What does ‘embracing failure’ actually mean? Here’s a pragmatic perspective on reframing risk in organisations

For all the talk of ‘embracing failure’ it rarely something that is practically implemented. It is not just a flimsy saying but a very pragmatic thing for everybody and particularly business leaders to embrace. Here’s a little practical guide that I hope helps. I’d love to put some maths behind it if anybody wants to help…

Not taking risks is expensive

Opportunity cost is nothing new as a concept but it is still overlooked. It seems to be some sort of cognitive fallacy to not ask ourselves the question ‘but what if I don’t try and actually it would have worked’. In the words of Zinedine Zidane: ‘you don’t score if you don’t shoot’.

• Probability of failure: unknown (you didn’t try)
• Probability of success: 0%
• Probability of learning anything: 0%

Accidental errors are expensive, intentional errors can be profitable

Another known approach to learning is ‘controlled testing’. Organisations like Google and Amazon are known for having 1,000s of small tests going at the same time. When we make big mistakes by accident we have no control over the impact of those mistakes. If however we have a hunch that something could turn out awesome or awful, then it’s worth doing a tiny test to see if that’s the case. Then we can either put strategies in place to avoid the worse or to achieve the best.

Research is expensive, testing is cheap and often profitable

Big corporate organisations often commission big pieces of research such as ‘feasibility studies’ to see the ‘viability’ of a product or service. It can often take a lot of time and money to do that and even then, the results are often hypothetical and therefore inconclusive. Testing assumptions quickly with several low-fi (or low fidelity) prototypes is more accurate, faster, cheaper and has more potential for reward than research.

If the goal is infinite, there is no real risk

Risk is mainly a psychological construct though. An easy thing to say a difficult thing to really accept. It depends of course of what we are risking and therefore it depends on the game we are playing. If we play a finite game that is to say where there are winners and losers, comparisons, deadlines, benchmarks, there is a lot to lose and risk becomes a psychological monster. If we play an infinite game and try to build organisations for longer term purposeful impact, there is little risk in the present because there is no end point. It’s the game that you just keep on playing not to win but simply to play. The infinite game has little to no risk but so much potential reward.

What to do about this?

• Create intentional tests which have guaranteed failure and therefore guaranteed learning and therefore guaranteed increase in value.
• Research through practical action rather than through theory
• Work with your inner monologue to come to terms with what this ‘risk’ is really about. It is probably a symptom to something deeper.

I’d love to talk more. Either leave a comment below or get in touch (jon@flux.am) to find out how flux can help liberate your organisation for human & commercial growth. Take care. Jon