“A failure is not always a mistake, it may simply be the best one can do under the circumstances. The real mistake is to stop trying." -- B.F. Skinner, American psychologist, inventor and author
Failure is often the one thing people try to avoid – sometimes to their detriment. But should they? I prefer to think of failures in three varieties:
- “Bet the ranch” failures – generally to be avoided, they should only be undertaken in dire circumstances and with the full knowledge of owners or boards of directors. In the recent financial crisis many financial firms were “betting the ranch” without knowing or explicitly acknowledging the gravity of the business risks being undertaken.
- Costly failures – these business failures occur frequently and systemically have much in common with the first group: all of the risks of a given course of action have often not been properly recognized, evaluated, and/or communicated to the relevant owners or boards. Anticipating risks and planning for their mitigation is an integral part of minimizing costly failures.
- Learning failures – these are or should be the most common and should be encouraged in most organizations. Sometimes, we simply cannot know what will work until we try something. A great example of encouraging “learning failure” risk taking occurs in direct marketing where the mantra is “test, test, test” before rolling out a major marketing campaign. The goal is to incur lots of small failures while working out the campaign details before risking large amounts of money.
Maybe we should change the conversation – instead of “try and fail”, let’s call it “test, test, test.”