Everyone hates to fail but innovation and progress cannot happen without risk-taking and conflict. And with risk comes failure. In fact, I would guess that risk takers fail more than they succeed. As Samuel Smiles said in 1859,
“We learn wisdom from failure much more than from success. We often discover what will do, by finding out what will not do; and probably he who never made a mistake never made a discovery.”
The Consequences of Risk Intolerance
There is ample evidence that organizations stagnate if they expect every employee to perform flawlessly and business failures aren’t tolerated. When employees do not have the freedom to experiment and explore options the company cannot keep pace with competitors.
In our fast paced world, new innovations only come from trial and error (notice that it isn’t called trial and success). As conditions change, new adaptive strategies must be developed and that cannot happen without taking risks and experiencing business failures. Deterministic business models that are tightly constrained will not be able to compete.
Mistakes Improve Performance
Last week, the TED Radio Hour on NPR included a series of talks about how necessary mistakes are for improvement and growth.
I was particularly impressed by a presentation by Margaret Heffernan about the values of conflict and the related willingness to consider options. Heffernan is a former CEO who now explores organizational behaviors that undermine the productivity of a group. She writes books and articles and makes presentations about employee motivation, creativity, decision making, time management etc.
Limits to Conflict
There are two conditions that limit conflict in a company—autocratic leadership and a homogenous workplace. Selecting a labor force with people who are too similar to one another and giving them no freedom to participate in developing and executing strategic objectives will eliminate innovation and the commitment of employees. Disempowered workers will also be disengaged and less committed to success.
Authoritarian Leadership Eliminates Creativity
When every decision is controlled from the top and leaders hold all the authority, employees who are closest to the outcomes will be unable to contribute and improve planning. Leaders have an overview of the company but do not necessarily understand the nuances of operational objectives. Trying to eliminate business failures can result in business failure.
The Hazards of Harmony
Heffernan’s TED Talk resonated with me because so many corporate leaders do not understand that a harmonious workplace is not necessarily a productive workplace. When all the employees are selected to fit the prevailing culture, employees will feel very comfortable but without conflict there will not be the expanded exploration of alternatives that enriches decisions.
When people are entirely comfortable as they are when they are surrounded by people that mirror their viewpoints, they become complacent. As I have described before, diversity leads to more perspectives and, ultimately, better decisions, but it IS inefficient because more choices will lengthen the process and take more time. Companies that only select employees who resemble their present staff will be pleasant but not productive.
Conflict is desirable and necessary, but it shouldn’t be acrimonious. Conflict in this sense means disagreement but not violence. Discord does lead to some tension but the rules of civil discourse should apply. Every stakeholder needs to feel safe enough to participate and committed to the outcome of the discussion. When a team has been selected to bring different points of view there is a much higher probability that the best solution will result with enough exchange. But sometimes, despite everyone’s best efforts, the outcome will not be what the stakeholders desired and there will be business failures. In those cases the company should change direction and learn from the error.
Business Failure is Beneficial
There are innumerable examples of people who failed before they ever succeeded. Their failures laid the groundwork for them to be successful later. Analyzing why an initiative failed and learning from what didn’t work, they were later able to avoid similar, perhaps bigger, mistakes in the future.
Just as I expected my children to do their best in the face of a challenge, business leaders must provide the conditions for employees to question, take responsibility, and share information. Both selection of the workforce and the business model will affect the company’s ability to be adapt proactively to challenges.
A system that is autocratic will preclude the labor force from exercising judgment and being creative. To make the greatest contribution, employees must be selected to bring many perspectives and then be empowered to contribute their insights to the company. With a diverse workforce that participates strategically, the organization will be nimble and creative, but there will also be conflict and mistakes. There cannot be progress without failure.