Failure has always been a natural facet of business — and indeed life. But in recent years, the concept has acquired a counterintuitive luster. “Embrace failure” runs the maxim. The leadership guru John Maxwell implores us to “fail forwards”. The author Elizabeth Day has just published How To Fail — which summarises everything valuable she has learnt from bruising personal experience. The underlying narrative is seductive: all failures contain within them the seeds of success.
This bears deeper examination — and for good reason. The Harvard Business Review has stated that success in the 21st century involves competing on differentiators other than price and prioritising increasing revenue over reducing cost. This points to the need for innovation — the process of dreaming up new things and making them real. The risk of failure is ever-present every time anyone tries to do this. What will succeed and what will fall short is rarely obvious in advance, and often not without a lengthy period of testing and learning. Our willingness to face these risks does have some bearing on how likely we are to succeed.
Yet the reality is that many businesses are good at embracing failure — right up until the moment they fail, at which point they become good at embracing blame. The tangible pain of lost time and money often beats the intangible promise of future success.
So how do you embrace failure well? The answer lies in two practices. Each of them also contains clues as to why embracing failure is so difficult in reality.
Seek the silent evidence
By definition, failure is an outcome, but because the outcome is negative the associated evidence is often buried by time, vested interests or circumstance. Silent evidence can include business failure rates, redacted project reports, the experience of ex-employees, and buried commercial data. This sort of evidence can point to an uncomfortable truth: not every failure does contain the seeds of future success. Sometimes a failure is just that, and not much more.
The problem the seeker faces, of course, is that the evidence in question is silent. But silence doesn’t mean absence. For example, failed businesses may no longer exist — but their founders usually do.
Bear in mind that hunting negative data can be anathema to innovators, who are typically upbeat, optimistic types who are prone to see opportunity where others see only problems. But worries about “buzz-kill” are no excuse. A forensic search for, and examination of, silent evidence can often reveal hidden truths that will make innovation more efficient and/or cap the costs of failure. Optimism is a wonderful thing — when people also have their eyes wide open.
Hunt for the hidden incentives
“What gets measured gets done” runs the saying — but this is only half the story. In reality, what gets measured and rewarded gets done.
There are two kinds of hidden incentives. The first is financial — and includes factors such as salaries, bonus payments and share price. To state the obvious, most businesses do not pay out bonuses on the basis of failure. But other sorts of financial disincentives also exist. There is little point announcing your intention to be “digital first”, for example, if your Exec team is remunerated largely on the performance of non-digital routes to market.
The second kind of hidden incentive is psychological, and is to do with security and status. In neurological terms, we are all primitive creatures who are conscious of the need to hold and enhance our position in the tribe. And for good reason: for a long time in human history, expulsion from the tribe posed a significant threat to an individual’s life. The wiring of our brains has not yet caught up with the fact that (for the most part) the world doesn’t work that way.
So the preservation of status and security remains the hidden incentive that drives a great deal of how people behave at work. It’s why we fear change, and why we fear failure. It’s also why we bury the evidence of failure where we can — creating the silent evidence problem. The enhanced status and success of the tribe also explains why we prefer to reward success.
Embracing failure runs counter to our most base survival instincts and the very basis on which most businesses reward the behaviour of their people. So it’s the hardest of asks. How to do it? Start by acknowledging that truth — to yourself and those around you. Then consult all the available evidence you can lay your hands on, silent and otherwise. Failure is punishing, counterintuitive — and necessary. It is always worth considering upfront how to mitigate its impact.
Originally published on Forbes.com