How Should Organisations Embrace Failure, and Why?

Failures often result in reputations being tarnished and careers getting tainted. So how can leaders foster an environment that embraces measured risk-taking and encourages innovation, while accepting that failures may be part of the journey?

How Should Organisations Embrace Failure, and Why?

14 Jul 2017 by  Mina Morris

What do Post It notes, chocolate chip cookies, and Jacuzzi baths have in common? They are all inventions resulting from failures, and became successful commercial products.

In attempts to improve, organisations are always looking for the next ‘big thing’ that could bring about significant improvements in the way they work or the results they achieve. Innovation gets talked about as a necessity—the only way to survive through being more efficient, developing new products, or new ways to reach customers.

However, failures often result in reputations being tarnished and careers getting tainted, and in our experience, few organisations embrace failure or encourage mistakes that lead to new learning.

So, the question becomes, how do organisations and leaders foster an environment that embraces measured risk-taking and encourages innovation, while accepting that failures may be part of the journey?

What are you willing to tolerate? 

The key lesson for organisations is that clear ground rules on the repercussions of failure, and a high bar for tolerating mistakes, lets leaders send a clear message that encourages innovation.

In 2012, Google announced with great fanfare that it was entering the wearable technology space with a new invention—Google Glass. Three years and billions of dollars later, Google pulled the plug and deemed the product unviable. Organisational setbacks didn’t come much bigger than this. 

However, Google leaders communicated the experience as a mistake in specific areas—introducing a product for commercial consumption without fully educating the marketplace, for example—and highlighted the learnings they gained in data privacy and advances in video technology. This was followed by a corporate restructure to a holding company (Alphabet) and a dedicated team R&D team (GoogleX) to develop ‘moonshots’ and make improbable ideas a reality. 

As one of the largest corporations in the world, Google now spends about 15% of its annual budget on R&D activity. Clearly, Google’s appetite for risk is huge and it’s the only way they feel they can encourage innovation at a groundbreaking speed. 

Are your people ready for risk?

‘Creative Destruction’ is a term coined by Adam Grant, author of ‘Originals: How Non-Conformists Move the World’, about original thinkers—individuals that question the status quo and take measured risks.  Grant argues that this group displays different characteristics whenever they approach a task. 

For many organisations, ‘creative destructionists’ are in roles that do not match this outlook. While we consider many data points when thinking about talent—work histories, education, performance rating, disciplinary record, etc.—we often neglect getting a deeper appreciation of the intangible elements of behavior, especially when it comes to risk-taking.

Research suggests that there are strong correlations between ‘Openness to Experience’, a core personality construct, and appreciation of risks. Through objectively understanding the make-up of your team and their individual preferences, you can get the most out of your people while putting appropriate safety nets in place.

What’s your organisation’s process of decision-making?

In studies of failed organisational initiatives, a common theme that tends to emerge is the duration of time it took to note mistakes. It’s often reported that the warning signs were there but it was too difficult to change the course of action. One of the biases often at play is the ‘status quo bias’—when leaders are seen to punish sins of commission (doing something) more than sins of omission (doing nothing). 

In order to enable leaders to come up with more robust decisions, which better consider wider options and get buy-in, professors at business school INSEAD developed the ‘Fair Process Leadership’ approach, designed to break down the process of decision making into structured parts.

This structure allows leaders to search for failure, at a small scale, and evaluate learning along the way. Over time, this helps build a more collective awareness of risks and mistakes.
The Museum of Failure in Helsingborg, Sweden showcases some of the world’s best failed inventions—and in a world obsessed about getting things right, it serves as a timely reminder that in order to make big leaps forward, we must not be afraid to fail. After all, it was Albert Einstein who famously said, “If you have never failed, you’ve never tried something new.”

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Need help with managing risk and turning failure into opportunity for your organisation? Get in touch with us.

Mina Morris

Mina is an Associate Partner at Aon Hewitt Middle East and works with clients across the region to enhance people performance, through increasing organisational effectiveness, developing leaders, implementing talent management systems and helping organisations manage change. Prior to joining Aon Hewitt, Mina spent over 10 years working with consulting firms to develop human capital in organisations in the Middle East and Asia Pacific. Mina holds a Masters of Science in Organizational Psychology from the University of Canterbury, New Zealand, and is a fluent Arabic speaker.

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Mina Morris
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