Action Beats Inaction

A framework for understanding how to evaluate mistakes in business, particularly distinguishing between errors from taking action versus errors from inaction.

Core Concept of Error Types

• Two fundamental types of mistakes:
  • Errors of Action: Mistakes made while actively trying something
  • Errors of Inaction: Mistakes from not doing something that should have been done

Errors of Action

• Defined as mistakes made while attempting something
• Characteristics:
  • Result from trying hard but getting it wrong
  • Come from active effort that didn't work out
  • Are forgivable and viewed positively
• Benefits:
  • Lead to learning and improvement
  • Show initiative and effort
  • Demonstrate willingness to take risks

Errors of Inaction

• Defined as mistakes from failing to take necessary action
• Characteristics:
  • Not thinking about something important
  • Failing to anticipate problems
  • Dropping the ball on responsibilities
  • Forgetting to do required tasks
• Consequences:
  • Considered unforgivable
  • Harder to justify or excuse
  • Indicate lack of effort or care

Application to Business Leadership

• Used as framework for evaluating team performance
• Leaders should:
  • Encourage and support errors of action
  • Never make teams feel bad about action-based mistakes
  • Address and correct patterns of inaction
  • Use this framework to assess startup founders and investments
• Real-world example:
  • When evaluating startups, look for founders actively trying versus those making excuses
  • Those in denial or inactive about problems are red flags
  • Active effort, even if failing, is preferred to inaction