First off, you should go and read all of Atul Gawande’s commencement address to Williams College last weekend. It will take a couple of minutes, but it’s well worth the time. I’ll wait.

Here are some of the highlights for me:

…the critical skills of the best surgeons I saw involved the ability to handle complexity and uncertainty. They had developed judgment, mastery of teamwork, and willingness to accept responsibility for the consequences of their choices. In this respect, I realized, surgery turns out to be no different than a life in teaching, public service, business, or almost anything you may decide to pursue. We all face complexity and uncertainty no matter where our path takes us. That means we all face the risk of failure. So along the way, we all are forced to develop these critical capacities—of judgment, teamwork, and acceptance of responsibility.
…
I thought that the best places simply did a better job at controlling and minimizing risks—that they did a better job of preventing things from going wrong. But, to my surprise, they didn’t. Their complication rates after surgery were almost the same as others. Instead, what they proved to be really great at was rescuing people when they had a complication, preventing failures from becoming a catastrophe.

Gawande then goes on to outline how to effectively rescue risks that go wrong. The secret is to plan in advance. How will you recognise that things aren’t going to plan? What will you do when things go wrong? What are your backup plans?

When we’re innovating, the failures are generally less fatal than they are for surgeons. But we still need to develop a plan to learn from failure. John quotes Eric Beinhocker on how to do this:

The key to doing better is to ‘bring evolution inside’ and get the wheels of differentiation, selection, and ampification spinning within a company’s four walls. Rather than thinking of strategy as a single plan built on predictions of the future, we should think of strategy as a portfolio of experiments, a population of competing Business Plans that evolves over time.

Gawande is one of the best writers around these days, and his speech hits the nail on the head. The key to risk is not to avoid it. Standing in the same place rarely works in business. Instead, we must take risks, test ideas at the simplest level to substitute idea failures for major ones, and recover (learn) from the ideas that fail.

The only real failure is failing to learn.

(Photo from flickr/martymadrid under a Creative Commons License)