Early in his research at the U.S. Army War College, Charles Parry asked a lieutenant colonel about After Action Reviews (AARs), a process for carrying forward lessons learned through experience. "He said it is very simple," Parry recalls. "That is just how we do leadership in the Army."

While companies today embrace failure as a cost of  innovation and risk taking, failing repeatedly and in the same way won't cut it. Parry, owner of Signet Research & Consulting in Jaffrey, New Hampshire, helps organizations develop continuous learning cultures based on military practices--specifically AARs, which were developed by the Army to ensure units understand and build on past successes and failures.

To learn about AARs, in 2004 Parry and then-colleague Marilyn Darling began studying the 11th Armored Cavalry Regiment, which serves as the opposing force (OPFOR) at the U.S. Army's National Training Center. Brigades visiting the center test themselves by battling OPFOR, a standing "enemy" that acts as a whetstone for sharpening decision making and skills in preparation for real battle.

"Every month they had a new enemy with completely different capabilities," Parry says. "Even though they had the home-court advantage, they had to completely change up what they were doing." OPFOR was so consistently successful that the Army began publishing its past plans and maneuvers for visiting brigades to study. "That way OPFOR couldn't work out someone's perfect routine and keep repeating it and expect to surprise the enemy," says Parry. "It forced innovation."

Parry adapted AARs for business use and coined the term After Review Cycle (ARC) to capture before-action planning as well. Two categories of action lend themselves to an ARC, he explains. First: activities that are repeated regularly but not often, such as quarterly presentations to investors. "In between those presentations are three months during which people get fuzzy about what worked, what didn't, and where they thought they could do better," Parry says.

The second category is imminent new challenges, for which leaders can prepare by running ARCs on activities that share some of the same processes. "If you're going to do a series of acquisitions in the next couple of years, then you might AAR a major capital investment to work out the nuts and bolts," Parry says. "That way you get really good at what needs to be done in a high-risk acquisition."

Getting everyone on the same page.

Perhaps the most valuable part of an ARC takes place in a Before Action Review (BAR) session. The first order of business is to clarify the "leader's intent." (In the military it's called "commander's intent.") Here is where leaders discover how well they've communicated their initiatives and whether everyone understands the marching orders. "The core of [it] is to compare what was intended with what actually happened," Parry says. "If you don't have a clear picture of what was intended, then any comparison is inherently weak."

The simplest approach is to ask those who will execute the initiative--typically the leader's direct reports or function heads--to repeat back what the team will do and why it will do that. "Maybe they've got it perfectly. Then there's no problem," Parry says. "Or maybe they're off in some way. Then the leader says, 'I want more emphasis on this and less on this. Focus on these people and not on those.'"

The "why" aspect is crucial. It is tempting simply to state what you want done and then fire the starter pistol. But when employees understand the thinking behind a particular strategy, they often come up with better alternatives. And as circumstances shift, a powerful, shared understanding helps them make better decisions, even if they are unable to consult with the boss. "The military tends to be really good at this for the simple reason that if I am leading this unit into conflict, I might get shot," Parry says. "Then who are they going to ask?"

After the leader establishes intent, the BAR discussion turns to anticipated challenges, critical factors, and lessons from earlier activities that might be relevant.

Lining up intent and actions.

Companies often do AARs poorly, Parry says. Typically, HR brings in a third party to facilitate the session. Leaders tend to sit in the back of the room, perhaps because they don't want to discuss their own mistakes. Junior people who have little to lose sit in front.

In the Army, by contrast, the senior leader runs the AAR. His immediate reports sit in the first row; and others sit farther back in descending order of rank. The senior leader's involvement ensures that people leave the meeting with concrete actions for which they're held accountable. "The leader models it by saying, 'Here is what I am going to do based on this conversation,'" Parry says. Consequently, military AARs always produce results. "People don't just say 'That was a good conversation' and disband,'" Parry says. That's how companies should do it as well.

In the AAR the leader restates the intent. Then the team reviews what actually happened compared to that intent: where intent and actions did not line up, what went wrong, and how we can do better. (Blame has no place in the room.) If intent and action did not line up but somehow produced a better-than-expected result, what went right? And how can we do it again?

Parry stresses that AARs are less about lessons learned--looking back--than about identifying best practices and potential pitfalls for the next challenge. He suggests creating a timeline for the action that is under review, then adding to it knowledge and insights gained during the AAR for later use. Returning to the acquisition example, the timeline might come to incorporate best practices for matters like due diligence, financing, and systems integration. What emerges is a project management guide that says, "This is how we do this thing."

"Learning from our mistakes sounds good. But unless you're learning from the past in service to the future, it's not that important," Parry says. "You don't want to do an inquest. You want people leaning forward."