When is failure an option?


Photo - author's own

Photo – author’s own

Learning from our mistakes is often touted as a powerful learning method. Many notable humans give testament to its value but really, no one likes to fail. In the world of business, it seems that some organisations are interested in failure in a new measure – the return on failure!

A recent Harvard Business Review article reviews this concept of the value of failure. Presented in the context of innovation, the article explores ways of extracting value from failure, measuring it, improving the return from it and boosting its benefits while controlling costs.

The formula

Return on failure ratio:               assets
                                                   invested resources

The key to a better return is to keep investments low. The “assets” are gained from the experience and may include information about customers, markets, operations, the team and yourself. Increasing these assets boosts returns.
~ Julian Birkinshaw and Martine Haas, 2016, p.90.

Innovation means embracing failure
In times of great uncertainty, businesses understandably become risk averse. Management processes are designed to maximise efficiencies. This means controlling the variables like budgets, resource allocation and risk. However, this predictability may well stand in the way of growth.

31% of survey respondents identified a risk-averse culture as a key obstacle to innovation
2015 Boston Consulting Group cited by Birkinshaw & Haas, 2016, p. 90.

Even though people have taken the control and efficiency approach to business in the past, a looser arrangement with failure as part of legitimate  business management strategy may be needed now. The idea that failure is unacceptable would resonate with many businesses and many people. How do you make the change, so that failure is acknowledged as a source of learning, and that such risk-taking is tolerable?

Acceptance of failure
One organisation, Engineers Without Borders (EWB), tackled this by publishing a Failure Report (their first in 2008). Now annual, this report details each year’s failures, and includes the intentions behind the projects, what happened and the lessons learnt. Reportedly, this was one of the not-for-profit sector’s first steps towards making failure OK (Imber, 2016, p.34).

Reward mistakes?
Indian conglomerate Tata Group encourages failure by including a Dare to Try category in their annual innovation awards. Dare to Try is reserved for “ideas attempted that have fallen short of achieving optimum results” (Imber, 2016, p. 35).

There are of course mistakes that have been turned into successes. Take these products for example:

WD-40 named because it was the 40th attempt to create a rust protector and solvent. This resulted after 39 failures.
Bubble-wrap was originally a failed attempt at a trendy new wallpaper, then house insulation material before success when used by IBM as packaging material.
Dyson vacuums achieved success after testing 5,271 prototypes before finally finding a vacuum that worked.
~ Patel, 2015, 8 Successful Products That Only Exist Because of Failure

How do we learn to fail?

  1. Learn from every failure. Reflect on projects/initiatives that have failed. Include what the experience/process has taught you, what benefits have been gained and where things can be changed.
  2. Share the lessons. Feed the review into a broader conversation, in other business areas. Keep these brief, to the point and undertaken frequently.
  3. Review the pattern of failure. Take a big picture view of the failures. Is there learning happening? Are lessons being shared? Is business strategy being improved?

What does it take personally?
It takes courage to take risks knowing you may fail. It takes courage to admit failure. Like all things though, we can learn to embrace these behaviours and experience the learning. What’s important here is mindset. With a mindset of curiosity, by socialising the ideas and sharing the experiences the benefits can be amplified. It all depends on how you frame it.

Failures, repeated failures, are finger posts on the road to achievement. One fails forward toward success.
~ C. S. Lewis

Do you have any tips to share on how to succeed with failure?


  • 8 Successful Products That Only Exist Because of Failure by Sujan Patel in Forbes, 16 January 2015.
  • Increase Your Return on Failure by Julian Birkinshaw and Martine Haas, Harvard Business Review, May 2016,(p 88-93)
  • How to Turn Failure into Success by Amantha Imber, Boss Magazine (Financial Review), May 2016, Vol 17, (p 34-35)


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