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Guest-blogging at The Atlantic, Jim Manzi (author of Uncontrolled: The Surprising Payoff of Trial-and-Error for Business, Politics and Society) writes about the role trial and error plays in innovation.
An excerpt from Manzi’s Hayek Was Right – Why Cloud Computing Proves the Power of Markets:
Many things about our company turned out differently than we had expected… The Hayekian knowledge problem is not a mere abstraction. Our innovations that have driven the greatest economic value uniformly arose from iterative collaboration between ourselves and our customers to find new solutions to hard problems. Neither thinking through a chain of logic in a conference room, nor simply “listening to our customers,” nor taking guidance from analysts distant from the actual problem ever did this. External analysis can be useful for rapidly coming up to speed on an unfamiliar topic, or for understanding a relatively static business environment. But at the creative frontier of the economy, and at the moment of innovation, insight is inseparable from action. Only later do analysts look back, observe what happened, and seek to collate this into categories, abstractions and patterns.
More generally, innovation appears to be built upon the kind of trial-and-error learning mediated by markets. It requires that we allow people to do things that seem stupid to most informed observers — even though we know that most of these would-be innovators will in fact fail. This is premised on epistemic humility. We should not unduly restrain experimentation, because we are not sure we are right about very much.
Manzi touches on several of our favorite themes: iterative collaboration, how to fail the right way, the incremental, adaptive ways by which success is achieved, and even the role of luck – although we’ve described it a bit more favorably as “serendipity.” Serendipity is the province of the happy accident and relies on inefficiency. There’s an “optimal degree of wastefulness” in any creative endeavor in which the mind wanders and activity can seem directionless. Watching or even playing with mistakes is productive and exciting because you notice unexpected things.
Saras Sarasvathy, a professor at the Darden School of Business, teaches that great entrepreneurs thrive on contingency and improvise their way to an outcome that only feels ordained in retrospect. She likens them to Iron Chefs, “at their best when presented with an assortment of motley ingredients and challenged to whip up whatever dish expediency and imagination suggest.” Trial and error, in her view, gets the best results when it includes an “almost anthropological approach” to customer interaction, actually working alongside them.