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In a talk at Harvard University, Warren Buffet was asked about his biggest career mistakes. The legendary investor was thoughtful, and paused before he answered.
"The things we could have done, and didn't," he said, "have cost us billions."
We categorize these opportunity losses as "errors of omission." The road you could have taken, but didn't. The investment you could have made, but never considered. The choice you could have selected, but passed up. Sometimes, the $100 bill you leave lying on the sidewalk.
Contrast these with "errors of commission" -- the choices we made that turned out wrong, and resulted in real, out-of-pocket loss. Often with consequences for advancement. However, errors of omission, by definition, are sometimes hard to recognize even after the fact. Especially as those responsible are motivated to hide them from management and the accountants.
We call the value ratio of errors of omission to errors of commission the "Omission Ratio." Ask yourself what size of missed opportunity would be as bad as losing $10 million for your company. In some companies, it's more than 10:1 -- that is, passing up a $100 million opportunity would have the same negative consequences as losing $10 million in business as usual.
Very few companies have a true 1:1 ratio ... and anything higher than that represents value leakage.
With insights into the behaviors and incentives driving such errors, and what can be done to get the ratio more into line, SDG presents "The Omission Ratio: Paths To Value Not Taken.
Join usto hear stories and anecdotes that will help raise your awareness of this unique form of business error.
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