Right now, many in the media, at watercoolers, and in the blogosphere are busy castigating a variety of CEOs and individuals at upper and mid management levels for a variety of failures. Although some individuals certainly deserve a virtual lashing, many were just being creative (inventing new hedge funds, derivatives, CMBS, etc.).
Excessive condemnation runs the risk of creating a broad-based workplace culture across a wide spectrum of industries in which leaders and brilliant thinkers only look to avoid risks rather than seek opportunities. Indeed, that is in part the nature of recession – collective attempts to minimize the possibility of failure.
While we all try to sort out how the world fell into this recessionary hole, it’s also important to remember the value that embracing failure can have in our 21st century economy.
Diane Jermyn in her Incubator column in the Globe and Mail did just that last week. She interviewed three specialists on business and entrepreneurial culture and asked about the role of failure in successful enterprises. Here are some noteworthy passages:
“If you’re going to have an innovative culture, you must understand that that comes with the acceptance of failure. Innovation comes with a lot of mistakes.” [says Tony Champman, CEO of communications firm, Capital C]
“You need a culture that allows failure for success because without it, people become anti-failure,” says Charles Plant [Managing Director of the Market Readiness Program for entrepreneurs at MaRS]. “Trying different things is the act of innovation. If you fail 14 times, hopefully you’re going to succeed on the 15th try. Without failure, we’re not going to be driving and growing the economy.”
“Everybody in theory embraces the concept of failure and risk but if the person at the helm is purely financially driven, there really isn’t a lot of tolerance for risk” says Chapman.
This last comment is an important one to monitor in uncertain times or in companies facing adversity – only looking to minimize expenses and cut costs may not be the right solution (how far has it gotten General Motors?). And in some knowledge-oriented industries, managing through risk minimalization isn’t necessarily an option.
“Anybody who’s in the business of inventing the future has to be more tolerant of risk and failure because the future hasn’t been created yet,” says Chapman. “If you’re in the business of creativity or innovation, software, technology or ideas, you have to be tolerant of experimentation and creativity.
But in these times, any organization needs to minimize the downside of failures:
Is there a permissible way to fail?
Everyone agrees that the key to successful failure is doing it in a sensible manner to protect against the downside. The trick to successful failures is to know when to quit.
“I think you have to quickly acknowledge when something is a failure and have a back up plan of what you’re going to do,” says Plant. “Don’t keep flogging a dead horse.”
Does your workplace appreciate and accept failure? Or do you work in fear of making a mistake?
Other thoughts?