How to Screw Up Your Way to Success

Over the past 10 years, the concepts of risk taking, failure and mistakes have been in vogue. In a business world where better and faster reign, trial and error — not necessity — have become the mother of innovation. I’ve even heard venture capitalists say that they are more likely to invest with entrepreneurs that have failed because “you can’t grow unless you make mistakes.” While these ideas are not new, they have grown to a fever pitch lately. I suspect it has something to do with our culture becoming more flexible (think about how many times you heard the phrase “work-life balance” before the mid-1990s).

If failure and making mistakes are necessary to grow and innovate, how can we do it without going out of business?

I think Marc Ecko, the subject of this month’s cover story, has it right. Ecko said you need to plan for screwing up. He even goes as far as allocating a line for screwing up in his budget. As he says, you could call this line item “screwing up” or “contingency.” Just don’t label it “miscellaneous,” which should really represent expenses that you have not thought of or that do not fit into a category but are too small to warrant categories of their own. In addition to planning for the financial impact of mistakes, you need to have a culture of allowing, or even celebrating, failures. You could do that easily by celebrating risky decisions that didn’t work out. Talk about what you as a company learned from these risks and how you can build on those lessons.

One last thing: Before you go and tell your team to start screwing up, let’s be clear on what constitutes a positive and negative screw-up. Positive screw-ups occur when you take a calculated risk to try something new. Bad ones are due to things like not double checking work or not exercising common sense. Reward good ones, punish bad ones.