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New research on failure from Harvard Business School faculty on issues including how to sink a startup, how powerful people lose their moral bearings, and how managers can encourage workers to solve problems in response to operational failures.
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Why a Failed Startup Might Be Good for Your Career After All

by Sean Silverthorne

Go ahead and launch that venture. Even if it fails, the experience you gain will likely earn you a job that's more senior than those of your peers, says research by Paul Gompers.

How to Recover Gracefully After Shutting Down Your Startup

by Danielle Kost

It’s hard to call it quits on a business venture, but entrepreneurs can wind down a struggling startup while keeping their reputations and sanity intact, says Tom Eisenmann. The first step is knowing when to accept defeat. Open for comment; 0 Comments.

The Hidden Cost of a Product Recall

by Danielle Kost

Product failures create managerial challenges for companies but market opportunities for competitors, says Ariel Dora Stern. The stakes have only grown higher. Open for comment; 0 Comments.

Creating the Market for Organic Wine: Sulfites, Certification, and Green Values

by Geoffrey Jones and Emily Grandjean

Certified organic wine remains a tiny percentage of the global wine market. This paper provides a case study of failed new category creation, analyzing the challenges for the organic wine market over time, including overcoming an initial reputation for quality, wines being labeled with multiple names (“organic,” “biodynamic,” “natural”), and competing certification schemes.

Excellence Comes From Saying No

by Michael Blanding

In a new course designed by Frances Frei and Amy Schulman, business and law students help each other define and achieve their own interpretations of success. Lesson one: You can't be great at everything. Open for comment; 0 Comments.

How to Sink a Startup

by Garry Emmons

Noam Wasserman, author of the recently released book "The Founder's Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup," discusses ill-advised entrepreneurial behavior. From the HBS Alumni Bulletin. Closed for comment; 0 Comments.

Why Leaders Lose Their Way

by Bill George

Bill George discusses how powerful people lose their moral bearings. To stay grounded executives must prepare themselves to confront enormous complexities and pressures. Open for comment; 0 Comments.

Why Companies Fail—and How Their Founders Can Bounce Back

by Carmen Nobel

Leading a doomed company can often help a career by providing experience, insight, and contacts that lead to new opportunities, says professor Shikhar Ghosh. Closed for comment; 0 Comments.

Clay Christensen’s Milkshake Marketing

by Carmen Nobel

Many new products fail because their creators use an ineffective market segmentation mechanism, according to HBS professor Clayton Christensen. It's time for companies to look at products the way customers do: as a way to get a job done. Closed for comment; 0 Comments.

How to Fix a Broken Marketplace

by Carmen Nobel

Alvin E. Roth was a co-winner of the Nobel Prize in Economic Science this week for his Harvard Business School research into market design and matching theory. This article explores his research. Key concepts include: Successful marketplaces must be "thick, uncongested, and safe." Sufficient "thickness" means there are enough participants in the market to make it thrive. "Congestion" is what can happen when markets get too thick too fast: there are heaps of potential players, but not enough time for transactions to be made, accepted, or rejected effectively. "Safety" refers to an environment in which all parties feel secure enough to make decisions based on their best interests, rather than attempts to game a flawed system. Closed for comment; 0 Comments.

Operational Failures and Problem Solving: An Empirical Study of Incident Reporting

by Julia Adler-Milstein, Sara J. Singer & Michael W. Toffel

Operational failures occur within organizations across all industries, with consequences ranging from minor inconveniences to major catastrophes. How can managers encourage frontline workers to solve problems in response to operational failures? In the health-care industry, the setting for this study, operational failures occur often, and some are reported to voluntary incident reporting systems that are meant to help organizations learn from experience. Using data on nearly 7,500 reported incidents from a single hospital, the researchers found that problem-solving in response to operational failures is influenced by both the risk posed by the incident and the extent to which management demonstrates a commitment to problem-solving. Findings can be used by organizations to increase the contribution of incident reporting systems to operational performance improvement. Key concepts include: Operational failures that trigger more financial and liability risks are associated with more frontline worker problem-solving. By communicating the importance of problem-solving and engaging in problem-solving themselves, line managers can stimulate increased problem-solving among frontline workers. Even without managers' regular engagement in problem-solving, communication about its importance can promote more problem-solving among frontline workers. By explaining some of the variation in responsiveness to operational failures, this study empowers managers to adjust their approach to stimulate more problem-solving among frontline workers. Closed for comment; 0 Comments.

Risky Business with Structured Finance

by Julia Hanna

How did the process of securitization transform trillions of dollars of risky assets into securities that many considered to be a safe bet? HBS professors Joshua D. Coval and Erik Stafford, with Princeton colleague Jakub Jurek, authors of a new paper, have ideas. Key concepts include: Over the past decade, risks have been repackaged to create triple-A-rated securities. Even modest imprecision in estimating underlying risks is magnified disproportionately when securities are pooled and tranched, as shown in a modeling exercise. Ratings of structured finance products, which make no distinction between the different sources of default risk, are particularly useless for determining prices and fair rates of compensation for these risks. Going forward, it would be best to eliminate any sanction of ratings as a guide to investment policy and capital requirements. It is important to focus on measuring and judging the system's aggregate amount of leverage and to understand the exposures that financial institutions actually have. Closed for comment; 0 Comments.

JetBlue’s Valentine’s Day Crisis

by Julia Hanna

It was the Valentine's Day from hell for JetBlue employees and more than 130,000 customers. Under bad weather, JetBlue fliers were trapped on the runway at JFK for hours, many ultimately delayed by days. How did the airline make it right with customers and learn from its mistakes? A discussion with Harvard Business School professor Robert S. Huckman. Key concepts include: JetBlue's dependence on a reservations system that relied on a dispersed workforce and the Web broke down when thousands of passengers needed to rebook at once. A crisis forces an organization to evaluate its operating processes rapidly and decide where it needs to create greater formalization or structure. Closed for comment; 0 Comments.

The Hard Work of Failure Analysis

by Amy Edmondson & Mark D. Cannon

We all should learn from failure—but it's difficult to do so objectively. In this excerpt from "Failing to Learn and Learning to Fail (Intelligently)" in Long Range Planning Journal, HBS professor Amy Edmondson and coauthor Mark Cannon offer a process for analyzing what went wrong. Closed for comment; 0 Comments.

Enron’s Lessons for Managers

by Martha Lagace

Like the Challenger space shuttle disaster was a learning experience for engineers, so too is the Enron crash for managers, says Harvard Business School professor Malcolm S. Salter. Yet what have we learned? Closed for comment; 0 Comments.

Determinants of Early-Stage Startup Performance: Survey Results

by Thomas R. Eisenmann

In this study of 470 founders/CEOs and their management practices, startups that employ lean startup techniques had better valuation outcomes. So did ventures that balanced hiring for skill versus attitude and, more broadly, made early efforts to professionalize human resource management.