Do leaders learn more from success or failure?

A strong organizational culture logically could lead to either success or failure. Image: Shutterstock

Harvard Business School Professor Amy Edmondson’s recent thought-provoking book, Right Kind of Wrong, makes a strong case for the notion that we often learn a lot from failure—and in some cases, perhaps even more than we learn from success. This idea is critical to how we prepare leaders most effectively to enter the real world.

I can add a personal experience to those that Edmondson cites. In 1990, a colleague, HBS Professor John Kotter, and I began a study of the impact of an organization’s culture on its performance. Our hypothesis was that a strong culture would be associated with outstanding long-term performance. We asked hundreds of senior executives to name their competitor (not their own organization) with the strongest culture. We then compared those results with long-term (10-year) performance. The statistical analysis of our data produced what appeared to us to be garbage. There was no relationship. While that in itself might have been a useful finding, it disappointed us. What to do? Throw out more than a year of work and a great deal of data? We were experiencing what felt like failure.

At that point, John suggested that we examine in depth 10 pairs of companies in the same industries, all with strong cultures, in which one company was succeeding and one failing. What we found led us to a useful conclusion: that a strong culture logically could lead to either success or failure. It was, instead, the presence of values and behaviors—components of its culture—that encouraged openness and adaptability that was associated with success as we measured it.

Edmondson’s book, based on a wealth of field experience, is an argument for failure—intelligent failure. She defines intelligent failure as having four key attributes: “… it takes place in new territory; the context presents a credible opportunity (in relation to risk) to advance toward a desired goal; … it is informed by available knowledge; … and finally the failure is as small as it can be to still provide valuable insights.” She adds the bonus that “the failure’s lessons are learned and used to guide next steps.”

Also read: Leadership is simply a series of moments: Kirstin Ferguson

Failures can’t benefit us if they aren’t reported. Edmondson found in her earlier research something counterintuitive—that the best performing teams report the most errors. It led her to conclude that teams in which members know they will not be penalized for errors report more errors, learn more, and are more innovative and productive.

If we were to analyze the case-oriented teaching materials in use at business schools across the world, my own experience tells me to expect a bias toward success. After all, leaders are proud of what their organizations accomplish and have a bias to talk to academics about successes vs. failures. My own cases largely have begun that way, with a common pattern being a two-case series in which success is rescued from the challenge (not necessarily failure) described in the first case.

Edmondson’s work raises questions about our natural bias for emphasizing success vs. failure in the business school classroom.

[This article was provided with permission from Harvard Business School Working Knowledge.]