Teaching MBAs to learn from failure

Business Schools can break down taboos around failure and help MBAs cope with and learn from it within a psychologically safe environment. Kevin Lee-Simion talks to three Business School leaders about how they address ‘failure’ as a key topic within MBA programme design

We strive for success, but could it be argued that we must experience failure in order to achieve it? Dr Ivo Matser discusses the topic of failure within Business Schools and for MBA students.

Is failure a necessity?

Yes, but not because people want to fail or people should fail. Failure is not a goal, failure is inevitable. Of utmost importance is the acceptance of failure as a probable outcome of an experiment, innovation or attempt of improvement. Without experimenting, innovation becomes improbable. Accepting failure and not being frightened to fail are of equal importance.

The problem is that we do not share failures and mostly hear about success stories. But ‘behind’ successes are failures. Many success stories are written in hindsight and are not the actual stories. These success stories imply that people understand the market and that decision makers are invariably able to develop reliable forecasts which is impossible in reality. 

Failure does not form the curriculum in higher education

Many people believe in forecasts but they fail to recognise them as projections of a desired future. Not meeting these projections is failing and this is perceived as stupid. Schools want to teach smart things and not stupidity. Moreover, the education system is based on the punishment of failures. 

As children, we are encouraged to experiment. Yet as soon as we go to school we are graded and punished for failures. This does not mean that we should not assess people. Assessment could be more geared towards learning processes and on what people can do. Additionally, it should motivate people to take responsibility for applying their talents properly. Feeling responsible for developing your talents means continuous improvement and not being afraid of challenges. 

Business Schools must create an environment in which MBAs can thrive through failure

There are many ways to integrate failures into programmes. Feeling safe with your peers is a condition to share and use failures. 

It is imperative that MBA students bring their own failures into the classroom and that we can invite successful people to share their dark sides of success. Practising behaviour is important. We can teach how to lead a meeting but it is better to organise simulations where students can practice and learn from their failures and mistakes.

Teaching about failure

You cannot teach how to behave as we need experiential learning – learning by doing and receiving feedback. Failures are important in MBA programmes, however, most programmes do not teach it, but let students experience failures. Feedback is an important learning intervention in behaviour, often more powerful than teaching. I personally train people in giving and receiving feedback.

How to handle failure

An MBA student can handle failure if the MBA is able to create a learning context. If you work in an environment where ‘management by fear’ is the business culture, it is quite naïve to start your own kind of safe environment to share and support experimenting. What I do not see in many MBA programmes is the topic ‘how to manage upwards/boards/shareholders’. Most MBA programmes only focus on managing downwards and horizontally. It is important to learn how to manage superiors or systems to create a learning environment with a supportive feedback system.

Strategies to learn from failure

This is experiential learning but with a twist as it’s based on talents and the potential of people. Successes and failures in your personal development journey work, because this is based on your talents.

Strategies that emphasise failure

If people are not allowed to fail, this does not prevent them from failing. They will simply become very smart at hiding failures or just do the minimum demanded to reduce the probability of failure. 

This means that you are likely to spot failures late in the day, also leading to low productivity and slow decision-making processes. By contrast, openness, transparency, feedback and cultivating a ‘safe environment’ help avoid significant losses, because we notice failures earlier. This results in greater innovation, higher productivity and less sick leave. 

Dr Ivo Matser is President of GISMA Business School

Marco Tortoriello discusses success and failure in business, and the role Business Schools have to play in breaking the failure taboo.

Why is failure a subject that is not really touched upon in higher education?

This has to do with the general image that business leaders like to have of themselves; no one likes to see themselves as a failure. We tend to look at other people’s failings and say things such as ‘of course they failed, they didn’t take this into consideration’. The vast majority of business ideas fail. These ideas don’t necessarily fail because they are bad ideas but because people have a poor understanding of what it takes to implement the ideas.

Business Schools should do more to teach students about failure

Business Schools should collectively teach students more about failure. There should be conversations about failure and it should not be viewed as a taboo topic.

Business Schools need to teach students to acknowledge failure and help them consider failure as part of the learning process.

Case discussions about failure are the most natural way of recreating a scenario in which a decision was made that led to failure. Through these discussions, students can talk about things such as whether there was consistency in the decision made even though it ended up in failure. In my MBA classes, I always incorporate cases studies about failure and keep a balance between the ‘winning’ business moves and the business moves that didn’t go so well. I tell my students that the people who made these ‘bad’ decisions were judged as ‘stupid’. However, in these case studies, the people who failed were the best and brightest in that industry.

When we recognise failure, we should be humble. Dismissing a failure as an ‘obvious’ mistake does not help students to understand the situation that led to the wrong set of decisions. If a mistake were ‘obvious’, they wouldn’t have made that mistake.

We can avoid mistakes by learning from the experiences of others. From that perspective, case studies are useful for examining the failure and success of business moves.

