Mistakes Were Made And How To Handle Whatever Comes Up

October 18, 2008 · Comments

Here’s a guest post from Whitney Hoffman:

Mistakes Were Made, And How To Handle Whatever Comes Up

Whitney HoffmanThings in the economy are pretty shaky right now, and the mistakes and misjudgments of the few are causing wide-spread problems for the many.  If you’re looking to understand the crisis, I can’t recommend any better source than the awesome pieces done by NPR and This American Life- The Giant Pool of Money and Another Frightening Show About the Economy. Understanding what’s happened is important, if only so we can avoid making the same mistakes again in the future.

One of the best books I’ve read recently is Mistakes Were Made (but Not By Me):Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts by Carol Travis and Eliot Aronson.  It talks about how blind we can sometimes be to errors, and then even when we recognize them, how hard it is to have someone take responsibility for them.  No one wants to be fully culpable for mistakes; yet sometimes, we need to know who will take responsibility, if only for the clean up.

This, of course, can be applied to any one of the links in the financial chain that’s led to the recent economic problems- but somewhere, along the line, many people contributed to the mess.  We passed the collective blame and rationalizations around, and no one seemed to listen when a few people started to say- “This doesn’t seem like a good idea.”  Now, it seems like all we need is a big enough or good enough scapegoat to be our lamb to the slaughter, and the we can go back about our business.

What I hope we learn from this crisis, and by books like Mistakes Were Made, is how to understand the problem and address it; fix the situation at hand and spend less time trying to figure out who we can leave holding the bag. Punishment is fine, I guess, but doesn’t always lead to long term change in how things are done.  What I’d really like to see is people in leadership roles to take responsibility, not just figure out how to save themselves and let everyone else drown.  And I think by reading Mistakes Were Made, we can better understand why we have a hard time avoiding the blame game.

This brings me to the book I just picked up called The Knack: How Street Smart Entrepreneurs learn to Handle Whatever Comes up, by Norm Brodsky and Bo Burlingham of Inc. Magazine.  This book outlines the basic things everyone considering their own business should know, from cash flow issues to scalability.  And certainly those involved with startups should understand these basic principals of what constitutes good business and bad, if only to make more solid, long term decisions.  (I also think the principals apply equally well to learning how to manage your family’s money, as I think all families are essentially a small business involved in raising children and saving capital for long term projects, ie retirement, dream house, or college education for kids…but that’s me.)  Moreover, all the ideas and information are presented in a way where you don’t feel like you’re reading an accounting text book.  You see real life people, with real life problems, trying to figure out whether they have a viable business, and what the have to do to make it work for them.    Norm and Bo give you advice you can use, and it’s advice I dole out all the time over on my blog- acknowledge the facts, plan and chart a way towards your long term goals.  May seem boring, but that’s what works, time and again- substance.

What books have you read lately that have changed the way you view things?  What would you recommend to others?  What constitutes your personal curriculum?  Let us know in the comments!

Please also check out Whitney Hoffman’s own site

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  • In a funny sorta way "The Knack: How Street Smart Entrepreneurs learn to Handle Whatever Comes up" kinda sums up what I took from Sun Tzu. It occurred to me at some point that pret'near everything he talked about was just to set the stage so you can cope when the wheels fall off, when things go pear-shaped, when the existential shit hits the paradigmatic fan.

    Agility ... lithe development ... actual responsiveness rather than spin and sophistry. I mean, really, what separates the sheep from the fish better than the attitude that lets us plunge into what ever happens to be in front of us?

    cheers!
    --bentrem
  • I agree Ben- it comes down to resiliency. You have to be able to learn from inevitable mistakes and do better the next time. We all know we're going to have problems, but better to confront them and deal with them rather than pretend they belong to someone else.
  • Interesting that psychopaths succeed (It's actually an adaptive "pathology". They are with us generation after generation.) with precisely that sort of (cold-blooded) pragmatism.

    But yes, what might seem framed a certain way to be spiritual virtues are actually foundational to good craft.
    I'll suggest that 90% of Sun Tzu is nothing more than that. (What came to mind just now was the warning on hair-dryers, "Do not use in bath or shower." heh)
  • Most of my reading these days is online, and in short bursts. A blog post here, a post there.

    The most helpful podcasts I've heard recently are the two referenced in the first paragraph from this American Life - The Giant Pool of Money and Another Frightening Show About the Economy.

    I'm in the real estate industry, and aware of mortgage fraud practices and easy money. This American Life gave me an understanding of why these practices became so prevalent. I'm better able to serve my client's as a result.

