Factor 5: Tolerance for failure

Factor extremes as measured in survey:

Management has a high tolerance for failure

vs.

Management is not tolerant of failure

Overview to restructuring initiatives

Providing failure has resulted from other than neglect or by way of an ineffective and inefficient effort on the part of those most directly involved, a failure should not be the subject of recriminations. Acting irrationally or chastising managers or employees as a result of the failure of a new initiative can have a devastating effect on those involved as well as impacting the overall culture of the organization. Where failure occurs, it is important to thoroughly analyze the reasons for the failure and to be circumspect regarding criticism or making negative organizational changes that may be perceived as resulting from the failure. Rewarding effort in itself is often neglected!

Three examples of good leadership fostering a culture for innovation

Ian Telfer, Chairman of Goldcorp Inc., was interviewed by Gordon Pitts of the Globe and Mail and reported on July 23rd, 2007. He is asked; so what happens when employees make a mistake? “You try not to let them wreck the place. But if you see them hiring the wrong person, let them. They’ll figure it out. What happens is (that) people learn faster, there more empowered and engaged, and they become better”. Perhaps a further indication of this corporation’s attitude to tolerance, in the broadest sense, is their adoption of a ‘Whistleblower’ policy. The purpose of this policy is also to state clearly and unequivocally that the company prohibits discrimination, harassment and/or retaliation against any employee for bringing to its attention matters of concern regarding a number of matters (see their web site for further information).

50 years earlier another executive said the same thing!

McKnight, one of 3M’s most senior executives during the 20th century, speaking about 3M in 1944, stated that he knew risk was necessary to achieve success. “The best and hardest work is done,” he said, “in the spirit of adventure and challenge . . . Mistakes will be made.” McKnight put his faith in the good judgment of 3M employees. He warned against micromanagement and the chilling effect that accompanies intolerance of failure. “Management that is destructively critical when mistakes are made can kill initiative,” he said. “It’s essential that we have many people with initiative if we are to continue to grow.” McKnight knew that others could rise to leadership. “As our business grows,” McKnight said in 1944, “it becomes increasingly necessary to delegate responsibility and to encourage men and women to exercise their initiative.” [Extracted from the 3M’s publication, ‘A Century of Innovation’].

Deere & Company; Chairman and Chief Executive Officer, Robert W. Lane, from an address he gave on May 7, 2007, addresses how Deere is ‘Driving Growth through Innovation’. Quoting from other sources, he states; ‘You are not really committed to innovation unless you’re willing to see some innovations fail’, “You can stumble only if you’re moving” – so said Roberto Goizueta of Coca Cola.

Remember Your Failures. Remember your corporate mistakes. Great companies don’t just talk about their successes. They tell and retell the stories of past failures to make sure they aren’t repeated. Source; Christian Stadler, Harvard Business Review. Referenced from harvey@harveyschachter.com.

Possible Initiatives to Modify and Improve the Culture for Innovation

Consider focusing efforts on the positives and learning from failure

With the emphasis properly placed on the positive aspects arising from a failure, the failure is positioned as a great learning experience for all of those involved. By encouraging an open discussion of why things went wrong much can be gained and made available to the corporation. Managements who are intolerant of failure will ultimately kill initiative.

Build a culture of experimentation

Organizations need to adjust to economic, social and competitive changes and not settle for simply protecting the turf that is currently generating most of the profit and growth in the organization. Innovative organizations build an experimental culture that often leads organizations down paths that many others might consider weird. These organizations build a huge tolerance for failure. Failure is built into their culture. Failure is expected to happen. If a company experiences no failures over a long time, then it is likely that there is no experimentation taking place leading eventually to a decline in the business and bankruptcy.