Adapt: why success always starts with failure - a review

This book, which has been described as groundbreaking, actually boils to down to a set of rules for dealing with complex problems defined by a Russian engineer at the turn of the 20th Century. His name was Peter Palchinsky and he was inspired by the failure of the burgeoning Communist rulers of the time to address severe industrial problems. He came up with three principles for successfully dealing with complex problems, specifically ones in which people are involved and which can change (or evolve) in response to circumstances:

1) Seek out new ideas and try out new things
2) When trying out new things, do so on a scale that makes failure survivable
3) Seek out feedback and learn from your mistakes on the way

The first and the third principle are relatively self explanatory, though the apparent simplicity can be deceptive. In general though, new ideas and feedback are things that allow themselves to be found if you look hard enough. So we turn to the the second of the principles; making failure survivable. The best way to safeguard this is to ensure that the failure is not catastrophic. The characteristics of a system that lead to catastrophic are: complex and tightly-coupled.

A complex system can be defined as any system where the link between input and output does not follow an obvious pattern of cause and effect. Drop a pen from the table and it falls to the floor. Use that same pen to write a scathing letter about (insert your favourite rant here) to the newspaper and you can't predict what will happen. Maybe the letter will get published, strike a chord and start off a chain reaction; it could just as likely end up in the editor's wastepaper basket.

The definition of a tightly-coupled system is one in which it is extremely difficult or impossible to stop the process once it has been started. Mix flour, yeast and water together and pretty soon it will begin to rise.

So how do you prevent complex, tightly coupled systems descending into catastrophe? Well, decoupling is one way. The best example given in the book is the domino rally where millions (the world record stands at almost 5million) of dominoes are lined up. The system is indeed complex and tightly coupled and in fact designed to fail: once the first domino falls, the intention is that all the dominoes fall. The problem is that you don't want them to fall over by accident, so they build in removable safety gates. That way if one section gets accidentally knocked over, the loss is contained to a few tens of thousands of dominoes, which while not being exactly painless, is still survivable.

So now we know about failure, or rather how to make failure survivable; what about success? Harford then shows us a curious anomaly about successful companies; they tend to fade away when new technologies supplant them. The reason is that they are so focused on developing and delivering existing technology to existing customers that they are not responsive to the itch caused by the small numbers of customers demanding new technologies. A telling example is Kodak who were a major producer of film photography consumables. When digital cameras came along they were at first largely ignored due to the image superiority achieved with film; my first digital camera bought in 1999 managed 1 megapixel. Now a little over ten years later almost no-one buys film anymore;, Kodak went out of business along with Polaroid. These companies had their eye on the ball, but the game changed. The ultimate irony is that film photography has now become a niche market.

This leads me on to a conclusion that wasn't really made in Harford's book. Peter Drucker concluded that a company has only two aims and no more than two:  to create and exploit markets in which to sell their products and to innovate. Adding this to Harford's story I would conclude that companies (in particular) need to expend energy in invention and refinement of existing products and markets, but also in innovation in seeking out new markets and new products and technologies. This satisfies both of Drucker's criteria; the Palchinsky principles give us the framework in which to carry out both invention and innovation.