The Business of Failing Well
What Kind of Failure Was It?
In business, we like to talk about learning from failure.
But that assumes we understand what kind of failure occurred.
A project misses its target. A new hire doesn’t work out. A product launch disappoints. A strategy that looked convincing six months ago proves wrong.
The usual verdict comes quickly: We got it wrong.
Not particularly useful.
In Right Kind of Wrong, Harvard professor Amy Edmondson argues that failures are not all alike. Some are preventable. Some emerge from a complex combination of circumstances. And some are the unavoidable price of trying something new.
That distinction matters.
The Preventable Failure
Poor preparation. Weak execution. Ignored warning signs. Failure to follow a process that already works.
These are correctable failures.
Don’t rationalise them. Identify what went wrong and fix it.
“We executed badly” tells you very little.
“We didn’t test the assumptions behind the forecast” gives you something to change.
The Complex Failure
Markets move. Customers change. Competitors respond. Costs rise. Technology shifts. Several small problems suddenly collide.
No single factor explains the outcome.
The danger is hindsight bias: finding one convenient culprit and pretending the result was obvious all along.
Instead, identify the few factors that mattered most—and what, realistically, could have been known at the time.
The Intelligent Failure
This is the failure businesses should be particularly careful not to punish.
You tested a new market. Tried a different pricing model. Introduced new technology. Challenged an established way of working.
It didn’t work.
That doesn’t necessarily mean the decision was wrong.
If the experiment was thoughtful, the downside controlled and the result produced information you couldn’t otherwise obtain, the failure may have been valuable.
Sometimes failure is the tuition fee for innovation.
Observe, Don’t Judge
This is where Timothy Gallwey’s The Inner Game of Tennis offers a lesson that travels remarkably well from the tennis court to the boardroom.
Gallwey advocated nonjudgmental awareness: observe what happened before deciding what it means.
Not: “The strategy was a disaster.”
But: “Customer acquisition met expectations, but retention was substantially below our assumption.”
One is judgment.
The other is information.
And information gives you something to work with.
This isn’t about lowering standards or avoiding accountability. It is about separating diagnosis from emotion.
Don’t Fail Twice
The first failure is the project, decision or investment that didn’t work.
The second is the story the organisation tells itself afterwards:
We’re no good at innovation.
Management got it wrong.
We tried that once. It doesn’t work.
That second failure can be more expensive than the first.
It can make organisations defensive, discourage experimentation and teach people that the safest career strategy is never to take a meaningful risk.
Instead, run a Failure Audit:
What kind of failure was it?
What actually happened?
What did we learn that we didn’t know before?
What will we do differently next time?
Then close the file and move forward.
The goal isn’t to eliminate failure. A business that never fails may simply not be attempting very much.
The goal is to get better at using it.
References
- Edmondson, Amy C. Right Kind of Wrong: The Science of Failing Well. Atria Books, 2023.
- Gallwey, W. Timothy. The Inner Game of Tennis: The Classic Guide to the Mental Side of Peak Performance. Random House, 1974.