For all organisations and managers failure is a recurring reality. But despite failure being all pervasive, few individuals or organisations respond positively. Making failure work productively requires managers to recognise that plans need to be adaptable; failure must be built into the culture and everyone attuned to fail fast, adapt and learn.
“We’ve long believed that over time organisations tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant,” noted Larry Page on setting up Alphabet as a collection of companies including Google and a host of others – from Calico to Waymo.1
Alphabet companies are a constantly moving portfolio of impressive, wild and brilliant ideas at varying stages of development. The social networking software company Dodgeball was part of the Google ecosystem. Acquired in 2005, it closed down in 2009. Others have had a stuttering existence. Google Glass was publicly launched in 2014 and then returned to development before re-surfacing as the Google Glass Enterprise Edition in 2017. And others appear set to make an impact: such as DeepMind which was acquired by Google in 2014 and is a leader in AI research.
For all the enormous success and power of Alphabet – 2018 annual revenues of $136.8 billion; profits of $26.3 billion; and 98,000 employees – what is intriguing is its appetite for making what the Google founders have labelled “smaller bets in areas that might seem very speculative or even strange when compared to our current businesses”.
Central to Alphabet’s success is its implicit acceptance that failure is a fact of life. Failure, after all, is a daily occurrence. Bright ideas crash and burn; strategies hit the ground and stay there; and change programmes run into the organisational buffers. Not surprisingly, a full 90 percent of respondents to a 2017 global survey of 500 senior executives from companies with annual revenues of over $1 billion, conducted by the Economist Intelligence Unit, admitted that they failed to reach all of their strategic goals because of flawed implementation.2 From transformation programmes which don’t achieve change to mergers and acquisitions which do not add value, failure is inescapable.
Facts of Life
For entrepreneurs in particular, the perils of failure are writ large and constant. Research by Shikhar Ghosh of Harvard Business School found that 75 percent of venture-based start-ups fail.3 And failure is also a frequent experience in larger organisations. Size and scale do not insulate individuals or organisations from failure. Business history is littered with stories of misjudgement, companies doggedly pursuing the wrong strategies, throwing good money after bad, and simply getting it wrong. Think New Coke. Remember how, at the beginning of the century, Webvan promised to change the way Americans bought groceries. It established a network of warehouses across the country. But then the customers didn’t materialise. It failed slowly and on a grand scale (with losses of over $800 million).
But, despite the fact that failure is a constant presence in life inside and outside organisations, individuals and organisations are ill equipped to deal with it. Faced with failure, people are likely to bury their heads in the organisational sand rather than admitting things are going wrong. Plowing on is an instinctive reaction for many when they are faced with failure. Others abandon ship, heading in the opposite direction at the earliest opportunity.
About the Authors
Ricardo Viana Vargas is a specialist in project management and transformation. Over the past 20 years, he has been responsible for more than 80 major transformation projects globally, with an investment portfolio of over $20 billion. He is the executive director of the Brightline, a PMI Initiative together with leading global organisations dedicated to bridge the gap between ideas and results.
Edivandro Carlos Conforto, PhD is a research award winner and thought leader on organisational agility and agile innovation. His work help leaders transform their organisations to succeed in today’s ever-changing business environment. He is the head of strategy research at Brightline Initiative, responsible for the benefit pillar of thought and practice leadership through academic and professional research.
Tahirou Assane Oumarou, MASc, P.Eng, PMP has over 15 years of experience in leadership roles, civil engineering, and project management. As director of operations of the Brightline Initiative, Tahirou oversees the activities under the three benefit pillars of thought and practice leadership, networking, and capability building. From 2013 to 2017, Tahirou worked as the deputy director of infrastructure and project management group in the United Nations Office for Project Services.
2. Economist Intelligence Unit, “Closing the gap: Designing and delivering a strategy that works”, 2017; https://www.brightline.org/resources/eiu-report/
3. Carmen Nobel, ‘Why companies fail – and how their founders can bounce back’, Harvard Working Knowledge, 7 March 2011
4. The Agile Practice Guide. Project Management Institute and Agile Alliance, Global Standard, 2017.
5. Economist Intelligence Unit, “Closing the gap: Designing and delivering a strategy that works”, 2017; https://www.brightline.org/resources/eiu-report/
6. Brightline Initiative and Forbes Insights Case Study. “An agile blueprint for effective strategy execution at ING Group.” Published on December 04, 2018. Available at: https://www.brightline.org/resources/an-agile-blueprint-for-effective-strategy-execution-at-ing-group/
7. Andrew Wallenstein, “Reed Hastings doesn’t want ‘The Get Down’ cancellation to discourage Netflix”, Variety, 31 May 2017, https://variety.com/2017/digital/news/reed – hastings – doesnt – want – the – get – down – cancellation – to – discourage – netflix – 1202448798/
8. Bill Taylor, ‘How Coca-Cola, Netflix, and Amazon learn from failure’, Harvard Business Review, 10 November 2017
9. Derek Roos, “Six ways to foster digital innovation”, Real Business, 28 October 2015; https://realbusiness.co.uk/six – ways – to – foster – faster – digital – innovation/
10. Brightline Initiative and Forges Insights Case Study. “NASA’s Down-to-Earth principles deliver positive strategic outcomes.” Published online on June 08, 2018. Available at: https://www.brightline.org/resources/nasa-down-to-earth-principles-deliver-positive-strategic-outcomes/
11. Brightline Initiative and Forbes Insights Case Study. “How a focus on culture, talent, metrics and technology drives the American Red Cross’s Strategy.” Published on line on May 11, 2018. Available at: https://www.brightline.org/resources/how-a-focus-on-culture-talent-metrics-and-technology-drives-the-american-red-crosss-strategy/
12. Julian Birkinshaw and Martine Haas, “Increase your return on failure”, Harvard Business Review, May 2016