How Can Companies Learn From Failure?


Failure in technology is very different than failure in business. If you are trying to develop a new product, something that hasn't been done before, failure means you just keep trying. You have simply found another way that it doesn't work. No one gets upset because you aren't expected to know how to build something that hasn't been built before. Second chances are fine.

In business though, failure is different. It seems to stick with you. The new product didn't sell? Oh, it must have been your marketing campaign. People don't cut you any slack, at least, not at most companies.
In business, like in technology, it is important to learn from failure. It is important to analyze what went wrong so that you don't make the same mistakes again. But I'm not sure how to go about it. How do you analyze failure with a project group in a way that doesn't end up pointing fingers and alienating certain members? I don't have an answer. I am honestly asking all of you to share any experience you have with this.

It is difficult for me to imagine a group of people sitting around a table discussing a failed project, and reaching conclusions that don't have negative impacts on certain members. Do you have to hope that your group members just take criticism well? If not, what are the ingredients for a successful analysis of a business failure when the participants in the discussion are the members of the team that failed?

  • Since the dot com crash it seems like tech businesses are somewhat more like real business, with real consequences for failure. I’m not sure this trend is good for tech, or any business which depends on R&D because it inhibits innovation.

  • I think one of the best methods to build from failure is to create an environment and culture that embraces it. I know that sounds a bit fluffy, but what I take it to mean is that the organization, group, team, etc. completely buys into the “learn from failure” ideal. I would argue that part of completely buying into it is taking on personal accountability. What’s wrong with someone being the focal point of failure if they were in fact a root cause? The obvious answer is that it creates discomfort and possibly churn, but if managed correctly (leading back to the overall culture), you can have accountability with constructive conflict. People will certainly feel singled out, but if the right culture is present, they will also feel supported and subsequently grow from the experience.

    I’ve experienced this in short bursts, but never over a long period of time. That said, I am confident that if the right culture and commitment are created, it is definitely possible to have continual growth and positive experiences from failure.

  • Bill Moran

    Sometimes people will be alienated. It’s a fact in life. People will make mistakes that’s what happens when they do things that they (or sometimes any one else) have ever done before. And sometimes there’s failure.

    If you’re having a mature discussion with a team about failure fingers can be pointed. That’s reasonable, but I think it needs to be framed correctly. What was the true cause? It’s normally deeper than someone just failed. They failed because they didn’t have information or training or because neither of those things were available. Maybe their hands were tied by policies. Maybe their perspective of the world kept them from seeing the problem in the proper light. The only things I can see where someone would be alienated and it can’t be explained away as an exercise in training is laziness or poor interactions with their peers. (of course it’s 3am, I’ll think of more in the morning) And if that’s the case, then in could be terminal, and I doubt you’d want that person on the next team anyways.

    -Take care.

  • Ann

    MY first question would be:
    What was the nature of the failure…
    Just as Bill Moran pointed out in his previous post.
    Along with his thoughts I would like to point out the need to align your team with a set of ethics ones that are aligned to Company policy. Let’s face it short cuts can cost you your business…