Last week the chief executive of UBS told all the bankers who work for him that henceforth it was OK for them to make mistakes. A culture in which everyone was petrified of taking risks, Sergio Ermotti said, was not in the interests of the bank or its clients.
How mature, came the response. How refreshing to hear a bank chief acknowledge that risks need to be taken and honest mistakes will sometimes be made. But it wasn’t mature. It was mad.
In a limited sort of way what he said made sense. The main point about risks is that they are risky — and risky things have a way of going wrong. Places where people get a bollocking for making the slightest slip tend not to be where the best decisions are made.
Yet the answer is not to tell bankers that it is fine to screw up. Mistakes are never OK. And they are particularly un-OK in banking.
If I were a UBS client, I would be exceedingly displeased to learn that the bankers to whom I was handing over a king’s ransom were being taught that errors were perfectly acceptable.
This mistake-loving nonsense is an export from Silicon Valley, where “fail fast and fail often” is what passes for wisdom. Errors have been elevated to such a level that to get something wrong is spoken of as more admirable than getting it right.
One company that dares to be different is Amazon. Among its values is the seditiously sensible notion that its leaders “are right, a lot”. Far from stifling innovation, this seems to have done the reverse. On the 2015 Forbes list of the world’s most innovative companies, Amazon is number eight.
Facebook and Google, which have long talked about the marvellousness of failing, are not on it at all.
The glorification of failure is based on a couple of psychological misapprehensions. The first is the idea that we learn from our mistakes, when there is no evidence of anything of the kind.
I certainly don’t learn from mine. I keep buying uncomfortable shoes, each time thinking I will wear them in. But they go on being uncomfortable, and I go out and buy more that pinch just as badly.
The world is full of people who go on making the same mistake. Men marry the same sort of unsuitable woman. Most of the journalists I’ve ever worked with display extraordinary loyalty to their particular brand of mistake — they are endlessly inaccurate, or endlessly prone to cliché.
A study a few years ago by neuroscientists at MIT showed that monkeys learn much more from getting things right than getting things wrong. When rewarded for making a correct choice they remembered it and could repeat it, but after a wrong choice they remembered nothing.
The second fallacy — which UBS has fallen for — says that fear of making mistakes paralyses us, so we must make them seem less scary.
The experience of Henry Marsh, one of Britain’s best neurosurgeons, shows this is nonsense. He has to take mistakes seriously as when he screws up people die. Far from consoling himself with the thought that honest mistakes are fine, he has written a book, ‘Do No Harm’, cataloguing all his errors in goriest detail and making each one appear as un-fine as possible.
Yet even with mistakes cast as catastrophes, Marsh has not been paralysed. He admits to feeling dread before every operation, but once he gets started he feels a “fierce and happy concentration”.
Nor is there any sign that his proper dread has stopped him taking risks. Instead he has pioneered a brilliant and daring system, in which patients are kept awake while he rummages around in their brains.
He catalogues his failures not in a Pollyanna-ish attempt to show how much he learnt, but simply as a fact of life — and death. It is as if the mistakes have become part of him, and have made him the person he is.
Equally the mistakes we’ve made make us the employees we are. I haven’t killed anyone through my work, but I have harmed them. I often write about people anonymously in my columns, but sometimes they recognise themselves and they feel rightly hurt.
Each time I have failed to disguise them well enough, or have misjudged their reactions.
Yet far from learning, I go on doing it. I never think: honest mistakes are OK. Instead I remember all the people I have wronged and wear them as a guilty badge. It might not make me a better journalist, but it makes me more clear sighted about what I do for a living.
What Ermotti should have made clear was that sometimes his employees must take risks, and sometimes things will go wrong. When that happens, no one must ever make light of their cock-ups.
Instead they should carry the memory of all their mistakes as part of their own internal score sheet of how they have fared as a banker.
Financial Times