Business leaders can be afraid to fail, and afraid to innovate. Business Schools have an opportunity to change this mindset 

Business Schools need to talk openly about failure and help students consider it as ‘part of the picture’. Failure is a discrete event. But to get to this discrete outcome, there is a sequence of decisions. Business Schools should help students dissect the process to analyse what went wrong in the sequence of decisions that eventually resulted in failure. A critical appraisal will enable students to learn from instances of failure.

People get emotionally involved in projects. When one fails, they don’t want to talk about why it didn’t work. But the point is to think about the next move. This move can be just as important and as relevant for you in your personal growth and career as the previous one that failed.

The best strategies an MBA can use to learn from failure

MBAs can put themselves in the shoes of decision makers. However, this is very hard because we have the benefit of hindsight. So MBAs need to be able to ‘reset the clock’ and only use the information that was available at the time.

MBAs could think of failure as a cadaver, with themselves as the medical examiner. Physicians conduct autopsies to understand what happened when someone has died. They are not emotional and are objective. MBAs need to do the same when regarding failure.

Marco Tortoriello is Professor of Strategy and Organisations at Università Bocconi and Associate Dean Master Division at SDA Bocconi.

Failure is part of life but it isn’t addressed sufficiently. Deniz Ucbasaran talks about failure, its concepts and the teaching methods surrounding it.

Most things we teach are geared towards success. We want to attract the best students; those who have succeeded. We carefully pour through their CVs to identify their academic achievements, we scrutinise their prior work experience to see what they have accomplished.

When they arrive, we teach them about success using examples of successful companies and leaders.

This is understandable. After all, nobody wants to pay for an MBA to learn about failures, right? There are a whole host of reasons why such an attitude can be problematic. 

Blameworthy failures

If we’re not careful, we may be committing a scientific sin – ‘sampling on the dependent variable’. If we only look at the practices of successful companies or individuals and conclude that it is their practices that led to success, our conclusions can be misleading. It’s only when we analyse the practices of those that failed as well as those that succeeded, that we can attribute a particular practice to success with greater accuracy. 

Failure and setbacks are part of life. While failing is not a new phenomenon, our ability to predict accurately what will happen next is diminishing as we operate in an increasingly turbulent and uncertain world. With this uncertainty, comes surprises, setbacks and failures. We therefore need to acknowledge these, understand them and learn how to deal with them in such a way that our failures might fuel future successes.

All failures are not created equal. Amy Edmondson, Professor of Leadership at Harvard Business School, suggests that failures fall within a spectrum. On the one extreme are blameworthy failures such as those that result from people deviating from rules or making insufficient effort. Some failures may result from lack of knowledge or experience or due to overload. In the latter cases of failure, the blame may lie with superiors for misjudging competence and stress levels.  

At the other extreme are ‘intelligent’ failures which are the result of carefully crafted experiments designed to generate learning about what works and what doesn’t. These intelligent failures are low in cost but high in learning. 

For example, you may have an idea for a novel product. Rather than going full steam ahead you might develop a low-cost prototype and start by getting potential customers to use it and provide feedback. You recognise that they don’t want the product you had in mind but learn that they would love it if it were available in a particular style or if it had a particular function. Although finding out that potential customers don’t want your product in its current form might seem like a failure, you haven’t invested a huge amount to find out some information that now provides you with new options. These kinds of failures are part of the various processes that we teach our students. But while they make intuitive sense, these ideas are often harder to put into practice.

Minimising the cost of failure

Many failures are not carefully planned and designed. They can come as a shock and are often hard to cope with. Therefore, although a failure represents a jolt that encourages us to reflect, learning from failure is not automatic. For starters, minimising the costs of failure can be hard. If left unchecked, many of us are prone to the bias known as ‘escalation of commitment’ where we might invest more and more in the hope of turning things round when they look like they may be failing. Also, failure can be an emotional experience associated with feelings of guilt, shame, anger, fear, blame and these feelings may be heightened in certain contexts and cultures. After all, not everybody lives in the entrepreneur-friendly, failure-tolerant Silicon Valley. The emotions associated with failure might lead to defensive strategies such as blaming others or attributing the failure to external factors beyond one’s control. Such emotional responses may limit the lessons learned from the failure. 

It was partly for this reason that one entrepreneurship professor took issue with the way learning from failure was being presented – suggesting that the process was more complex than it appeared. Drawing on his own experience of dealing with his father who had to close the family business, Dean Shepherd, Professor of Entrepreneurship at Notre Dame University, explained how the failure of an entrepreneur’s business could be likened to the loss of a loved one, generating a response similar to grief. Such feelings might lead to numerous coping strategies, not all conducive to learning from failure.

An appropriate emotional response

Even with less significant failures, emotions are still likely to be involved. So, what can we do to make sure there is an appropriate emotional response? And how can we prepare the next generation of managers and leaders for dealing with failures?

