For some reason, I find myself attracted to statistics and probability. This is one of the reasons I love the books of Nassim Taleb, anything that Stephen J. Dubner and Steven D. Levitt of Freakonomics fame write, the social economics work of Dan Ariely, etc. Most recently I was doing some research and ran into the work of Ian I. Mitroff and Abraham Silvers and “The Error of the Third Kind (E3)”.
Because I had read so many books that have statistics and probability as themes, I was familiar with Type One and Type Two errors. Type One errors can be defined as incorrectly detecting an effect that is not present. Type Two errors, on the other hand, occur when one fails to detect an effect that was present. However, Type Three and Type Four errors were new to me.
An Error of the Third Kind (E3), as presented by Mitroff (and others), are those where the wrong problem has been not only proposed, but it is solved flawlessly so that it has the perception of being correct. Mitroff states:
The vast majority of books on management contribute to E3 because they imply that managers already know what their important problems are, for example: how to downsize in the most efficient way, how to improve chances for success in the global economy, how to install the correct Total Quality Management program, how to design the right reward system and so on. In each case, the unstated assumptions are that the essential problem the organization is facing is downsizing, global competitiveness or whatever it may be. While the assumptions may be correct, they are so crucial to formulating a problem correctly that they deserve to be challenged in the strongest possible way by asking tough questions.
This type of error reminds me of the argument I often hear from clients that “we have always delivered” or “waterfall has worked for us for years.” The real question that needs to be answered is not if one has “always delivered” it is “what has one always delivered?” If, in software development, the code is difficult to maintain, if it has a great deal of technical debt (for example, only concentrating on on-time delivery), can it really be said that one has delivered successfully?
When someone mentions “waterfall has always worked for us”, I believe this is an example of Type Three error. The real question – has waterfall been optimal? The example I always give is that the covered wagon was successful for transportation, but when I look out the window of a plane, I don’t see any crossing the prairie. In the case of those applying the values and principles of agile properly there is little doubt as to which is the airplane and which is the covered wagon.
Type Four errors may be even more insidious. These are sometimes better known as HiPPO errors (Highest Paid Person’s Opinion). These are seen in companies where top down hierarchical control is the norm. In their book, Dirty Rotten Strategies: How We Trick Ourselves and Others Into Solving the Wrong Problems Precisely, Mitroff and Silvers state:
The Type Three Error is the unintentional error of solving the wrong problem precisely. In sharp contrast, the Type Four Error is the intentional error of solving the wrong problems…
The Type Three Error is primarily the result of ignorance, a narrow and faulty education, and unreflective practice. In contrast, the Type Four is the result of deliberate malice, narrow ideology, overzealousness, a sense of self-righteousness, and wrongdoing.
By allowing others to improperly frame the question, a troublesome groupthink is created that allows many people to solve the wrong problems precisely.
As companies go down the road to Agile transformation, it is helpful to understand the Type Three and Four errors so that we don’t fall into the trap of solving the wrong problems flawlessly.