The importance of learning from mistakes in business

by Magenta

18 October, 2017

By Carl Reader, author of The Start Up Coach, co-owner of dennisandturnbull.com and co-founder of taxgo.org

As children, we learn from our experiences, and the strongest way of learning what is safe and what isn’t is often driven more from painful events rather than any warnings our parents give us.

Whilst we’d all like to think that we’ve become much more intelligent and logical over time, as adults we also tend to learn in the same way. Any adult who has had a health scare will know that it speaks far more loudly than the preventative warnings from a doctor; in the same way that we all know that you only truly learn how to drive once you are in the car on your own, and are exposed to the real world of judgement calls, unexpected incidents and your own bad driving. This concept applies to business as much as it does to general day to day life.

There are many examples of businesses learning from their mistakes. In fact, a common word in the startup lexicon is “pivot” – in other words, look at what isn’t working and adjust accordingly. Even the very biggest corporates are now taking a much more open approach to learning nowadays, sourcing feedback from their customers and teams, and creating a collaborative culture to help them succeed.

To be able to do this properly, businesses need to be receptive to this feedback, and it is impossible to learn from your failures and implement the necessary change without embracing failure as part of your company’s culture. It’s not uncommon to find businesses with a fear of failure which has permeated through the ranks; leading to blame and avoidance of failure, rather than identification of failure and positive action being taken. This type of culture (often found in short-term KPI focused businesses) will tend to generate a defensive stance from the team members in any failure “post mortem”, rather than the open and constructive conversation that needs to take place to identify the issues and learn from them.

The reason for failure needs to be understood as there are different levels, with some being more unacceptable whilst others are actually a result of positive actions. For example, deliberate deviance from process (particularly if malicious), or failure as a result of inattention would result in an unacceptable failure; whereas a deliberate experiment to find a better way is almost always a “good” failure”. This isn’t a binary scale however, and failures have to be considered against the intention and reasoning behind them. A simple way of looking at these is to consider whether they are preventable negative failures or intelligent positive failures.

As with any corporate culture, embracing failure has to come from the top, and become part of the fabric of the organisation. The leader has to not only give permission for their teams to fail, but also admit failures of their own, and demonstrate how the learnings from any failure have been used. This is hard for many to do, as it is sometimes a perceived sign of weakness; however team members will soon realise if the culture is simply words in an operations manual rather than actions.

Just a word of warning though – it’s important to differentiate a failure from a mistake, to prevent the business falling into the trap of being underperforming. Failures are absolutely fine, and are part of the learning experience. A mistake is a failure either repeated or ignored.