    Adaptation, I believe, is inherent in my will to survive. When my backs against the wall, I can either crumple to the floor or find a way to adapt to changing circumstances and move on.
  • There is a perspective that says our economy goes in 80 year cycles. Every 80 years, there is an economic depression. So far, we've only had one and some are predicting another very soon!

    In the Rich Dad/Poor Dad books, by Robert kyosaki... he talks about a coming economic depression because of a final blow to our economy by the retirement of the Babyboomers. H.S. Dent of The H.S. Dent Foundation, (THE NEXT GREAT BUBBLE BOOM) uses demographics to predict the long-term outcome of the economy (his short term predictions SUCK)and he uses demographics to point to the retirement of the baby boomers as the crushing blow to our economy, that leads to an economic depression. This is one assumption these men have made for nearly 8 years or more,now.

    In the beginning of 2007, I found another perspective. I read a marketing book by Marti Barletta entitled, PRIMETIME WOMEN: How to Win the Hearts, Minds, and Business of Boomer Big Spenders. In Chapter 6: Looking Ahead, she addresses, "The Myth of the Crushing Burden". She writes...

    "You've heard this one: The sheer demographics of the enormous Boomer population will crush Social Security and flatten Medicare. Because they haven't saved enough, Boomers will all be on the dole, soaking up money from government entitlement programs funded insufficiently by the sweat and tears of the smaller generation that follows them, eventually bankrupting the system. Damn them.... Hang on a minute. First of all, they will not all be on the dole... because they're planning to keep working... Second, given... the urge to give back... we can expect a substantial surge in volunteerism...the Prime Time population will turn their golden years into a time of intense social activism, volunteerism, and lifelong learning - an immense social resource that will contribute much more economic value than it consumes."

    She makes the point that the vast majority of baby boomers, especially women, do not plan on retiring like their parents did. They need the money, the health benefits, or they need to give back to society ... and they are redefining retirement altogether. She argues that the Babyboomers, especially the women (the most powerful market on earth), will enliven the economy instead of burden it.

    H.S. Dent uses demographics to point to an economic depression finally caused by the babyboomers. Marti Barletta uses demographics to point to the economic revitalization caused by the babyboomers.

    So who right? I don't know. But,if the major theories of a coming economic depression are all focused on what the baby boomers do... well, it's good for me to see that everything may not be doom and gloom after all

    It's good to get different perspectives. Often times, evidence can be a reflection of a person's assumptions about reality... instead of the other way around.
  • Great post, Whitney. The sooner we clean up this mess, the sooner we can get on to making the next mess.
  • I just think we're always gonna mess up- that's a given. The trick is to develop a sense of resiliency, so you bounce back and make new mistakes next time- learn, correct, move on. Nothing is ever perfect, but the more you learn, the less likely you are to repeat the same mistakes over and over. And unless you own the mistakes, you're more likely to make 'em all over again.
  • We are traveling the world as a family, so I primarily read online and I have always liked out-of-the-box thinkers. I find it hard to believe that more did not see this coming as the signs were obvious and many were writing and talking about it years ago.

    Recently Warren Buffet wrote in NYT about following "Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

    That is key, and getting out of groupthink. When tons of low wage earners were "buying" 1/2 million dollar homes with O down, EVERYBODY should have been paying attention to the inevitable.

    There were many good books out about how to prepare for and even do well in the coming collapse. Rubino, Turk, RGE, Shiller, Ellen Brown, Peter Schiff, Jim Sinclair all come to mind and more.

    We are so glad now that we sold our dream home in California at peak in 2005 and mostly got out of the dollar.

    The key is always to look ahead to where that "puck" is most likely to go, but even more so in these turbulent times.

    Those that are paying attention will do great in this economy and those that are not, could get run over by it.
  • jonnygoldstein
    Fave recent book: "Back of the Napkin" by Daniel Roam. The book is about using simple hand drawn visuals to solve business problems. I would love someone to do a clear visual to explain what led to the current economic implosion.

    A book I'm rereading: "Flow: the Psychology of Optimal Experience". It's a great examination of part of what it takes to lead a fulfilling life--the ability to find challenges that are a good match for your skills and interests.
  • @Jonny- I like Back of the Napkin as well- great adjunct to Made to Stick as a way of learning to visualize concepts, and get points across visually as well as through writing/speaking.

    @Soultravelers- You're absolutely right. It's tough sometimes to see where the puck is going- you don't always have all the information, but it's worse if you aren't even in the rink or don't have a stick...in other words- some base level of being ready, some base level of awareness is important, so you have the tools to choose a direction when needed.
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