How to get organizations to learn from their successes and failures 

Talking about failure in organizations is fashionable. We are increasingly hearing that allowing mistakes within companies is a path to learning, building resilience and innovation. But what about the learning that comes from success? How can we learn in both experiences?

As children, we learn from experiences and failures: we learned to walk and ride a bicycle after several falls. However, when we become adults, the costs of showing our faults are greater. Showing ourselves vulnerable and taking off the heroic leader suit requires courage. Therefore, we tend to hide mistakes, instead of learning from them.

When James Quincey took over as CEO of the Coca-Cola Company in early 2017, he called on his employees to overcome their fear of failure, stating that if they weren’t making mistakes, they weren’t trying hard enough.

In recent years, spaces have emerged in the world to celebrate failure. One of them is Fuck up nights, a movement that was born in Mexico City and today takes place in 238 cities. These are events where different people share their stories of failure in business and projects.

Another case is the museum of failure. The exhibit consists of a collection of innovative products and services that failed. Its objective is to promote in visitors a “learning from experience”. The museum has a permanent version in the city of Helsingborg, Sweden, and has an itinerant exhibition that travels the world.

Different types of errors

On this path, it is important to keep in mind that not all errors are the same and, therefore, neither is the learning that arises from them. Amy Edmondson, a professor at Harvard University, classified mistakes into three categories based on their characteristics:

Avoidable errors in repetitive processes: they are the consequence of a lack of attention or skill in standardized processes. They can be avoided with proper training and support.

Inevitable failures in complex contexts: inherent to the uncertainty of a decision. Needs, people and situations that did not coincide previously are combined. A quick identification of the events that caused the error can be essential to correct the course and avoid major consequences.

Intelligent failures at the frontier: they are the failures that are the result of innovation and are positive, since they provide new knowledge that facilitates growth. You experiment to make mistakes quickly and capitalize on what you have learned to improve the creation process. They are the typical failures that promote innovation processes, such as Design Thinking, to learn and take quick feedback from experience.

How to learn from mistakes?

Learning from mistakes in an organization is not automatic and requires a conscious decision to do so. Although there is no single formula to achieve this, there are some key aspects that we must develop in a company to ensure that failures are reported and positively capitalized.

Accepting failure. The first challenge is to accept that failures inevitably exist. An organizational culture that recognizes failure as an inherent part of its processes and communicates what kinds of failures are accepted will be less likely to sweep them under the rug.

Balancing rewards and punishments. Declaring that failures are accepted is not enough if, in the face of errors, the question, “who did this?” arises and then those responsible are punished. Focusing on rewarding learning, and asking “what happened”, instead of “who did this”, would help to better compensate rewards and punishments, motivating people to be more encouraged without fear of being wrong.

Allocating time to learning. Sometimes the speed of work leads us to ignore errors in search of a quick solution and stopping to analyze what we were wrong about is left in the background. However, the time dedicated to detecting the error and analyzing it can bring us greater benefits than the cost of those minutes.

Sharing with others. Making a mistake, learning from the experience, and not sharing it with others is not only selfish, but also limits learning. To effectively manage knowledge, companies that actively promote learning from failure create spaces and channels so that these lessons can be used by everyone. For example, a bank in Spain installed the “failure of the month”, where it rewards the winner for their learning and publishes the experience so that others can internalize and use it.

Even more difficult: learning from success

While learning from failure is challenging for organizations, learning from success is even more difficult. When the results are good and everything is going positively, we tend to believe that the results were only a direct consequence of the good decisions we made. However, successes can also bring us positive learning that is worth analyzing.

On the other side of the inevitable failures in complex contexts, in successful cases, a correct identification of those uncertain elements that were positive can help us to better map the risks for future occasions.

On the other hand, a successful outcome does not ensure that all intermediate decisions have been correct. Sometimes we make mistakes along the way that do not negatively affect the final result, but their detection and analysis can generate positive learning for the future and obtain even better results.

Finally, stopping to evaluate which were the well-made decisions and the correct actions that led us to success, is a key learning that we should not skip. Understanding what behaviors we must replicate in future situations is essential in any organization.

In short, proper knowledge management within companies based on good and bad experiences requires focusing on what can be learned from both failure and success, and generating the channels and context to share those lessons with others. This can result in a key input to achieve innovation and continuous improvement in an increasingly complex organizational context.

Daniela Olstein
Manager at Tandem.

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