An Essential Characteristic of Winning Cultures: Allowing for Failure

by Ron Alvesteffer, December 19, 2011

There is a fatal mistake that too many organizations make when they grow. It happens quietly when leaders are unintentional about creating the right culture. The mistake is the formation of bureaucracy and a cultural aversion of risk.

One of the fatal flaws of bureaucracy is the creation of rules that limit talent, including those that discourage talent to experiment for fear of failure. I once heard someone describe the fear of failure as a wet blanket that extinguishes the fire of innovation and I agree.

Great ideas are created by individuals- innovators- and organizations must not only attract innovators, they must keep them. Talent begets innovation, and innovation will only grow in cultures that embrace risk and have a tolerance for failure. If a culture is risk-averse, talent leaves and an organization is left with individuals who simply want to coast in a safe environment.

When I look back on many of the successes we’ve experienced at SEI, I see a clear and intentional process that gave our team license to fail forward.

Sometimes the process meant taking two steps forward and then one step back. But if we were to penalize individuals for having taken that one step back, as all too many bureaucratic organizations do, they would have been less inclined to take the next two steps forward.

Ideas and solutions are very rarely successful in their first iteration. Success is an evolutionary process of failing then refining; failure is an incubator of success.

Thomas Edison said, “I never failed once. It just happened to be a 2000-step process.” Failure is only failure when you don’t allow it to propel you forward.

At the SEI Technology Center, our team who tests complex computer servers rewards “extreme technical bravery” with an actual brick. “The intention is not to reward success or failure, but to encourage individuals to take risks in order to further their understanding of the technology they work with,” that according to Jake Blough, our Manager at the Technology Center. “The award is given to those individuals who take risks and “brick” machines, and is also given to those who miraculously bring the machines back to life. For us, success is having a better understanding of the machines and that can only happen when our teams feel like they have the freedom to test them to the breaking point.”

I encourage risk-takers who have a plan and who can articulate strategy to go after it. The key for leaders is understanding healthy failure from the unhealthy kind. The loss of a customer because an individuals doesn’t return phone calls is failure to be sure, but not the kind that should be embraced.

This person echoes my sentiments on how to manage and run businesses. Kill the bureaucracy so people can grow and add value to the business.