Photo by: Bev Goodwin

When I read articles about failure at large organizations, I’m always left with a sharp contrast in feelings:

  • First, a warm glow— it’s okay if I screw everything up, I’m learning!!
  • Then, dread— the possibility of the irreversible, deep consequences my failure could have (and has had) on my family, friends, colleagues and customers.

Part of the reason, I think, for my strong response, is that most articles that address failure speak about it in high-level, general terms, which leaves me, and countless other readers, with the burden of unraveling this emotionally-laden term on our own.

Last week, for example, NPR’s Diane Rehm interviewed Megan McArdle about her new book on learning from failure: “The Up Side Of Down.” In that single hour, there was huge range in what constituted a failure story, from individuals who still struggled to find their dream jobs two years after finishing grad school, to IT software that was not implemented as expected, to the story of Colonel Sanders and his many botched career attempts before starting KFC. With no clear definition of failure in my mind, I finished the broadcast feeling overwhelmed and conflicted on how I should I should approach it in my own life.

At Peer Insight, we work with established organizations to create new services and new lines of business. How should they think about failure?

Nearly everyone has heard the story of Coca-Cola’s failure in launching “New Coke” during the 1980s. They survived the fiasco because they, like most big organizations, had a huge bank of resources, brand collateral and other revenue streams to cushion the fall. However, an entrepreneur with limited resources can’t survive a blunder like “New Coke,” and so, in order to be successful, she must ensure that she really understands her customer before making a costly mistake like Coco-Cola’s. Lucky for Coca-Cola, they recognized (and owned) their failure early on and responded swiftly and appropriately to the consumer uprising. If only all large organizations could be so lucky.

In most organizations, when formerly-booming margins slow and level out across the years, it often gets blamed on external factors and results in the organization attempting to stoke growth through tactics like acquisitions and cost-cutting. However, learning to approach business challenges like an entrepreneur— like the CEO of a startup—would be a much better use of funds, requiring less resources than other kinds of growth strategies.

The “New Coke” fiasco was a result of many things, including poor research design, that lead to a dismal and incorrect understanding of their customers. It is well known that Coca-Cola has vast capabilities for market research (just take a look at their many “taste-test” videos), but was ethnographic research something that was less understood?

Large companies have sizable budgets dedicated to keeping their staff learning, learning, learning. Entrepreneurs, however, don’t get paid to learn, to them learning is a necessity.

For the “intrapreneur,” big budgets plus a desire to learn = huge wins for any organization! So keep intrapreneurs happy by providing growth opportunities that could, in turn, save your company. Some of the tactics we’ve seen corporate innovation teams employ include learning circles, innovation and design book clubs, internal and external feedback loops, and the use of “learning” as a unit of progress in performance reviews.

What other advice would you give large organizations as they think about failure? Message me: @natalie_s_foley

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