Silver linings: What we can learn from businesses that failed

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Talk to serial entrepreneurs and they’ll almost all tell you for all their successes they’ve also had plenty of failures. They’ll probably also tell you that they learned way more from the businesses that have failed than the ones that succeeded…

Why is that? And why are the learnings so valuable?

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If innovation is about doing new things, failure is inevitable at some point. On a large scale and also small. Rather than seeing failure as, well, an abject failure, we should ask ourselves how we can learn the most from business failure.  In fact, that’s the single most important action to take. If you don’t question why or how things went wrong, the opportunity to learn, grow and improve will be lost.

“If innovation is about doing new things, failure is inevitable at some point.

The value of business failure

Failure makes you analyse, to look for the weak spots, what were bad decisions or poor planning, and also what was just bad luck.  We can learn plenty from the mistakes of others. Not just the familiar tales of businesses that failed like Blockbuster who stubbornly refused to innovate, but also from those like LEGO who, staring bankruptcy in the face,  grasped the nettle and took action, to dramatic and fruitful effect.  It’s also the thinking behind the Museum of Failure, a travelling exhibition that celebrates the upside of failure – it champions experimentation and innovation, and looks to understand why certain products crashed and burned.

The rule holds true for projects as well – they don’t all go well or according to plan, and seeking to understand why rather than allocating blame is where we can find value, even though we may not have had the outcomes we wanted.  It allows us to find the improvements and get us closer to a solution next time. (In fact asking why and how is a good discipline in any event – we should also do it when things go well to ensure our success is repeatable)

So how do you find these gems of insight in the ruins of of a project or businesses that failed?

Learning the most from failing

The value of a good retro should not be underestimated. This learning opportunity is one of the reasons a retro (if you’re not familiar with the term, it’s a retrospective look back at the work)  is a crucial part of any project. It’s not there to congratulate ourselves or beat ourselves up, but to find the insight that drives success – and also failure – so it can be repeated (or avoided) next time. 

And no project is 100% failure and so analysing what went wrong, and uncovering what did work gives us the encouragement to keep going.

At the same time embracing failure and learning to control it is a great starting point to becoming truly innovative. A subject Katie Stotter, Strategy Lead at &us, talks about here.

“The value of a good retro is to find the insight that drives success – and also failure – so it can be repeated next time.”

Getting the most from a retro

In a typical retro, we might ask the traditional kind of questions – what went well? What went badly? What actions shall we take forward? These questions work for reflection, and draw your attention to the fact you need to look at both the good and the bad to be able to move forward. However, they can lead to quite superficial answers, by focusing purely on the what, at the expense of the why and how.

Extending the questions to ‘why did we do well?’ and ‘why did we do poorly?’ leads you to root causes. You can learn from the things you chose or let happen that resulted in the good or poor result.

Then you can add other questions – ‘what should we keep doing’ (this is what you did well that you think you should do again next time), and ‘what should we start doing?’ (these are the things you might’ve missed, or things you’d do to mitigate the poor outcomes). These are constructive questions that lead you to ‘how’.

 But with a re-frame, and better questions, you can get to a deeper, more constructive level of learning. 

Questions to ask in a retro

  • What was good / bad? 
  • Why did we do that was good / bad? 
  • What should we keep / start doing?
  • What was loved, learned, and longed for?
  • Share some appreciation for team members
  • What did you learn? 
  • What did you do for the first time? 
  • What will you take with you?

For even more good questions to ask in a retro, read this post from our Good Questions series