By Shannon Sage
Understand Failure is Part of the Strategic Management Process

For the past couple issues of this newsletter, we’ve been talking about change. We’ve touched on some ways to approach change, but haven’t really talked about change’s nemesis, which is failure. All too often, change efforts unfortunately result in failure. We’ve reported on some ways to negotiate change efforts to lessen the possibility of falling short of needed outcomes, but we haven’t turned the stone over to talk about failure and its important, yet rarely optimized, connection to learning.

So it was very timely to see this month’s edition of Harvard Business Review, which focuses on how to understand, learn and recover from failure. In tandem they offered a webinar this week from Amy Edmondson, who has 20 years of organizational research in the realm of understanding and learning from failure. Her methodical approach to the topic plucks failure out of the “blame game” and nests in it into different spectrums of tolerance based on the type of organization you belong to. In her words “not all failures are created equal.”

Mistakes according to Edmondson fall into three categories: 1) Preventable failures in predictable operations; 2) Unavoidable failures in complex systems; and 3) Intelligent failures at the frontier.

  1. In predictable operations, like quality manufacturing plants failure is not very frequent. With proper training, processes can be followed with consistency and the reasons for
    ailure might fall into categories of inattention, lack of ability or deviance at the most extreme example.
  2. For complex systems, failure is largely due to the inherent uncertainty of the work. Hospitals, aircraft carriers and nuclear plants can fall into this division. When dealing with failure in complex systems it is a grave mistake to consider them bad, small failures are critical for improving processes to address different situations as they inevitably arise. Learning from small failures is key to preventing catastrophic failures.
  3. Finally, in frontier organizations such as pharmaceutical companies, pushing the boundary into the unknown is mandatory and failure is a key component of getting to the right outcome. The quicker these organizations learn from failure, the sooner they take their R&D product to successful fulfillment.

So ask yourself, to what category does your organization belong? If you are a predictable operation, failures should be minimal and when they happen, a checklist protocol should be able to address most errors. If you are a complex service organization, do you systematically analyze processes for flaws or errors? Do errors get “blamed” on something or someone rather than addressing underlying conditions or precursors that directly contribute to failure? This importantly involves several layers of reason, which takes a level of sophistication and emotional intelligence from management and leadership. If you are part of an organization that works with many unknowns, failure should be embraced and communicated widely as it is part of a development process that can bolster the production of safe, successful and optimally relevant products.

Leaders can help create a safe environment to learn from failure by asking for observations and embracing the messengers who bring bad news, questions, or concerns to them. In these environments, it’s OK to acknowledge the limits of what you know and understand about a job. It helps provide how to frame work more accurately and create shared understandings. Finally, as Edmondson points out, clearly identify those failures that can indeed be considered blameworthy. It will help tighten up processes where warranted and open up for experimentation where needed.


How does your organization address failure?

Shannon Sage