Don’t abandon failure. Rethink it.
Managing risk means handling uncertainty. Some investments will be losers. Some decisions will prove wrong. Some projects will fail. How leaders respond to these failures is key. One popular approach in the tech industry is called ‘Failing Fast’: emphasizing rapid iteration and quick abandonment of unworkable ideas. Google takes a contrasting approach. It is called ‘Failing Well’. The idea is to learn and evolve, rather than just move on.
Several years ago, I was teaching in an internal program called the Google Marketing Academy, which took place at the Wharton Business School. I met an engineer who had used the 20% of his time that Google allowed for personal innovation to devise a solution for making online payments.
Google launched this product into the market and, by all metrics, it was a failure. Few users adopted it. Yet rather than kill the project, the Google team was allowed time to study the failure, learn from its mistakes, and iterate a second product launch. This one had middling results. It led to further iterations and, eventually, to what is now Google Pay.
Jeff Bezos said that, at Amazon, he always wanted to go through two-way rather than one-way doors: if a decision was made but failed to work, it was perfectly okay to return through the door rather than stubbornly push ahead.
There is a famous story about Hernán Cortés arriving in the New World and burning his ships to motivate his men. From the Amazon perspective, the conquistador was an idiot. If you landed on an island where your men were starving and the natives were killing everybody, why wouldn’t you want to get back on the ship to go somewhere else?
How do you Fail Well?
1 Admit failures
From the Amazon Fire phone to the Amazon Haven Healthcare venture, to Google Glass and Google+ – stop investing in projects that are failing.
2 Perform after-action reviews and postmortems
Google views failures not as setbacks, but as learning opportunities. Analyze what went wrong and use these insights to improve future projects.
3 Emphasize rapid iteration
Google is known for rapidly iterating its products based on user feedback and data. This strategy often involves launching products in a beta state and then improving them over time. The approach allows Google to test ideas in real-world scenarios and abandon them if they don’t work.
4 Be transparent
When discontinuing services or products, provide clear communication to internal and external stakeholders. This transparency helps build trust.
5 Share failure reports
Document and share the postmortem analysis beyond the team. Understand what happened, why it happened – and how it can be prevented in the future. These analyses should be shared within a company to promote learning.
6 Encourage internal mobility
At Google, employees working on projects that are phased out are often encouraged to move to other roles within the organization. This retains talent and spreads the knowledge and experience gained from failed projects across
the organization.
Leaders need to take a more nuanced approach to failure.
Don’t fail fast, fail well. Treat failure as a learning opportunity – then act
and adapt.
Professor Joe Perfetti is innovation fellow at Duke Corporate Education and lecturer in corporate finance at the University of Maryland, College Park.