Tuesday, February 27, 2024

Failure - learning or leavening?

 As with many other distinctions between large companies and startups, established products and new ideas, there are distinctions between types of failure.  For most corporations, failure is abhorrent, because failure signals a breakdown in an existing product, risk, an inability or unwillingness to follow an established process.  Failure is a loss of revenue, an added cost, a lack of judgement.

A bias against "failure"

We're taught from an early age that failing at anything demonstrates weakness and unreliability.  Failure to show up, failure to get the right answers, failure to get good grades.  Why do you think the most creative time in most people's lives is between 3 years old and say 7 or 8 years old?  Because children are encouraged to be creative and aren't held accountable to getting the "right" answer until grade school.  Then the educational system does all it can to reinforce norms and standards, which is important if you are cracking the genome or building a bridge, but limits creativity and innovation. 

Moving on, most people graduate and go to college, where they are expected to get the right answers and avoid failing, which, as far as I can tell, must be difficult to do when the average Harvard student's GPA is well over a 3.5.  We aren't challenging people to think, or to question what they believe, or what their professors tell them to think.  Again, some physical realities, like gravity, must be accepted, but new ideas and new perspectives should be encouraged.  As Copernicus, Galileo, Newton and others have shown, sometimes accepted knowledge is wrong.  To paraphrase George Bernard Shaw - reasonable people conform their thinking to what's reasonable.  Only unreasonable people challenge the status quo, so all progress is due to unreasonable people.  

Then, people go on to careers or professions, where they are expected to get the right answers, conform to existing processes and systems.  Innovators will tell you that the only real changes that happen in industries will occur as new entrants introduce new concepts or radically different business models.  The reason is that the corporations in the industry have an existing stake in how things operate and would prefer to evolve slowly rather than disrupt how things work today.

Failure in context

So, we find failure in most instances as a significantly negative outcome, when it needs to be considered in its context.  Failure to conform?  Failure to accept the existing way of doing things?  Failing to acknowledge accepted rules and norms that may no longer hold true?  Most learning is based on trying and failing and having the willingness to try again and to learn.  Without failure, the individual or the company is not trying hard enough and certainly isn't learning.  As skiing instructors say - if you aren't falling occasionally, you aren't pushing yourself to get better.

Imagine if the idea of Airbnb had been proposed to the Hilton executives.  The idea is valid (demonstrated by Airbnb itself) but the idea could run afoul of existing rules, norms, processes and perspectives within Hilton and the other hotel chains.  People who advocated for such an idea as managing the rental of private property - rooms in a house for example - would be laughed out of the room.  It took people who were willing to try, to learn, to adapt and who weren't bound by the existing norms to make the idea work.  

Why did Steve Jobs place the original MacIntosh development team in a different office and put a pirate flag on top?  Because he wanted them to think differently than the rest of Apple did and felt that they could not engage or be infected by existing ideas.  It would have been interesting to have seen the alternative future, where the MacIntosh was not successful, to understand what his reaction to trying and failing would have been.

We need to leave room and get far more comfortable with failure, if by failure we mean trying out new ideas, testing established norms, rethinking how we go to market or what a new business model should look like.  Companies that fail to question, fail to test and fail to learn are simply just failing slowly.  Better to fail quickly in a more controlled manner and learn, than to wither away over time.

These actions require a different intent, and different management styles and investment criteria.  Many larger companies think that this is the role of entrepreneurs and start-ups.  They arrogantly believe that small firms can take the risk, and the larger firms will snap up these smaller firms and integrate their solutions.  Ask Google what it felt like to reject Yahoo!'s bid or ask Marriott or Hilton if they should have been the Airbnb before Airbnb.

The impact of failure

One of the most important aspects of failure should be its impact on the individual or company.  For example, if the failure is associated with a tried-and-true process or framework, then concerns should be raised. If the failure is associated with trying a new product or process for the first time, then the tolerance for failure should be relatively high.

There are at least two lenses we should use to evaluate a failure - experience and impact.  If the company has experience and the failure is in a known process or capability, then failure should be considered a problem.  If not, then perhaps a learning opportunity.  Equally, we need to evaluate the impact of a failure.  If a bridge falls because of faulty math, or people become ill because of a poorly blended product, that is an intolerable failure.  On the other hand, if a prototype fails in a simulated test, then we've done what we hoped to do - learn something.

Management teams have become too concerned about "failure" and don't realize its value or place in an organization.  If companies are truly "learn it all, not know it all" as Microsoft claims to be, then failing and learning is a natural consequence.

Learning from failure

Today, most firms need to be constantly learning, constantly adapting.  That means that they need to be trying out new frameworks, new models, new processes.  Some of these will "fail", and from that failure the company need to determine if the failure is catastrophic, and the attempts must cease (the natural implication) or if the work or team needs to change.  Further, companies need to quickly assimilate the insights from failure and adapt.

The purpose of the title of this post - learning or leavening - is to point out that all too frequently, all failure leads to leavening rather than learning, and in the future, we've got to be more comfortable taking chances, testing hypotheses and learning from failure.

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posted by Jeffrey Phillips at 7:52 AM


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