One important first step is to ‘normalise’ discussions around failure. Through discussions about failure we can create safe environments in which failure can be discussed. 

Any discussion of failure should seek to enhance understanding of how people think and feel about failure. By inducing uncertainty and failures in a relatively safe environment we can help our students get to know what it feels like to fail and understand their default responses. Our default responses to failure are often underpinned by our mindset. 

According to Carol Dweck, author of the bestseller Mindset: How You Can Fulfil Your Potential, for those with a fixed mindset, a failure or setback is self-defining: ‘If I fail at something, that makes me a failure.’ Accordingly, situations where failure might occur are frequently avoided by those with a fixed mindset. In contrast, for those with a growth mindset, even though the failure is still a painful experience, it is something to be faced, dealt with, and learned from.  

Pedagogic approaches that simulate uncertainty and failure may help students understand their default responses and when coupled with having these responses questioned, may allow them to develop new neural pathways for dealing with failure. Role plays may be a powerful method for helping students understand failure better. How, for example, might you persuade a colleague to join a high-risk project? 

Along similar lines, Professor Shepherd suggests students might be asked to role play being a boss having to give a speech, announcing the closure of the business to employees or having to provide advice to an entrepreneur who appears to be coping badly with a failed business. Professor Shepherd suggests that those who have failed should oscillate between a restoration-orientation, whereby they move on and focus on new or different activities, and loss-orientation, whereby they focus on what they have lost and try to make sense of this loss. 

Too much of the latter can lead to rumination and negative emotions, which might get in the way of the individual moving on and functioning normally but too much of the former may mean there is minimal reflection on the failure and therefore limited understanding of what happened. To make the most of a failure, individuals will need to reflect on the failure but also bounce back and apply the learning in the form of changed behaviour.

If failures are inevitable in uncertain environments, we may also contemplate the idea of resilience training – a concept successfully introduced in both the military and in schools by the godfather of positive psychology, Martin Seligman. Part of the training involves building psychological fitness, which involves challenging the default responses to failures referred to above. This process starts by helping individuals understand that their response to an adverse event is the result of their beliefs, not the event itself, and then teaching them ways to dispel unproductive beliefs about the failure quickly and effectively. 

We’ve all been to one workshop or another, coming away feeling enthused and excited to change our practices and before we know it, we’re back in the usual patterns of work and all is forgotten. So how do we develop the right habits when it comes to making the most of our failures? It requires the kind of practice in which experts engage. Anders Ericsson  – ‘the expert on experts’ – calls this purposeful practice in his book Peak

Unlike regular practice, purposeful practice has a number of features including being focused on well-defined, specific goals; involving feedback, and involving getting out of your comfort zone. Applied to the context of maximising the learning from failure, purposeful practice might involve investing resources into a highly uncertain project. It might also involve being specific about what we want to learn from the project. And finally, it might involve regularly eliciting feedback both during and after the project. 

The knock-on effect

This feedback might include technical data as well as other data from project team members, users and other stakeholders. Provided regularly, this can limit the escalation of commitment but also yield new, surprising information. Should failure occur, one useful method for fostering and capturing the effects of purposeful practice might be the creation of a failure report. 

A failure report captures reflections on the failure and in so doing clearly identifies the lessons learned from these. Knowing that you will have to create a failure report at the end of any project is likely to foster the discipline of purposeful practice. The benefits of creating such reports are likely to be the opening of dialogue around failure and help normalise acceptable failures. The knock-on effect is encouraging innovation and appropriate risk taking. 

Risk taking and innovation run counter to many individuals’ natural inclination to avoid failure. Future leaders therefore play a key role in creating what Professor Edmondson refers to as a ‘psychologically safe’ environment. To create such an environment, leaders will need to help their followers understand the hallmarks of intelligent failures and how to design projects such that learning can be maximised if failure occurs. 

A culture that shares and forgives failures

In her book The End of Competitive Advantage, Rita Gunther McGrath, Professor of Management at Columbia Business School, argues that all organisations need to create a pipeline of transient advantages to replace those that have been competed away. 

Designing a systematic innovation process that supports experimentation, with intelligent failures built into the process, will therefore become all the more important. 

A key component of any such process will be the creation of a culture that shares and forgives failures and even celebrates them if they have been designed intelligently and lead to valuable learning. This might involve leaders sharing their own failures or conducting an intelligent failure audit like the one suggested by Ashley Good, Founder of Fail Forward, an organisation that helps other organisations learn, innovate, and build resilience. 

Learning should take place after both successes and failures. Although the incentives to do a’ post-mortem’ following a failure may be greater, we may need even stronger incentives to understand why we succeeded. Therefore, while it is important to teach students about failure, it is just as important to teach them concepts such as purposeful practice, resilience and tools to facilitate systematic reflection to help them through both the ups and downs.

Deniz Ucbasaran is Professor of Entrepreneurship at Warwick Business School

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