Individuals are rarely given the luxury to embrace failure as part of the learning process. Rather, experience teaches most of us that failure is often painful and should be avoided wherever possible, especially when its potential costs are substantial. So, is it any wonder that fear of failure contributes to sluggish corporate decision making? There's got to be a better balance, right?
Curious to learn more? Read on, dear friends....
Don't Embrace Failure...But Do Make a Decision!
The movie Zero Dark Thirty dramatizes the efforts of a CIA agent and her team to find Osama bin Laden. The emotionally charged conflict in the film centers around her impassioned conviction that bin Laden is at a particular location within Pakistan, despite the absence of airtight intelligence. She maintains that there is a sufficiently strong basis for Navy Seals to raid his compound. I think it is fair to assume that if bin Laden had been located elsewhere and the raid turned out to be a bust, there would have been enormous negative fallout with numerous careers ruined or crippled. Beyond its dramatic entertainment value, Zero Dark Thirty offers some very keen lessons about decision making and risk taking behaviors in hierarchical organizations.
In business (and in life in general) we rarely have all of the information that we need in order to make riskless decisions. However, in order to function effectively, it is important that we seek reasonably sufficient information upon which to base our decisions...and then move forward. In these instances, we should accept that failure may be an option, accept it if it occurs, and then quickly adapt to it.
Many companies are relatively risk intolerant. Whether or not they actively "punish" failure, there is most likely an awareness and sensitivity to potential substantial downside career risk associated with it, especially when the stakes are high...and particularly in a difficult economic environment. In general, failures are most easily tolerated when the costs associated with their occurrences are relatively low and there is high incremental benefit associated with reducing knowledge uncertainty. The higher the stakes, the greater the consequences of failure.
Individual failure risk tolerance informed in part by corporate risk tolerance determines decision making behavior. In my opinion, apprehensive corporate managers tend to drag their feet in making decisions. In some instances, it's not their decision alone to make. In others, they can be apprehensive about making the call themselves. While I understand this and honestly don't blame them, it can be very frustrating for those who depend upon them for decisions required to move initiatives forward.
In principle most of us support the idea of embracing failure as an expression of management trust and personal development. However, unless managers are given explicit permission by their superiors to fail (and the conditions under which failure as a possible outcome is acceptable) conservative decision making will continue to be the norm.
Are there companies you have firsthand experience with that promote intelligent risk taking? I'd welcome your thoughts.