In order to win, management first needs to accept failure
Over the weekend I watched the Ford v Ferrari, a movie about the events surrounding the Ford Motor Company’s battle to defeat Ferrari at Le Mans. The movie is a triumph of the spirit to compete at the most arduous auto race in the world.
The movie is also a battle of cultures. Much of the film pits the racing team led by Carroll Shelby and the machinations of corporate management. It’s the struggle between the free spirits versus the suffocating bureaucracy and politics of the company men.
To launch a race car to compete at Le Mans, much less win, required turning around what had become a stodgy and slow moving auto company. GM was taking away market share. Ford had taken a huge hit to their reputation with the failure of the Edsel. In a 60’s generation that sought after flashy and exotic, Ford was safe and dated.
In fairness to Ford, the movie makes a few dramatic embellishments. The resources of Ford’s people, manufacturing expertise, and deep pockets allowed Carroll Shelby to field a team that could win at Le Mans. It was a $25 million gamble, and by most accounts, the collaboration between Ford and Shelby-American was a success.
What was accurate however was that failure was not something to be tolerated. In a pitch by a younger Lee Iacocca (later CEO of Chrysler) to convince Henry Ford II to take a fresh direction to appeal to youth, you could hear the naysayers start to shoot down the idea. Several weeks before Le Mans, Henry Ford II wrote “You better win” on a business card and handed it to Leo Beebe, who was the Ford executive leading the racing division.
The win or else attitude is not uncommon in the corporate world. There is a boldness and competitive spirit that can unite and energize a team and company. At the same time however, it can create communication barriers in teams that stifles opposing ideas and hinders innovation.
Google famously looked into the question of what makes for effective teams. Dubbed Project Aristotle, the study showed what many would consider a counter-intuitive result:
The researchers found that what really mattered was less about who is on the team, and more about how the team worked together.
The most effective teams were not necessarily populated with superstars. The best functioning teams were ones where team members could depend on each other and work with a sense of clarity and purpose. And while several criteria were evaluated and measured, the most critical one for team effectiveness was psychological safety.
A team with high psychological safety means that teammates feel safe to take risks around fellow team members. In other words, there is space for crazy ideas, outside thinking, risky tactics, making mistakes, and having healthy disagreements in an atmosphere without politics, repercussions, or blame.
The safety from blame in the face of mistakes however runs directly into the management conundrum. Managers are incentivized for results and outcomes, not failures. Work and objectives are set based on what is knowable at the time, while anything that falls outside the familiar is deemed too risky and potentially career threatening if not successful. Managers get promoted for winning, not for trying out new things and learning in the process.
Perhaps some of the resistance is the word “failure”. It might be better to recast it as “learning” or “experimenting”. When I spoke in front of a group of operations executives at a French bank, the first question after my talk was why I kept using the word failure. Startups understand why failure is necessary, but enterprises are still very resistant to the notion.
There is an important nuance to the word failure. Most people view failure as binary in that you either succeed or fail, win or lose. However, failure is a continuum of outcomes that range from positive and value generating to destructive and potentially fatal.
The good failures are where learning and innovation happens. When an unexpected outcome arises, that eliminates poor decision paths and allows for course correction. When working on novel ideas, the process of elimination is essential to achieving positive outcomes. We reduce the scope of exploration in order to find the most likely success paths.
Unfortunately, we tend to fixate on the bad failures. Whether the hack that breaches unplugged security holes, the code update that causes a production crash, or mounting delays in getting a new system out the door, we put all failure into the same bucket. When you peel back the root cause of these failures however, the major problem could have been easily avoided if the blame culture did not stifle discovery of smaller, more manageable problems.
The catastrophe at Chernobyl was a case study in blame culture. Though the engineers could sense a problem was mounting despite their inexperience, the manager overseeing the test not only refused to acknowledge the warning signs, but even mocked his own staff as incompetent. He could not fathom admitting that he did not fully understand the situation about to unfold.
When we frame failure as learning, it appeals to people not ready to embrace the idea of failing or being vulnerable. Considering that most executives of enterprises achieved professional success in the traditional setting of command and control, top-down hierarchies, fostering a “learning culture” is easier for executives to support than promoting a “failure culture”.
Moving to a learning culture causes the organization to change in four fundamental ways:
- Growth Mindset — failure is more readily accepted as a natural consequence of learning, thus growth and journey towards understanding is valued alongside outright success
- Strategic Mindset — learning creates the space to think more expansively and plan long-term rather than remaining in execution mode in order to appear busy
- Risk Mindset — acceptance of failure as a valid and acceptable outcome means teams have the agency to make bolder bets and pursue more uncertain paths
- Ownership Mindset — with greater openness and acceptance of vulnerability, team members feel safe to accept full accountability for successes and failures.
Fostering a learning culture therefore becomes a powerful mechanism towards changing the organizational belief systems and nudging team members and teams to be open to failure. Especially in the context of digital transformation, without the foundation of a learning culture, there is little chance of true transformation taking hold
This is why addressing the ways an organization communicates and collaborates internally is so critical. Without the open and fluid communications between teams, the acceptance of failure is contained to disparate silos, trusted and relevant information is horded, and the machinations of the bureaucracy easily overcome any efforts for organization wide change.
It is the responsibility of leadership to take ownership of the culture shift and it starts by listening to the engineers. Whether Anatoly Dyatlov, who supervised the fatal Chernobyl test, or Leo Beebe, who was leading a freewheeling auto racing team, trusting the folks on the front lines that have the first-hand knowledge is critical for building psychological safety. This is where the room fail and the opportunity to innovate happens.
Does a learning culture exist in your organization? What are some ways that your leadership allows for teams to fail, iterate, and learn without blame?
This American Life — Burn It Down
Not the Heretechs podcast, but one of my favorite podcasts by NPR and this one is an especially interesting case study in extreme organizational culture change, definitely a must listen!
By the way, new Heretechs podcast episodes are on the way. In the meantime, check out past episodes by finding them on Apple Podcasts, Google Podcast, or wherever you listen to your favorite podcasts and please give us a like and subscribe
We help IT leaders in enterprises solve the cultural challenges involved in digital transformation and move towards a community based culture that delivers innovation and customer value faster. Learn more about our work here.