The first step in recovering from failure in a business is understanding and truly absorbing that your organization is not alone in failure.
The first step in recovering from a failure in a business venture, marketing campaign or entire business is understanding and truly absorbing that your organization is not alone in failure. Instead, it joins a long list of world-renowned entities including Steve Jobs, Google and NASA, just to name a few.
Think business failures devastate teams and team leaders? Consider the white-coated scientists in biotech firms. Some 90 percent of the experiments they slave over (for years even) will fail, and they have to crack open the first petri dish knowing this.
Scientists can only survive these blistering work conditions because they know well that every failure contains valuable information. Businesses would do well to move the focus away from the blame game to mining every failure for its unique treasures.
This article looks at the best way to use the lessons from failure to strengthen new efforts and re-energize the team. By juxtaposing research from Novartis Professor of Leadership and Management at Harvard Business School, Dr. Amy Edmondson, with some insights from outdoor explorers, and a variety of businesses, you’ll pick up an insight or two about how to use failure to fuel success.
1. Develop a More Sophisticated Notion of Failure
For Americans, the word “failure” feels dark, heavy and utterly ruinous. People personalize it (“I’m a failure!” “That venture is a complete and utter failure!”) and Hollywood dramatizes it in many movies. Must “failure” be perceived as 100 percent negative?
In a Harvard Business Review article, “Strategies for Learning from Failure,” Dr. Edmondson posits that that instead of being one dark abyss of disaster, failure can have several shades: sometimes failure is ALL bad, but sometimes it is also inevitable and sometimes even good.
Edmondson categorizes failure into one of three categories: “bad,” “inevitable,” and “good.” A failure to tighten bolts on the steering wheels of an entire line of cars falls into the “bad” category. A natural disaster resulting in the loss of product is “inevitable.” A failure to win over a boss with narcissistic personality disorder could be a “good failure” if the employee derived life-changing information (“I need a new boss/job”) from the experience.
Americans struggle with accepting failure as useful and even “good,” but looking at the experiences outside of the business world can bring a new perspective.
Called “Mr. Everest,” Pete Athans has stood at the top of the world’s tallest peak seven times. Despite incredible physical and mental preparation that included scores of less-challenging climbs, Athans failed to reach the top of Everest—not just on the first attempt but three subsequent times as well.
In a National Geographic article, he explains, “I learned how not to climb the first four times I tried to summit Everest—Failure gives you a chance to refine your approach. You’re taking risks more and more intelligently.” Athans’ failures prompted him to streamline his team and choose less treacherous routes for the first climb.
After a discussion here at Main Path, my colleagues and I put Athans’ experience into “failure as inevitable” category. Our Vice President of Marketing and Operations shared that his teenage daughter’s recent sideswipe in an unexpected, rainstorm-caused traffic jam could also be categorized as “failure as inevitable.” We all found the flexibility to put failure in three separate categories reassuring.
2. Manage the Blame Game
The most nauseating aspect of failure comes when blame must be assigned. This emotionally fraught process pricks sensitive egos and already tenuous office relationships.
Once team members and leaders adopt a more sophisticated approach to failure, however, assigning and taking blame can lose its emotional power. Edmondson has created a list of the causes of failures that range from fully “blameworthy” mistakes or choices all the way to “praiseworthy.”
|Deviance||Individual deliberately violates a practice or direction|
|Inattention||Inadvertent divergence from practice or direction|
Lack of Ability
Individual or team lacks the skills to carry out the assignment
A competent individual or team works with a faulty process
The task cannot be performed perfectly each time
|Process Complexity||A complex process cannot withstand a novel interruption|
|Uncertainty||People make decisions based on faulty or incomplete knowledge|
|Hypothesis Testing||Individual or team takes a risk to see if an idea or design will work|
Individual or team takes a risk to gather knowledge
Edmondson puts only Deviance and Inattention in the “blameworthy” category. The two charter members of the praiseworthy category are Hypothesis testing and Exploratory testing. Researchers have discovered that everyone does better when managers establish clear boundaries of “blameworthy” failures. When managers hold those crossing the boundaries accountable, colleagues feel safer.
The rest of causes of failure go up the spectrum to “praiseworthy.” Duke University professor of management Sim Sitkin likes to call these last two “intelligent failures.” Experimentation is critical in many business situations when the final outcome is not clear. The only alternative to experimentation is withdrawal, which doesn’t get businesses anywhere.
Related Article: Just Say No: 5 Mistakes That Are Shattering Your Productivity
3. Find a Way to Document Small Failures
Dr. Edmondson’s research indicates that many huge disasters are a culmination of many small failures. She explains, “Complex failures, in particular, are the result of multiple events that occurred in different departments or disciplines or at different levels of the organization.”
Reluctance to express concern at lower levels figured into the space shuttle Columbia disaster in 2003. Mid-level managers and engineers had concerns when a piece of foam that broke off the shuttle at launch, but didn’t push the issue because the foam issues were perceived as minor. NASA’s rigid hierarchy kept the information squelched. In the end, the foam’s impact with the shuttle’s leading edge caused its explosion 16 days later.
Taking a completely opposite approach to failure, upon becoming CEO of Ford Motor Company in 2006, Alan Mulally asked managers to report any small mistakes and failures in their weekly reports. Green would be used for error-free, yellow for some concerns and red for major problems. For the first few months, all reports came in green.
When, after Mulally pressed, one yellow report came in, the CEO applauded and reward the manager. After that, yellow and red stickers dominated the weekly staff meetings. Ford’s success in the past nine years can speak to the usefulness of this technique.
Mulally turned Ford into a reliable, long-lasting line of cars and trucks by opening the floor to discussion of mistakes. As Edmondson explains, “tolerance is essential for any organization that wishes to extract the knowledge such failures provide. But failure is still inherently emotionally charged; getting an organization to accept it takes leadership.”
Mulally provided that leadership. Unfortunately, even today the most senior executives can be reluctant to convey bad news. A company culture that establishes procedures for documenting and addressing failures can’t help but outpace a competitor with its head in the sand.
While feedback from customers helps managers and executives stay aware of mistakes, so, too, does developing policies that encourage an atmosphere of “blameless reporting,” where whistleblowers have nothing to fear when reporting mistakes. Encouraging employee participation in how to improve the organization, the process or the next product has proven to improve morale and outcomes across the board as well.
Finally, creating a cut-and-dry failure analysis process applied across the board takes some of the sting out of tough experiences. Reviewing this process with everyone on the team prepares them so that, if a failure does occur, they’re ready with useful, emotionally-tempered insights.
4. Consider a Failure Party?
Eli Lilly does it. Detroit business consultancy “Fail Forward” does it. The Netherlands ABN AMRO bank started an Institute of Brilliant Failures, which analyzes the great ideas that ultimately bombed.
“Failure parties” and their ilk honor intelligent, high-quality scientific or business experiments that fall short of desired results. Toyota has such a radically more accepting view of failure, its processes turned American auto manufacturers around completely.
While a “failure party” may work at an advertising agency, a shoe company or another creative venture (and obviously in scientific research), it won’t work in a hospital or car or medical device manufacturing plant. Attorneys? We can see that. Perhaps your failure party could be the start of your creation of your failure documentation and analysis process.
“Success is not final. Failure is not fatal. It’s the courage to continue that counts.” – Winston Churchill