(This is an excerpt from my upcoming book “Agile in the Bloodstream: Creating Change-Ready Teams Using the Power of Systems Thinking,” to be published August 2010.

Success is a lousy teacher. (Bill Gates)

The only way to learn is to make mistakes. What happens in your culture when someone makes a mistake? Is blame assigned? Is there a glare of attention on the person who made it? Is there any type of punishment meted out?

You can’t learn anything from doing something right. If you did it right, you merely confirmed that what you already knew or believed was correct. Nothing learned. But if you make a mistake, you can identify it and correct it.

There are two types of mistakes: commission and omission. An error of commission is doing something that should not have been done. An error of omission is not doing something that should have been done. You may think we’re talking only about errors of commission here, but actually errors of omission are much more serious.

Errors of omission signify a lack of innovation in your team. Maybe someone thought of a better way but was afraid to say anything. Or maybe nobody even thought about it.

What happens in organizations is that people get punished for committing sins of commission but they do not get punished for sins of omission. This shapes the mind of a person into saying “No, we better not try that,” attempting to avoid the nasty results of commission errors while ignoring the problems of omission errors, which don’t seem to cause as much havoc.

This helps build a team of people who try to create the appearance of doing a lot without actually doing anything. We all know the person who received one promotion after another even though it was widely known that they had never actually accomplished anything. That person is a symptom of a culture where mistakes are punished, not tolerated.

What you want to create, as a manager, is a Learning Organization. One way to do that is to tolerate mistakes by your people and not to punish them for making them. It is helpful to have “the speech” available, repeated by everyone from Thomas Watson of IBM to Larry Page of Google, which goes something like this:

“I don’t mind you making that (insert monetary figure here) mistake. I’m glad it happened. No, I’m certainly not going to fire you! I consider this money a well-spent investment in our organization’s education.”

For many years, people pointed to this oft-repeated but seldom practiced maxim as “the right thing to do.” But it’s more than that. If you do not practice this attitude towards people’s mistakes, you will create a Learning Suppression Machine which will cause your team to be unable to adapt to the changes it encounters and therefore a brittle mechanism instead of a thriving living team. The extent to which your team can overcome unforeseen obstacles (and what obstacles are foreseen??) is directly correlated to the way you handle mistakes in your team.

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