Let me give you a quick insight into one really useful thing we do here at Grant Thornton – our ‘failure talk’. When we get our senior members of the marketing department together, however brief the meeting, we always block out 10 to 15 minutes to discuss failure. A volunteer will explain how they 'failed' at something; they’ll explore what went wrong and share the lessons.
Why do we do this? Because we want to be more comfortable with failure. By talking openly, we all become more at ease with the prospect of failing in our own ventures and, in turn, it makes us more adventurous and less ruled by fear. Ultimately, we focus on failure because we want to innovate - and you can’t have one without the other.
If you have a culture that encourages people to try something new without fear of failure, then there are at least four positives.
An admission of failure or the wrong decision lets you move on quickly. A great example comes from my team, the Carolina Panthers. In 2010, they drafted quarterback Jimmy Clausen amid great hype, but it soon became clear he wasn’t NFL material. The Panthers admitted their mistake and drafted Cam Newton, who went on to be NFL MVP and led them to the Super Bowl. By cutting their losses with Clausen, they avoided years of struggle. In business, recognizing failure early can pave the way for success.
Businesses often resist a change of direction because it can be seen as an admission of failure and because they are reluctant to invest further. However, if the current situation is hampering the business, then further investment and a fast change of direction could reap benefits sooner.
Too often we stand by bad decisions for the worst reasons. We’re afraid of upsetting the person who came up with the idea, especially if they happen to be our boss. The Gambler's Fallacy and Loss Aversion are two well-documented cognitive biases that cripple investors when the value of their shares fall. If you are afraid of failure you are at risk of trying to spin every situation for the better. That’s dangerous. Only when your emotions are calm, because you're not afraid of failure, can you clearly see the positives and negatives of each scenario without distortion.
Employees must feel free to share ideas, no matter how large, small, sensible, or crazy. They’ll only do so if they feel supported. The Media Lab at MIT encourages radical ideas, and when I was at Bank of America, we designed a sensor to track customer moods. It would alert staff if a customer was angry or happy, allowing them to respond accordingly. While we didn’t adopt it, it shows how innovation thrives in a creative environment.
To win big, you must take risks, even though failure is part of the journey. Babe Ruth, in his early days around 1918, led the American League in home runs, but also had the most strikeouts. He embraced this risk, knowing it would lead to more home runs despite the chance of failure. In business, the balance of risk and reward is crucial. Identify what you’re willing to risk failure for in pursuit of greater success, and focus on the things that truly matter, rather than getting bogged down by the minor setbacks along the way.
I believe you have no choice but to get comfortable with failure, to take calculated risks, encourage a culture of trial and error, and learn by sharing experiences. The key is to ensure you have effective feedback loops – re-deploying resource and investment towards those ideas that are working out. Innovate through trial and failure, be agile and nimble and instil a culture that lets everyone thrive in an environment where they are encouraged to have ideas.
We use failure talks to hone our company culture. I’d love to hear what you do- if it’s good, we'll try it!
To share your experiences with Grant Thornton and find out more about how your company can build a culture that learns and benefits from failure, please contact gtimarketing@gti.gt.com