One of the least discussed components of success is failure and the crucial role it plays in turning loss into achievement.
Updated 11 August 2017.
Flearning – failing + learning – may not exactly be the new black, but it’s definitely in fashion. So what’s the value in organisations sharing the details of when things go wrong, and how do you fail smart, not dumb?
When Ben Rennie’s multimillion dollar clothing business failed in 2004, he didn’t speak about it with anyone for two and a half years, not even close family and friends.
“I no longer had something cool and interesting that people wanted. I thought, if I don’t have that, what do I have?” says Rennie.
Fast forward to 2012 and Rennie is organising and taking the stage at Australia’s first “FailCon” in Sydney. To an audience of 300, he shares how he woke up one morning to an email telling him his company had lost its distribution rights, sending his business from an A$5 million to an A$1.2 million per annum venture overnight.
FailCons, where conference speakers share their business stuff-ups and what they learned from them, are enjoying international popularity. “Since we went global in 2012, we’ve produced more than 25 events in more than 15 cities around the world,” says Cass Phillips, FailCon’s San Francisco-based founder.
So why all the fuss about failure?
“When the global financial crisis hit it forced people to be more entrepreneurial, to create jobs for themselves,” says Rennie, now managing director and co-founder of 6.2, a digital strategy and design firm.
“That involves much more risk than being an employee, so you need to embrace the idea it might not work.”
In addition, while innovation is celebrated, any creative process involves risk-taking and failure. And “failure” is still an uncomfortable proposition in many workplaces. But rebranding failure with a positive spin can help.
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The term “flearning” (failing + learning) aims at just such a rebranding. The term was coined after the 2012 FailCon, in a brainstorming session led by Mick Liubinskas, co-founder of business incubator Pollenizer. Now it’s a Twitter hash tag and web domain name, and even a syllabus title in some entrepreneur training courses, and you’ll find Liubinskas’s “proud #flearns” publicly listed on his LinkedIn profile.
While a positive reframe is important, it will take more than clever catchphrases before the average senior manager – with objectives to deliver on – feels comfortable allowing his people to fail.
“People know that you have to let people fail to increase innovation, but there’s a knowing-doing gap,” says Doug Sundheim, a New York-based executive coach and author of Taking Smart Risks (McGraw-Hill).
“Fear of taking risks will never go away,” says Sundheim.
“The only way to combat that is to create a culture so that it seems a normal part of the process.”
Sundheim helps his clients feel more comfortable with failure by helping them ensure that if a failure occurs, it’s a smart one.
“Once you’ve defined smart failures, you want to reward them just as you do smart successes,” says Sundheim.
“A smart failure occurs when you have an idea that’s tied to an insight about the marketplace, you do some research, and share the idea with people internally and externally. With others on board you come up with a plan that includes check-in points where you consider whether to proceed. Then you go ahead and test the idea.”
Dr Amantha Imber, founder of Inventium, a Melbourne consultancy that works with organisations to increase innovation, encourages her clients to put more innovation money into this experimental kind of process.
Why more business owners should be 'flearning'
“If companies invest more into the prototyping stage, learn fast and early by testing consumer behaviour on a ‘minimal viable product’, they’ll end up with a better product or service, and save lots of money on projects that might otherwise fail at implementation,” says Imber.
This is the stuff of “Lean Startup” methodology that originated in the tech industry. It’s helping to de-stigmatise risk and failure by showing how to minimise and manage risks early.
As well as being well planned, modest in scale and managed quickly, intelligent failures are also genuinely uncertain, so the outcome cannot be known ahead of time, and they yield lessons that can inform other parts of the business, says Professor Sim Sitkin, an expert in organisational behaviour, leadership and risk-taking from Duke University’s Fuqua Business School.
So when a failure – smart or otherwise – does occur, how exactly can you extract the lessons?
The US Army’s After Action Review (AAR) system, where participants are nameless and rankless and where the aim is to find the cause, not the culprit, is one example. These short meetings involve asking five questions about what was supposed to happen, what actually happened, why there was a difference, what can be learnt and what we will do about it.
Knowledge management consultancy Knoco Ltd has introduced AARs into a range of settings in the oil, pharmaceutical, utility and engineering industries.
Ian Fry, head of Knoco Australia, advises meeting facilitators to ensure they stay focused on capturing what people say, not evaluating participants’ input. That comes later.
“After the AAR, a subject expert is brought in to do a root cause analysis and validate the lessons learnt,” says Fry.
“The one thing that really drives people to contribute is when they see the lessons learnt, not just being observed and documented, but also actioned and making a difference in the company,” he adds.
“A lesson is not learnt until people have changed behaviour.”
“When the process works well, staff feel valued having their ideas recognised, so it’s great for motivation. Workers also start to reflect and share anecdotal stories of other incidents that have occurred, bringing back the corporate memory that gets suppressed through busyness.”
This unlocking of workers’ energy and sharing of their experiences confirms Sundheim’s counter-intuitive observation that creating a safe-to-fail workplace can actually enhance performance.
“Once people realise they can take smart risks and will be supported by their boss to extract the learnings if it doesn’t work, that creates a great sense of aliveness,” says Sundheim.
“Innovation and employee engagement are two sides of the same coin.”
The biggest challenge of all when trying to create a fail-friendly workplace culture is leadership, Sundheim says. “Leaders need to be willing to go first and role model it.”
When Australian property group Mirvac announced its internal innovation program called “Hatch” early in 2014, it called on its leaders to walk the talk.
“Part of the program involved having the most senior people in our organisation stand up and share personal and business stories of mistakes made and lessons learnt,” says Christine Gilroy, group general manager of innovation at Mirvac.
“The staff were glued to every word. It was so refreshing. We now think of success as when learning occurs and failure when we don’t share and learn from our mistakes.”
WHO IS ON THE FLEARNING CURVE?
Engineers Without Borders: This organisation’s Failure Reports from staff and volunteers aim to create a culture that encourages creativity and calculated risk taking.
This pharmaceutical company has hosted Failure Parties since the 1990s to honour intelligent, high-quality scientific experiments that failed to achieve the desired results.
ETSY: The online seller uses a Blameless Postmortem practice initiated by its CEO, Chad Dickerson. It involves a team meeting within 24 hours of something going wrong to identify causes, not culprits. Dickerson believes that a blameless culture makes it easier for people to take responsibility for their mistakes and learn from them.
Tata Group: This Indian conglomerate runs its internal Innovista competition to support innovation among its companies. The Dare To Try Award recognises the most novel, daring and seriously attempted ideas that did not achieve commercial success.
5 crucial questions for flearning
At its core are these five questions:
- What was supposed to happen?
- What actually happened?
- Why was there a difference?
- What can be learnt?
- What will we do about it?