Adapt: The Benefits of Safe Mistakes

Tim Harford

August 03, 2011

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"We cling on to the idea that successful business people are talented leaders running objectively brilliant corporations. But the world is far too complex and changes far too rapidly for us to have any confidence that this fondly held idea is true. It's easy to list corporations which have enjoyed periods of great success, only to stumble and fail to adapt: think of US Steel and Cudahy Packing a hundred years ago, Atari and Pan Am in the 1970s, and General Motors and MySpace more recently. Or think of eBay, McDonald's, and the Nobel-prize winning Grameen Bank, which have suddenly sprung from nowhere, almost by accident, because somebody happened upon a brilliant idea. So does economic success happen despite business failure? I'd go further than that. Economic success happens because of business failure. It's the failure of once-dominant companies that makes space for new business ideas."

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