Everyone probably has heard Benjamin Franklin’s sage advice: “By failing to prepare, you are preparing to fail.” It has a corollary: “By failing to prepare for failure, you will fail.” This has been an underlying theme in several of my columns: this one; this one; this one; and this one. You should take this admonition to heart. Why? I can point to many projects that ran into the ground because they were conducted sequentially as if every little decision made today didn’t affect those made in the past.
Warren Buffett is famous for his solid advice on many matters, including planning for failure: “Risk comes from not knowing what you’re doing.” “Failure comes from ego, greed, envy, fear and imitation.” And, “It takes 20 years to build a reputation and five minutes to ruin it.” Buffett certainly isn’t alone in offering good advice on planning. Admiral Hyman Rickover, the father of the nuclear navy, put it succinctly: “Success teaches us nothing: failure teaches.” For more sound advice from him, check: http://goo.gl/lxb5MT.
Because I’m in the business of giving advice, I’ll add some pointers of my own. First, planning is only a small step in the right direction. As Buffett notes: “Predicting rain doesn’t count. Building arks does.”
Here’s one tip from me: Appoint a committee at the conception of every major project to review choices made during the design and grade them by risk. Then, establish resources for countermeasures against risks deemed significant — which I consider ones that can delay commissioning more than 12 hours or cost more than $200,000. Set your own standards, if you like. For a small project, say one under $100,000, have another engineer review your project for risk. This may not suffice to avoid failure, though, especially if management doesn’t support planning to fail.
Here’s another: Encourage an environment where people feel free to challenge a design basis. Rickover recalled an admiral who wouldn’t promote a subordinate because that person didn’t query the admiral’s actions enough. Part of the reason why companies hire smart people is to question conclusions. If your company fails to meet schedules and frequently over-runs budgets, perhaps it’s because the corporate environment punishes people who criticize project details. Or, as Rickover once said: “The devil is in the details but so is salvation.” The human resources (HR) department should actively evaluate manager performance on projects and product development — and I don’t mean after the fact.
That brings me to my next suggestion: Conduct post-mortems. Even the most successful projects — the 30% that actually meet the original scope, budget and schedule — can provide examples for improvement. The committee reviewing the project ideally should include representatives from HR and upper management. Take a page from the co-founder of Sony, Akio Morita: “I believe one of the reasons we went through such a remarkable growth period was that we had this atmosphere of free discussion. Be frank and honest, not kind, during the post-mortem for a project that was really fouled up! Try to find the root cause of mistakes in design, construction, commissioning and hand-over.
As with many things, timing is important. Don’t delay the post-mortem until a year after production starts. Instead, perform it after the process has been running for several weeks; this allows observation of issues in reliability, corrosion, product quality and production capacity.
The need to plan for failure applies not just to established companies but also to startups, as a relatively recent article in Entrepreneur magazine “Why Entrepreneurs Should Plan for Failure, Not Success,” underscores.