The cost of our mistakes – can we really pay it?

Cost of our mistakesLately we hear a lot about all kinds of mistakes made by people around us: investment mistakes, foreign policy mistakes, personal relationships mistakes and so on. In many cases we find it very easy to identify ourselves with the heroes of the story because we made similar mistakes or were about to make them. Nevertheless, why did the subject of making mistakes become so popular?

The reason for that is very simple: today we are much more aware of the costs that those mistakes impose on us and on our environment after we make them. Seeing how giant corporations and massive capitals had dissolved in a second, we know that everyone is accountable for the mistakes they make. Today we know that IF SOMEONE MADE A MISTAKE – SOMEONE IS GOING TO PAY FOR IT! And because everything around us is so intertwined with each other, even when we are not the ones to pay the direct costs of a certain mistake, there is always the chance to suffer the indirect costs of the problem created by them.

So, in order to help you get rid of some costly mistakes in your life, Anyaworksmart is going to discuss the subject in a series of posts, with the first one dealing with the most basic of questions: “How much are we really paying for our mistakes?”

Let’s start with a recent example that still echoes the corridors of US Military – the rising costs and the technical problems with the introduction of what was supposed to become “the most advanced piece of military technology” – the F-35 “Lightning” fighter aircraft. To make the long story short for those of you who never engaged themselves with military affairs, the program overextended its budget and timelines by so much, that its volume is now being seriously reduced, with many international partners exiting the program and canceling their orders of the new jet for their military.

Now, as sad as it all may be, we see a lot of similar cases in every industry, with everyone around experiencing the need to close projects that already consumed a lot of precious resources. So what makes this case so special?

You see, the F-35 program wasn’t completely closed, so it may seem that all the planning and production mistakes made by the sides involved will be measured only in money they’ve spent. And this is not that bad, because if some problem could be fixed with money – it could be considered not a problem, but an investment :-), especially that in military industry the length of the project is actually viewed as a good thing, as no one can be sure that there would be any new project to work on after this one is finished.

However, as I already mentioned in my previous posts, the military world functions in a much more demanding environment than the corporate world, with every single step, even something as basic as ordering new equipment, being closely watched by the adversary. And in case of the F-35 program, the damage on this level was TOTAL, practically making the whole program obsolete in a single moment. Because introducing something as “the most advanced weapon of its kind” has any actual meaning only if everyone around, both friends and potential adversaries view it as such! But if everyone around knows instead that the whole project is flawed with multiple problems (each of these problems resulting from a mistake made by someone at some level), they arrive to a decision that this weapon has no real deterrence value, and is, to put it bluntly, completely useless to anyone who has it.

Now put yourself in the place of the executives charged with completing the program as it is now, desperately trying to cut costs and reorganize in order to deliver something in the end. How would you feel if you knew that because of the mistakes made before, nothing you will do from now will have any real impact? Yes, you can spend some more money in order to equip your Military with the new jet, but the jet itself is now useless because it can’t dissuade your enemies from messing with you (which just happens to be the main characteristic of military strength). In the end, you’re left with a very expensive toy nobody needs.

And this is the moral of the story, from my point of view. When planning our activities, we dare to think that we understand the possible costs of mistakes we can make at different stages, such as planning or implementation. However, as we learned while discussing Biases, mistakes may accumulate to the level that our load becomes completely unbearable, and out losses, therefore – unacceptable. From this perspective, there is not much difference between the Military and the Corporate worlds, with our situation actually being even more demanding, because we also have to help our companies to remain profitable, making some real money from the projects we manage. Most companies cannot plan their activities based on assumption that someone will come to save them if they took a wrong turn. So remember: A SMALL MISTAKE CAN EQUAL A REALLY BIG PROBLEM!

In my next posts about the subject of “making mistakes”, I’ll talk about the most common mistakes Managers make in their work, why they make them, and what can be done in order to minimize their impact, so stay tuned 🙂

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2 thoughts on “The cost of our mistakes – can we really pay it?

  1. Anya, I’m not sure I agree with your assessment that there is a greater awareness today as much as the fact that information flow much faster and wider than in the past. Unfortunately cost overruns in major infrastructure project are not uncommon (see for further references Bent flyvbjerg’s research into failed infrastructure projects).

    Cheers, Shim.

  2. You are competely right, Shim – there are still a lot of mistakes
    being made, especially in cost estimations of big projects.
    What I meant by growing awareness is, regrettably, not an actual improvement in planning and management of projects, but growing discussion about the quality of our decisions and how they influence the results of our work.
    Hopefully, as more people will become aware of possible costs of their mistakes, we will see some improvement.

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