Failing to Learn and Learning to Fail (Intelligently): How Great Organizations Put Failure to Work to Improve and Innovate
Executive Summary — Successful companies see failure as a part of the innovative process, but there are social (organizational) and technical (skill-based) reasons why it is difficult to turn failures into learning opportunities. First, executives need to develop the skills to probe failures and analyze the root causes. Then improve management's technical skills in problem diagnosis, statistical process design, and qualitative and quantitative analysis. Organizationally, executives should create an environment where people are encouraged to identify failures, rather than encourage a "shoot the messenger" mindset. Key concepts include:
- Learn from failure by identifying, analyzing, and discussing it, and through deliberate experimentation and risk-taking.
- It is important to learn from small everyday failures rather than wait for a catastrophe to force change.
- Break down tasks and provide feedback and specific information on mistakes right away. Use the failure data to educate the organization.
The idea that people and the organizations in which they work should learn from failure has great popular support and even seems obvious. However, organizations that systematically and effectively learn from failure are very rare. This paper provides insight into what makes learning from failure so difficult to put into practice - that is, we address the question of why organizations fail to learn from failure. We identify pernicious barriers embedded in both technical and social systems that make collective learning processes unusual in organizations, and present recommendations for what managers can do to overcome these barriers.