Embracing Failure

Successful managers allow their employees to make a few mistakes

As chairman, president, and CEO of Procter & Gamble, A.G. Lafley is responsible for a portfolio that includes some of the world’s most formidable consumer product brands. And with the company’s reputation as an innovator and a responsible corporate citizen growing steadily during his tenure, Lafley can take justifiable pride in his achievements. Yet on page 209 of his book The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation (Crown Business, 2008), Lafley and co-author Ram Charan serve up a table that summarizes “A.G. Lafley’s 11 Biggest Innovation ‘Failures.’”

In a world that’s obsessed with success, the idea of owning up to — and even celebrating — one’s failures might seem a bit odd. But the authors’ point is clear: Success in the business world requires taking chances and making educated guesses. In plain English, trial and error.

“It is not a failure when you stumble,” Charan says. “Failure is when you don’t get up. That’s what learning is all about. You examine your experience for insights. You do it again. And your success rate will improve. At P&G, the success rate for new products was about 20 percent in 2000. It’s 55 percent to 60 percent now.”

 “Success only means something in the context of failure,” concurs Richard Farson, co-author of The Innovation Paradox: The Success of Failure, the Failure of Success (Free Press, 2003). “We don’t want to justify incompetence and recklessness. We’re talking about well-intended failures, things that you thought would work that didn’t. We need to embrace those just as much as we would if they were successes. It’s about getting engaged, analyzing the experience and the methods and the outcomes and so forth, and trying to figure out, ‘OK, what do we do next?’”

The operative word here is “we,” because it implies shared responsibility for failure within an organization. Employees who fear that honest missteps might lead to reprisals or somehow hurt their career are unlikely to admit their failures or share the lessons they learn.

“You need to create a culture where it’s OK to discuss the small concerns and failures,” says Amy Edmondson, Novartis Professor of Leadership and Management at Harvard Business School. “The question is not ‘Who did it?’ It’s ‘What happened? How do we learn from it?’ And you’ve got to work hard to keep it up, because it’s not always fun.”

Edmondson believes learning from failure is a three-step process. The first step, she says, is for the leader of a project to set the tone at the outset and “explicitly acknowledge the uncertainty that we face: ‘We’re on this new project. Nobody’s ever done anything like this before. I’m sure we’re going to stumble and fall on the way to success.’ If I set the context this way, and you’ve heard me and believe it’s genuine, that lowers the hurdle for letting me know what isn’t working. That’s data we need.”

The second step is to establish a review process. The leader should inform the team that their work will be checked regularly and that every team member is expected to contribute to the conversation, regardless of whether their previous efforts on the project have been successful.

The final step is for managers to remain engaged with team members between reviews. By simply asking questions and listening to what employees tell them about day-to-day operations, alert managers can spot minor difficulties before they become major problems. The goal is to make it easy for team members to stay engaged, Edmondson says, adding, “It’s a lot harder to volunteer into silence than to respond to an earnest question.”

In the end, managers and team members alike benefit from knowing that risk, failure, and innovation all go together.

“If you’re skiing down a slope and nobody ever falls, then even though it may be a steep slope, it’s not a risky one,” explains Farson. “You can only tell it’s risky when people fall.”

It is easy, and quite natural, for most of us to shy away from risk and failure. But to do so is to risk stagnation. And that is something every successful organization avoids.

Lessons Learned

In their book The Breakthrough Imperative: How the Best Managers Get Outstanding Results (Collins, 2008), authors Mark Gottfredson and Steve Schaubert acknowledge the importance of owning up to and learning from failure. “A rigorous, fact-based assessment,” they write, “can identify the reasons for failure. The team can then develop a plan of action to recover the lost ground.” Drawing on their experience at the management consulting firm Bain & Co., Gottfredson and Schaubert elaborate on what they believe are the core principles of managerial success.

Managers who are genuinely willing to take chances and put their reputations on the line are few and far between. That might change, however, if more of our business leaders would read and take to heart Gary Hamel’s The Future of Management (Harvard Business School Press, 2007). This book delivers a compelling and articulate argument against the rigid and risk-averse management styles that stifle innovation in so many organizations. Drawing his insights from numerous case studies, Hamel points the way to a new management style. — D.F.