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Failing to Understand Failure Is Not an Option

Everyone loves the story of the successful founder who messed-up along the way. But do we really tolerate employees who stumble? Not often--in real life anyway.
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We all appreciate a good comeback story. A person tries their hand at something, fails (the more spectacular the collapse, the better), and then stages a successful second act. It's a classic. That's the heart and soul of all those tales of company-creation derring-do.

Over the years, the idea of failure has taken on special significance in the world of entrepreneurship, where it is treated as a badge of honor--as something indispensable. (See "Welcome to the Church of Fail") A few years ago, in fact, the notion of "fail fast" became quite popular among many entrepreneurship programs.

But, is our embrace of failure mostly rhetorical? Do we really mean it? Do we even practice failure management at our own companies?

Take a look around the "entrepreneurship industry" The programs, events, blogs, videos, for the most part, celebrate successful entrepreneurs. These are important, of course. As my colleague at the Kauffman Foundation, Paul Kedrosky, says the more we expose people to successful entrepreneurs, the more entrepreneurship we'll get.

So why is bringing failure into the equation so important? Well, in terms of actually learning, and of building companies, examples of success are of limited usefulness. This is because the exploits of many of the entrepreneurs are, as a baseball writer wrote recently, "unrepeatably good." (No one, after all, does Jeff Bezos better than Jeff Bezos.)

But actually managing and learning from failure is a lot harder than giving props to business legends who overcame hard times. The challenge of opening ourselves up to failure--personal, business, or otherwise--is sharpest in our daily organizational lives. And that's where we fall short. I'm sure we all call ourselves tolerant of failure and say that our culture is forgiving and supportive. Yet for any given idea or project that doesn't pan out it is often not treated very well in anyone's organization--if tolerated at all.

For one thing, nobody likes to admit they were wrong, or that they made a mistake. That's why the first impulse of most of us in the face of failure is to cast around for other people to blame or circumstances that we couldn't control. This is true even in the most collegial offices. This is true in any company whether it has 3 or 300 employees. We're only human after all--the stories we tell ourselves define us, and we all do everything we can to preserve that self-narrative. No one is exempt from this.

The way one manages failure will shape your company's culture on a daily basis, and subtly push people in a certain direction. It's often a case of focusing on an employee's strengths and avoiding their weaknesses. (And the same goes for you, too, by the way.) It's acknowledging that a failed project was an against-all-odds risk--but a risk worth taking.

In other words: Don't just read about failure and nod in agreement; don't just sit through seminars celebrating its merits. Actually try to make it work for you.

Last updated: Nov 26, 2013

DANE STANGLER | Ewing Marion Kauffman Foundation

Dane Stangler is the vice president of research and policy at the Ewing Marion Kauffman Foundation.




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