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058 Embracing Failure

The average American discards thirty-seven kilograms of clothes annually, and globally an estimated ninety-two tons of textile waste ends up in landfills. Assuming a kilogram is equivalent to ten pieces of clothing, that is almost like throwing away a T-shirt or a pair of jeans every day of the year.


The current linear business model of producing and discarding is not sustainable. Companies are finding ways to shift their business towards a circular economy that reuses and recycles. This is needed to reduce the pressure on the environment and improve the security of the supply chain.


But the shift toward circular business models is challenging for business leaders. Ray Anderson, the founder of Interface, a commercial flooring company, attempted to shift his customers from a buy to a lease model for commercial carpeting. However, the leasing model was unpopular with customers, and the company decided to stop using it. Instead, Interface shifted towards incorporating more sustainable materials in its products.


Interface’s experiment to shift its business model could be considered a failure. But not all failures or mistakes are bad—failures are not created equal, and some failures help us grow as individuals and organizations. We should encourage teams to take calculated risks at work and minimize the blame game to gain insights and knowledge.


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But how do we know which mistakes are worth making, and how might we develop psychological safety to make mistakes in the workplace?


Lack of Effort vs. Discoveries

The fear of failure can be paralyzing, preventing some from stepping out of their comfort zone. The anxiety from not messing up is stronger than the desire to gain something from the risk taken or winning. The fear of failure could sometimes look like perfectionism—the fear of doing something poorly, looking foolish, or not meeting expectations could lead to inaction. All energy is concentrated on not doing something terrible instead of focusing on achieving something. Such a mindset could lead to mediocrity and average results.


According to Amy Edmondson, Harvard Business School professor, there are three categories of failure: preventable, complexity-related, and intelligent. Preventable failures are caused by a lack of effort or focus or a conscious intention to deviate from a prescribed process and are deemed blameworthy. The appropriate persons should be held accountable for such mistakes. This could happen in routine operations in manufacturing, with a high level of predictability in outcomes. Any inconsistency in behavior could result in impactful disruption where high volumes are involved.


Moving towards the opposite end of the spectrum, more uncertainty and complexity comes into play. Some mistakes may be unavoidable because of the interaction between the different systems. Managers should learn from these and determine where they could be minimized further in the future.


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The types of failure that leaders should encourage are “intelligent failures,” where teams are exploring a hypothesis or conducting a pilot to determine potential outcomes. These are well-thought-out experiments intended to inform, with limited scope, so that managers can test the assumptions and validate their hypotheses. The intention is to collect data and insights so that leaders can make discoveries and push the business toward the future.


The Buck Stops with Me

Leaders can reduce the stigma of failure by stopping the blame game and owning up to their mistakes. Blame can be contagious, and instead of passing it on, leaders who accept responsibility for their own mistakes can gain respect from their team and customers.


Take the example of Eric Yuan, CEO of Zoom Video Communications, a video conferencing business that proliferated during the COVID-19 pandemic, who admitted the company’s mistake in managing privacy and security concerns at the outbreak of the pandemic. He displayed humility, courage, and confidence to learn from the episode. By saying “the buck stops with me,” he led by example to embrace the culture of failure and share lessons.


Managers should strive to achieve a delicate balance between accountability and learning—which are the mistakes that should be addressed in public and those where feedback should be given in private. In both instances, the focus should be on the experiment or the tasks involved rather than the person or team who committed the mistake—doing so could be conceived as attributing blame.


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Openness and Transparency

To create a culture that embraces failure and psychological safety requires openness and candor. The first step is for managers to expose their vulnerabilities—whether mistakes or challenges—and know that it may take time for their team to speak up about their weaknesses. It helps establish an open dialogue and open feedback and lets the team know that all perspectives are sought and welcomed.


Asking questions such as “How might I have done better in this project?” or “What would you have done in my place?” promotes inclusiveness and builds a consultative leadership where each member can grow individually and as a group.


Focus on What-If

Often the thought of failing is worse than the potential damage from the failure. Talking about the worst-case scenarios within the team and understanding what could be done to mitigate risks and manage the potential impact if the worst happens can empower leaders to design more conscious experiments.


Next, focus on what could be gained from the experiment. Identify insights and gains they could learn from by taking the risk and help the team visualize success. This two-step approach to mitigate risk and damage and visualize success can unstick teams to move forward with experimentation rather than staying within the status quo. Teams should not get too entrenched in their comfort zone; otherwise, they risk not thriving and not rising to the changing market or circumstances.


Some failures are necessary to gain critical insights where there are many unknowns. The key is to develop experiments that stretch us beyond our comfort zone and get comfortable with knowing that we will not succeed. A leader who takes responsibility for mistakes and develops candor within teams can create the psychological safety needed for people to take calculated risks and experiment. Focusing on what could be gained could also encourage teams to take action where required.


As Thomas Edison, the American inventor and businessman, said, “I have not failed. I have found 10,000 ways that don’t work.”

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