Design to Embrace Failures

Fear of failure often originates in settings where mistakes are covered up and ignored. The authors argue that failure is unavoidable in ambiguous environments and can prove useful when utilized to improve future performance. This article, published by Harvard Business Review, suggests adopting “intelligent failure” practices, or learning through failure, to improve skills, agility, and risk-taking in organizations. According to the article, failures can prove helpful by:

• Keeping options open – with many potential outcomes for a course of action, trying more often improves the odds of succeeding.
• Learning what doesn’t work – use trial and error to develop successful results.
• Creating conditions to attract resources and attention – when something goes wrong, resources and attention can be focused to fix the problem, rather than trying a new endeavor.
• Making room for new leaders – poor decisions in management can boost recruitment of fresh leaders, ultimately benefitting the organization.

• Developing intuition and skill – facing negative outcomes leads to the development of higher levels of pattern recognition, improving insight into the future.

Since failures are probable in uncertain environments, organizations would benefit from planning, managing, and learning from them. The article further lists and describes seven principles to help organizations learn from failures:

1. Decide what success and failure would look like before launching an initiative – as a group, brainstorm what would constitute success and failure.

2. Convert assumptions into knowledge – write down assumptions, explicitly share them with the group, and be ready to revisit them. Assign a team member to discover information that proves your course of action incorrect in order to find flaws before making large commitments and avoid confirmation bias. Lastly, design an experiment to test assumptions after revisions have been made.

3. Be quick – fail fast – make quick, decisive failures to save resources, determine cause and effect relationships easier, move faster towards goals, and decrease pressures to succeed.

4. Contain the downside risk – fail cheaply – consequences of failure should be designed to be modest by testing on a small-scale basis before making large investments.

5. Limit the uncertainty – minimize the number of uncertainties to resolve. Using a limit of one major uncertainty on one dimension, such as market factors or technology factors, is recommended.

6. Build a culture that celebrates intelligent failure – create a climate that accepts failure and intelligent risk-taking in the organization.

7. Codify and share what is learned – capture and pass on learning through post-project reviews and avoiding placing blame.

Since mistakes cannot be easily avoided, organizations would benefit from planning, managing, and learning from them by creating a culture that embraces intelligent failure and creates value from mistakes and increases the likelihood for success in future endeavors.

Click the link to download the article

Citation: McGrath, R. “Failing by Design” Harvard Business Review. April 29, 2011.