7 Essential questions to extract value from failure

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“Mistakes are a necessary evil. They aren’t evil at all. They are an inevitable consequence of doing something new and should be seen as valuable” according to Pixar’s President Ed Catmull quoted in recent Harvard Business Review article Increase Your Return on Failure.

This presents a challenge when the default position for many leaders in organisations is focused on planning, organising, and controlling resources and risk. This suggests that even when people understand that learning from failure is valuable they do everything within their means to avoid it.

If we accept that mistakes will occur at some point and failure may result, the goal needs to be “rigorously extracting value from failure” so we can improve. Julian Birkinshaw and Martine Haas provide us with three key steps and seven core questions to assess return on failure (which are detailed below).

While it is painful, and most people do not want to look back, the first step is to not be selective and to capture relevant lessons from every failure as they are an opportunity to challenge conventions and beliefs, and take corrective action.

The second step is don’t keep the learning to yourself, share the lessons as there are a number of advantages that accrue; you enhance individual, group, and organisation learning which promotes a constructive culture where excellence and continuous improvement are encouraged – and it may prevent others from repeating the mistake.

Birkinshaw and Haas offer seven core questions to extract value from mistakes and failure:

  1. What have we learned about our customers’ needs and preferences and our current markets? Should we change any of our assumptions?
  2. What insights have we gained into future trends? How should we adjust our forecasts?
  3. What have we discovered about the way we work together? How effective are our organizational processes, structure, and culture?
  4. How did we grow our skills individually and as a team? Did the project increase trust and goodwill? Were any developmental needs highlighted?
  5. What were the direct costs—for materials, labour, and production?
  6. What were the external costs? Did we hurt our reputation in the market or with customers, or weaken our competitive position?
  7. What were the internal costs? Did the project damage team morale or consume too much attention? Was there any organizational fallout?

Challenging as it may be to honestly answer these questions the answers offer insights into how to frame corrective activities and actions.

The benefits of embracing and learning from failure far outweigh ignoring mistakes in the hope they will disappear.

The full article can be obtained using this link https://hbr.org/2016/05/increase-your-return-on-failure

Viventé Australia enables leaders and managers to create the conditions that allow their people to do their best work every day thus creating a powerful advantage: the synergy between people, leadership, management, and culture, produces performance that allows your business to achieve its outcomes.