Whether in finance, healthcare or space exploration, organizations make mistakes. But relatively few develop the philosophy, culture and analytics necessary to consistently learn from these mistakes and use each failure to become smarter.
When you’re trying to improve hospital processes to prevent patient deaths, for example, this culture is extremely important. It’s hard for healthcare practitioners to share information about failures because people have to admit to the problem in order to learn from failure.
“Failure and fault are virtually inseparable in most households, organizations, and cultures,” Amy C. Edmondson writes in the Harvard Business Review. “Every child learns at some point that admitting failure means taking the blame. That is why so few organizations have shifted to a culture of psychological safety in which the rewards of learning from failure can be fully realized.”
Perhaps you’ve experienced a similar dynamic in your own organization when attempting to learn from past failures with technology implementations. Many companies hold a post-mortem of some sort for these failed projects, but ultimately file the information away in a report that no one ever looks at again.
Here are three points to help you learn from past mistakes and build a great future for your organization:
1) Recognize that all failures are not bad: In her Harvard Business Review article, Edmondson distinguishes between praiseworthy and blameworthy failures. When someone takes a risk that didn’t work out but was educational, that’s a praiseworthy failure.
“When I ask executives … to estimate how many of the failures in their organizations are truly blameworthy, their answers are usually in single digits — perhaps 2% to 5%,” Edmondson writes. “But when I ask how many are treated as blameworthy, they say (after a pause or a laugh) 70% to 90%. The unfortunate consequence is that many failures go unreported and their lessons are lost.”
2) Be objective in assessing failure — not emotional: When the recession hit, Ford was the only Big Three automaker not to ask the government for a bailout, due in large part to then-CEO Alan Mulally, according to a 2009 BusinessWeek profile.
Mulally was tapped as Ford CEO in 2006, and his ability to shake up the company’s culture “has thus far kept Ford independent and away from the U.S. Treasury’s loan window,” according to the BusinessWeek profile. “Under Mulally, decision-making is more transparent, once-fractious divisions are working together, and cars of better quality are moving faster from design studio to showroom.”
When Mulally arrived, for example, managers commonly held pre-meetings in which they would figure out how to get their story straight before presenting to the higher-ups. This is an attempt to avoid blame for failures, and doesn’t contribute to useful problem solving.
Instead of these cover-up meetings, Mulally instituted a weekly business plan review and focused on using analytics to take the emotion out of failure and improve decision-making. Creating this environment allowed Ford to deal with failure more effectively and take the right action based on the information.
3) Examine the business cases of failed technology implementations: To learn from past failures and make good decisions about future technology investments, you need to look at what has produced the best and worst results in the past. Did a failed project ultimately result in some sort of impact? Was the implementation best for the company or best for the implementer’s resume?
In today’s competitive environment, learning from past mistakes is imperative. Ultimately, it boils down to people: how they deal with failure and how they create an effective environment for learning from failure. Until executives lead efforts to create an environment where analytics and information from failures is used to drive productive actions, it’s going to be difficult to learn from past mistakes.