4 Ways to Fail at Failing

As a recent special issue in the Harvard Business Review points out, failing well is a critical skill that differentiates organizations that can learn and even benefit from failures. But most companies I work with fall victim to one or more of these barriers to making the most of the failures they have.[wcm_restrict]

Leave the definition of success fuzzy – I conduct a lot of post-mortems – you know, those meetings where warring parties come together to argue about whose fault it was that something went horribly wrong. Actually, when well designed, post-mortem meetings can be quite productive. I begin by going back in time and reconstructing what people were thinking at the time the project or initiative was started. Amazingly, by the time it has failed, the original goals for the project are often forgotten and there is no documentation or human memory of what they were. This situation creates the conditions for blaming and acrimony, none of which add value. So, before you start any new strategic project, get it in writing: what are we trying to accomplish, by when, and whose responsibility will it be to get to closure?
Don’t plan the disengagement – Organizations have processes for just about everything, it seems. Ironically, however, when it comes to handling failure, in most organizations it’s an awful, improvised process that leaves trust, careers and feelings in tatters. It doesn’t have to be that way. Instead, I recommend developing a disengagement plan. In a solid disengagement plan, all those with a stake in the project are considered and it is someone’s specific job to find a way to make them if not whole, at least to address the worst of the issues that a closure means for them.
Overspend – Big flops are bad flops. These are the ones that leave you scratching your head and asking “what were they thinking?” Cue recent examples such as Cisco’s $590 million acquisition of the company behind the Flip video camera or Google’s $200M+ exit from the real-life radio ad business. One could argue (as some have done) that there will be valuable learning coming out of these negative experiences, but surely some lessons didn’t have to be so expensive! Instead, I recommend following the old Silicon Valley adage: Fail Fast, Fail Cheap, Move On.
Have no way to distinguish bad luck from bad management – Failure creates a paradox: On the one hand, nobody likes failure; while on the other, you don’t want to reward managers who fail foolishly. What is needed is some way to determine whether the executives in charge made the right decision given what was known at the time, and therefore whether the failure was the result of something they should have known. I find that keeping careful track of assumptions, particularly at key project turning points, can help make this distinction. This in turn, makes it possible to reward ‘intelligent’ failures and prove to people that your organization can take risks and learn, even when things go wrong.

Of course nobody likes to fail. Failure, however, is one of the few things you can be guaranteed in uncertain and high-velocity environments. The real skill lies in making the most of it.

On October 3-7, 2011, Rita McGrath, Associate Professor, Management at Columbia Business School, will teach ‘Leading Strategic Growth and Change’ at Columbia Business School Executive Education. Professor McGrath developed the program in order to instruct participants on how to thrive in rapidly changing, highly uncertain environment. To learn more, visit the Columbia website.[/wcm_restrict][wcm_nonmember]

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About the Author

Rita McGrath, a Professor at Columbia Business School in New York, is one of the world’s leading experts on strategy in highly uncertain and volatile environments. She works with both Global 1,000 icons and smaller, but fast-growing organizations. Some current clients include F-Secure, Nokia, Microsoft, (and its CEO Summit), AXA Equitable, General Electric, Novartis, PPG Industries, the Stena Group and the World Economic Forum. She is a popular speaker and consults to senior leadership teams. In 2009, she was inducted as a Fellow of the Strategic Management Society, an honor accorded to those who have had a significant impact on the field. To read Rita’s complete biography, click here.