With so much interest in the “How to Fail: 25 Secrets Learned through Failure” post, I thought it would be valuable to revisit the lessons to point out underlying themes. Perhaps eventually we’ll be able to condense the twenty-five lessons (thanks for Matt for the thought)…

One of the core lessons behind “How to Fail” concerns our quest for optimization; we regularly grossly misjudge the costs and benefits of attempting to optimize our decisions. We use too much data, spend too much time planning and misjudge the opportunity costs of optimization. We regularly analyze data, structure decisions and make plans without benchmarking our past decision-making processes and results. We spend too much time answering the questions we know and too little time considering what questions we aren’t asking. Far too often we make unrealistic and unpractical attempts to foresee the future; even worse is that we create create plans without the flexibility to make easy changes or the redundancy to survive.

We regularly over-optimize even though we are usually wrong at predicting the future; and we attempt it again, and again, and again.

We are seeing the results of over-optimization crop up in the current economic environment: over-leveraged businesses, over-leveraged consumers, short term decisions and quarterly-focused profit maximization, all shaped by our incentives to optimize and the timing misalignments between risks and rewards. [1] Our attempts at local maximization create global minimization.

Can we develop better guides and practices to help us identify over-optimization? Can we learn from our mistakes?

I’m trying to learn from my mistakes and heed my own twenty-five lessons. In your experiences, what would be your #26?

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[1] I’m not saying it’s the ultimate cause, just one of the factors….

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How can you read “How to Fail”?

• Read on the web.
• Read (and download) the PowerPoint presentation on Slideshare.
• Download the eBook PDF.

Also…

• Just two more days to vote on my “Questions, Answered, Again” project.
• Right now I’m posting a series on the future of the photography business on my other website. The first two posts are up: Five Lessons: How Photographers Can Create New Business Models and Lesson 1: Photographers are your customers, not your competition.

As always, if you want to get updates on this projects and others, follow Unstructured Thoughts by RSS (as posted) or Email (max once daily).