Learning to Celebrate Your Failures

Embracing failure is a key part of success – even the world-renowned author Stephen King used to peg rejection letters on a nail right above his writing nook.  But to truly master the art of failure, you must not only learn from your mistakes, but also set your business up to fail the right way.  Combining these two practices will not only let you innovate and experience the benefits of relatively unfettered creativity, but will also protect you from the catastrophic disasters that could otherwise kill your company.

Failure is Essential for Business Growth

Innovation, experimentation and creative freedom can all lead to tremendous success in the business world – but they do come with a price.  For far too long, companies have been reluctant to allow this sort of “free reign,” but according to Deepak Seethi from telecom giant AT&T, “If you give people freedom to innovate, the freedom to experiment, the freedom to succeed, then you must also give them the freedom to fail.”

Keep in mind that some of the most iconic business gurus throughout history were complete failures at one time or another:

  • Henry Ford went broke five times before founding Ford Motor Company.
  • RH Macy started (and lost) seven businesses before he hit it big with the retail chain that bears his name.
  • Soichiro Honda (the founder of Honda Motor Co.) was an out-of-work engineer fresh off rejection from Toyota when he started making scooters in his home garage.
  • Colonel Sanders (of KFC fame) had his secret recipe rejected over 1,000 times!

If these people can fail and succeed on such a massive level, it’s probably safe to say that learning to fail well can help your business as well!

Rethinking Failure

Now, embracing failure doesn’t mean that you have to actively seek it out.  Instead, it means that you have to rethink the way you deal with it after the fact.  As Amy C. Edmondson wrote in the Harvard Business Review, “That means jettisoning old cultural beliefs and stereotypical notions of success.”

The number one way to do this is eliminate blame (unless it’s absolutely necessary).  Playing the blame game is a waste of time and resources.  Ms. Edmondson writes that when she asks executives to “estimate how many of the failures in their organizations are truly blameworthy, their answers are usually in single digits—perhaps 2% to 5%. But when I ask how many are treated as blameworthy, they say (after a pause or a laugh) 70% to 90%.”

The hunt for a scapegoat creates a negative stigma that attaches to failure and becomes a detriment to the overall productivity of the entire workforce.  So how to you avoid blame and still learn you’re your mistakes and those made by your employees?

Interesting research from Shmuel Ellis of Tel Aviv University, published in the Journal of Applied Psychology, shows that “after action reviews” – a military procedure used to diagnose what went well, what went poorly and what could be improved in the future immediately following given actions – are essential for learning.

And while Ellis’s research involved military units coming back from combat engagements, it’s easily translated into the business world.  One such study compared the differences between one unit that solely on failures in their debriefings and others that noted failures, but also praised successes.

While the both groups showed improved performance after these “dressing down” sessions, the groups who were praised for their successes as well experienced much better results quantitatively and performed at a higher level the next time around.  In short, dwelling on failure alone simply doesn’t breed the type of success your business needs to come out on top.

Learn to Fail “Cheaply”

To minimize the negative effects of failures, companies can take steps to set themselves up to fail well – what Scott Anthony, the managing director of Innosight, calls “failing cheaply.”  Failing cheaply entails actively managing risk from the get-go so that when the inevitable failure does arise, it doesn’t destroy the financial or social standing of a company.

Smart and diversified companies that have failed spectacularly – as in the case of Coca-Cola with its New Coke reformulation – can bounce back to the top of their game quickly.  On the other hand, companies that put all of their eggs in one basket – like Nukote with reusable ink cartridges and their resulting patent-infringement charges – are completely destroyed.  As Anthony states, “Figuring out how to master this process of failing fast and failing cheap and fumbling toward success is probably the most important thing companies have to get good at.”

So how do you get good at perpetuating a cycle of mini-failures that eventually lead to success?

  • Take a page from IBM’s play book and offer a sliding rewards/raise system based on multiple performance reviews over time to account for occasional “off years.”
  • Test, test and retest, like Google does with any of the projects that come out of its legendary “X Lab” (like the recent Google Glass).
  • Do your homework first – it’s the best way to avoid failure in the first place.
  • Don’t follow market or industry trends.  Instead, set goals for your company based on what’s best for your business and your business alone.
  • Don’t be afraid to kill your darlings quickly.  If you spot a program or a project that has potential, but just isn’t gaining the traction it needs, pull the plug before it becomes a boondoggle.

Yes, the prospect of actively courting failure may sound scary, but it’s a necessary process for businesses to embrace.  Learning to celebrate your failures can bring about unprecedented opportunities and successes – but only if you’re careful about the type of failure you choose to court.

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