The Importance of Failure in Business
“If you want to increase your success rate, double your failure rate” ~ Thomas J. Watson
TL;DR
· Any successful person has failed multiple times on their road to success.
· Most failures in business are not blameworthy. Yet, many companies treat all failures as blameworthy events.
· Most failures are learning opportunities.
· A blameless post-mortem helps separates the people from the facts, lessons learned, and next steps to address a failure.
· Admitting you don’t know is always better than acting as if you do.
· Experimentation is critical to success, and running many experiments at once is the best way to experiment.
· Make failure a part of the way your team’s success.
Success is notoriously challenging. It took Sir James Dyson 15 years and 5,126 failed prototypes to create one of the world’s bestselling vacuums. Nashville’s WLAC-TV fired the youngest and first black female news anchor at their station after only seven and half months because she was “unfit for TV.” That woman was Oprah Winfrey, who would describe the experience as “the greatest growing period of my adult life.” Walt Disney’s first company went bankrupt after only a couple of years. The following year he would form the Walt Disney Company, currently ranked #53 on the Fortune 500. The list of successful people who faced failure before finding success goes on. The common thread in all their lives is each and every failure only made them better and more prepared to succeed. Our work is no different. We are more successful when we create a culture that embraces and treats each failure as an opportunity to learn.
Making failure a regular part of work runs counter-intuitive to many company cultures. Amy Edmondson found in her research that executives treat 70% to 90% of failures as blameworthy when in reality they admitted only 2% to 5% were worth blaming others. It is always important to set a high bar and manage repeated failures or lack of performance in a team. However, treating all failures as blameworthy negatively affects a company’s culture. Teams hide failures and play the blame game, leading to lost accountability and opportunities for growth. This disfunction directly affects our teams, our work, and the value delivered to our customers. By treating failures as opportunities, we indicate to our teams that experimentation, learning, and growth are a required part of our operating system.
Stop Blaming
When we view failure as growth opportunities, we force ourselves to take a different mindset. Suppose no one is to blame for a failure. We naturally shift towards a more scientific perspective where we examine failure with facts. By taking a fact-driven approach to failure, we’re more likely to consider what went wrong, what we do better, and how we can avoid failure in the future. A tool to help consistently create this type of approach is to perform a blameless post-mortem. A blameless post-mortem separates the people from the failure by having teams examine all factors that lead to the failure, determine the gaps that lead to the failure, and identify how we can learn and improve from the failure. Constant analysis of the cause of failures and how to improve from them without any blame promotes a mindset and culture within the team of iterative learning and improvements where the same failure is less likely to occur.
Admit Your Failures
Leaders who find it hard to admit failure fall into a trap where they must be the one who has all the answers while losing credibility with their team. As Justin Brady explains, leaders who avoid admitting their failures fail to connect with their teams by showing they are just as vulnerable and capable of failing as all humans. These leaders create a culture where failures are unacceptable, and they miss opportunities to learn. When we are open about our shortcomings and are transparent about our failures, others follow suit. This openness creates teams powered by curiosity and an openness to learning from others where no one has all the answers. In short, admitting you don’t know is always better than acting as if you do.
Start Experimenting
Far too often, our work lacks data and well thought out hypotheses on the outcomes we are trying to achieve. Instead, we work towards goals, create and implement plans against them, and assume the only good result is a success. This narrow approach limits any possibility for experimentation while emphasizing perfection instead of smaller iterative achievements. Promoting experimentation over hard-set deliverables helps us break away from this approach and focus our work on the best way to deliver value to our customers. Continuous experimentation helps make failure a regular part of a business’s DNA.
Of course, it is hard for a company to experiment frequently and run many experiments at once. One approach to successfully introducing experimentation is to promote an environment where teams regularly run many experiments. While running many experiments at once feels risky, Stefan Thomke found it is less risky to run a larger number of experiments than a small number of experiments. Experiments by nature often lead to failure, with lessons learned and next steps from the experiment providing insight into a better way to succeed in the following experiment until an experiment and hypothesis succeed. Companies that run many experiments see a higher success rate simply because they try more novel and valuable ways to achieve success. These companies understand that learning from failure, providing the space and support to fail fast and often, and autonomy for teams to deliver creatively leads to more success than their competitors.
Make Failure a Part of Your Success Story
When we see teams worried about blame, we are in a culture where issues are blameworthy and actively hidden. When our teams do not have time to innovate, our culture cannot experiment and accept failure at a high velocity. We can make failure a part of our teams’ success story by helping them see failures as learning events and opportunities to improve. Take this approach to failure. Create a culture where all issues and shortcomings are openly known and discussed. Make failures a necessary step in your success.
