The value of failure

Recent highlighting of the value of failure includes a book by Mario Livio, Brilliant Blunders: From Darwin to Einstein – Colossal Mistakes by Great Scientists That Changed Our Understanding of Life and the Universe, and coincidentally the opening in Edinburgh of the world’s first Library of Mistakes.

In engineering, it’s usually possible to try things out, learn from failure and adapt quite quickly. In developing a successful light bulb, Thomas Edison did hundreds, even thousands, of iterations in developing a filament that would both provide good illumination and last a decent length of time, with a multitude of failures along the path.

Science is rather different, as major new theories sometimes have to wait for years before they can be either validated or discarded.

The new library in Edinburgh records a litany of financial disasters. I wonder if anyone at RBS (or any of the other banks that ran themselves into the rocks) will be paying it a visit?

 

Risk and the financial meltdown

I’ve been developing new products with financial services organisations – banks, building societies, insurance companies, credit card operators etc – for several decades. Nearly all the majors, both in Britain and internationally.

In my early days (by which I mean the 1970s), there seemed to be a rather strict regime, where risk assessment and legal issues would be dominant in our thinking.

But some time along the way (in the mid-eighties, I think), the gung-ho marketing folk seemed to get the upper hand, and the risk and legal people were pushed back, discounted, assuming a much less intrusive presence.

I wonder if others share this perception? How widespread did it become in the industry? Was this shift a factor in the recent financial meltdown?

And what is the situation now? Have the risk managers reasserted themselves?