"What’s happening guys? I've lost this race, haven’t I?"
– Lewis Hamilton at the Grand Prix of Monaco 2015

Mistakes happen in any organization. Especially young and fast-growing companies are prone to them, for startups often move in extremely dynamic environments. The opening quotation should be read in this context, as modern Formula 1 racing requires high-frequency decisions on behalf of the racing team – under heavy time pressure and based on incomplete information. A situation just like in everyday startup life.

That afternoon in Monaco, Lewis Hamilton had to learn what mistakes can entail. Shortly before the finish he was clearly leading the race and turned into the pit lane during an unexpected safety car phase. This team assumed that his lead was large enough to change tires and still remain first. Indeed, Hamilton came back in third, had no chance to overtake and therefore missed a safe and prestigious first place.

Mistakes lurk everywhere

First of all, this incident shows that even the world’s best teams make serious mistakes. After all, Hamilton’s Mercedes AMG F1 team is not only reigning world champion, but also well equipped in terms of funding and manpower. In a high-performance environment it’s often the number and quality of mistakes that lead to the podium or to a premature end of the race. Not only race teams work in such environments, but also companies in their respective markets.

That’s why companies must ensure that serious mistakes are not repeated. To this end, there are basically three strategies: 1. Ignore the mistake and hope that it doesn’t happen again. 2. Find someone responsible for the mistake. 3. Learn from mistakes. Strategy 1 is apparently the easiest one to implement, but not very promising. But when should you choose strategy 2 or 3? Or implement both?

No use in seeking a single culprit

"What idiot has caused this pit stop?" Most of the audience might be wondering that, as it was clear that Lewis Hamilton would have won without the final pit stop. Identifying the person responsible for the mistake is a strategy often used, but it has a serious drawback: it implies that a single person is actually the cause – which is almost never true. This in turn prevents the actual cause from being determined. Measures to eliminate future mistakes are therefore limited to discouraging the supposed culprit from repeating his or her misbehavior. Depending on the organization, this is implemented either by training or firing the "responsible" person – often with unsatisfactory results: a training is often impossible for complex or novel issues. And firing one person is no guarantee that the next person will not repeat the same mistake in the same position.

Focus on the gearing mechanism

To learn from mistakes is certainly the strategy with the greatest benefit. However, this approach often requires surprisingly hard work. It’s because learning from mistakes consists of two phases. To start with, the entire chain of causes and effects needs to be understood, which is often difficult: on the one hand, young companies don’t have their processes documented and therefore, they must be found out about. On the other hand, most cases involve complex technology whose operation must also be found out about. This means that learning from mistakes is in fact general learning; namely learning all the mechanisms and processes that have led to the mistake.

The second phase is no less difficult: one must identify the very link(s) of the chain of causes and effects that has led to the mistake – and modify it to prevent the mistake from happening again.

Troubleshooting expertise as a competitive advantage

Even though it’s human behavior: the search for a single culprit leads nowhere. You will certainly find someone, but in most cases this helps little in avoiding similar future mistakes. And searching for a culprit gets more problematic every time it happens, because it leads to a culture of people pointing their finger at others.

Finding the deeper cause for a mistake isn’t easy and requires a great willingness to learn. But it’s worth it: you get a better impression of the processes and challenges of your own business. Who is good at finding a method to avoid mistakes sustainably might outrun the competition.

PS

If you’re curious what led to Lewis Hamilton’s pit stop, the (rather complex) analysis can be found here.