Failure is no longer seen as a business result to avoid at all costs but an outcome to help drive innovation, Scott McCulloch reports.
The world’s greatest business leaders are revered for their successes. Yet titans like Henry Ford, Estée Lauder, and Steve Jobs all failed from time to time.
That’s worth celebrating. Sound crazy? Think again.
Intuit, an accounting software company, offers a special award for the Best Failure and holds “failure” parties. Why? Because every flop “teaches something important that can be the seed for the next great idea,” says co-founder Scott Cook.
Gore-Tex makers WL Gore take failure in stride. The US company’s core beliefs, where action is prized and ideas are encouraged, include making mistakes “as part of the creative process.”
Rajan Tata, founder and former chairman of Indian conglomerate Tata, created a prize for the Best Failed Idea as he neared retirement in 2014. The aim was to spark innovation and keep the company from avoiding risks.
“Failure is a gold mine,” Tata proclaimed, hoping to propel the multinational to new innovative heights.
“Sometimes what we call failure is really just that necessary struggle called learning,” says executive coach Joel Garfinkle. There are lessons to be learned in every failure. One is to fail better next time, experts say.
Failure, explains clinical psychologist Raphael Rose, is required to promote resilience. Being resilient, he says, means you face your stressors, not eliminate them.
In his research for NASA, Rose discovered that failure is the key to creating resilience. Leaning into trials and setbacks builds the emotional callouses that help us value what’s good in life.
“Resilience means you face life’s stressors and challenges, and you bounce back and recover,” Rose says. “Resilient people are open to new experiences, they embrace challenges.”
They are also more likely to be socially connected, experience happiness, and less prone to anxiety and moodiness, says Rose who is a researcher in the Department of Psychology at UCLA. Facing life’s challenges and pursuing meaning can help promote resilience.
Most of us would accept that failure is just an inevitable part of success. Yet there are times when failure is, as they say at NASA, not an option. What if you need to meet a client deadline or achieve a stringent level of product quality and safety?
If a manager cannot distinguish between when failure offers a “teachable moment” and when it is harmful, leaving employees hesitant about risk-taking, then celebrating it is not a path to pursue.
“The key to getting this right is understanding whether the organization is in execution mode or innovation mode,” writes Schaffer Consulting’s Ron Ashkenas in Harvard Business Review.
Execution mode means that standard operating practices exist and should be implemented with little deviation. Innovation mode is when standards don’t exist and best practices are still being discovered.
Resilient people are open to new experiences.
Ashkenas says in this kind of situation, it’s important to test new ideas and processes, and allow room for failure in order to learn what works and what doesn’t. Only then can managers more easily communicate what the appropriate attitude towards failure should be.
It is fairly easy to make a case that creative companies celebrate failure. But the key is to do it effectively, because at the end of the day a business needs to turn a profit.
Without measures in place to actively celebrate risk-taking and failure, innovation will suffer. Key performance indicators are often tied to productivity, efficiency and improving the bottom line.
Yet without incentivizing risk-taking, and making allowances for tolerable failed outcomes, innovation will rarely move beyond the conceptual.
Adding a KPI that encourages workers to try new things, including an allowance for failure and sharing their lessons, could bring innovation into concrete form faster, experts say.
So fail better. And if you learn from defeat, you haven’t really lost.