Saturday, June 18, 2016

false positives vs. false negatives

Was just listening to Adam Grant talk about his new book Originals: How Non-Conformists Move the World on Innovation Hub and what really piqued my interest was his comments about false positives vs. false negatives in the workplace. In the interview he talks about how Seinfeld was pretty much panned by the execs at NBC after focus groups hated the show. It only survived because one exec had some extra space and he thought it was funny.

I think the key reason Seinfeld survived was because this not because this particular exec had a lot more courage or insight than his colleagues, but because he could afford to absorb the failure - failure was low cost. A false positive - i.e., choosing to go with Seinfeld and taking a chance - and being wrong would have had no cost to him. He had space that needed to be filled, if no one liked Seinfeld, no one would remember that he had given the show a chance.

The execs who rejected Seinfeld did not have that freedom - if they gave a thumbs up to Seinfeld and it turned out they were wrong (false positive), it would have been costly to them. Thus they passed on Seinfeld (a false negative) because institutional incentives made them more conservative than they should have been.

I've been reading about IDEO and how they try to fail early in their creative processes so that they can learn more quickly.

Grant's Seinfeld story is a great example of how organizations build in conservatism and miss opportunity.

How do we create organizations so that employees can take more chances without being punished?

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