Atlanta recently and on the plane read "Billion Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years" from Paul B. Carroll and Chunka Mui. I think we learn more from studying disasters than we do from best practices, and I loved the book. Why did Kodak fail? Why did it not understand the threat from digital cameras? It thought the future would be a variant of the past. So, it shored up what it already was doing and already was comfortable with: film. Recall Motorola and its $2.5 billion dollar loss on the satellite phone system Iridium? Carroll and Mui say the company fell victim to the availability bias -- our minds go to facts that are the most available (because they are vivid, recent or told as part of a powerful narrative) and give them disproportionate weight. The execs at Motorola had done well in the past with grand engineering projects, so why should this one be any different? These grand projects became part of the Motorola narrative. The authors say, "Narratives can be dangerous because they tie up facts in too neat a package or make causal links that aren't really there." These lessons apply not just to business but to firms and individuals. Give the book a read.