[jyl]

Do you systematically examine your mistakes in an attempt to improve?

In my business, close to half (but hopefully less than half) of one's decisions will usually be mistakes. Reducing that mistake rate from 47% to 42% can make the difference between being mediocre to being good. And it is very clear what decisions were mistakes. So, at the end of every year, I go back over the past 12 months and try to analyze what I did wrong. I'm trying to do it more systematically. I'm calculating the % of decisions that were correct vs wrong; the average gain from the correct ones vs the average loss from the wrong ones; the market sectors and environments in which my correct vs error ratio was better or worse. I'm grouping my mistakes into categories defined by the underlying behaviour, and seeing which behaviours I am most prone to and which cost me the most money. And I'm identifying the major strategies and calls I made during the year, which one were right and wrong, and which ones I correctly implemented vs screwed up.

This year was a pleasant year to do this analysis, because we had a great year and the metrics are attractive to see. Other years, not so much. I think I need to start running this analysis quarterly, not just annually.

Do you guys do this? What method works for you? Do you do this analysis for others you work with? How can you do that without triggering a blame game?