Mallen Baker explains why companies need to be free to make mistakes for ultimate success

Every successful endeavour is built on a history of failure. That is pretty much universally true throughout human history. But we have become intolerant of failure – and that is a big problem.

Prof Yotaro Hatamura at the University of Tokyo is the founder, of all things, of the Association for the Study of Failure. Rather handily, Tepco – owner of the Fukushima power plant – is a member.

He has set up a “failure knowledge database” focusing on 1,175 accidents and isolating whether they were caused by design flaws, human error, or changes in use that arose over time. It has identified that the latter element is a far more common factor in engineering failure than previously realised.

And, of course, that is the point. The reason for setting up such a database is the simple truth that if you don’t learn from failures, you will keep failing in pretty much the same way over and over again.

In sport, we accept failure. Every tennis player who wins one of the major tournaments and gains entry to the sport’s elite group of top winners only got there having lost hundreds of times. And after every loss, the good ones would look at why they had lost, what they needed to add to their game, what they needed to improve.

Up and coming tennis youngsters are hungry to play the best players. Sure, they might fantasise about causing the big upset and rocketing to fame in one single game. But more realistically, they know that by being beaten by the best players, they will learn exactly how they need to improve their game to achieve that level themselves.

In business, and in civil society, we do not have such a culture.

Maybe it’s the news media that is a key factor. You only have to listen to someone like John Humphrys on the BBC’s Today programme to see how relentlessly focused on finding someone to blame some journalists have become.

If something goes wrong on your watch, then if you’re in charge you should pay for it with your job. If you’re a CEO of a global company, and there’s a big accident you’ve got to go. Or if you get two, God forbid even three, poor quarters in a row.

Private benefits

This is why privately run businesses can, sometimes at least, provide the best model. Richard Branson has failed many times – we only know about some of those failures because he has talked about them in his autobiographies. But he is known principally for his successes. Of course he was free to learn from his failures and move on. Nobody was in a position to sack him when it happened.

He still had to learn, because if he hadn’t then sooner or later his businesses would have failed.

In the public sphere, our response to failure is almost guaranteed to breed more failure. We take a boss who has “failed” and cast them aside. The main criteria for their replacement is that they should be free from the taint of failure themselves. So by definition, we put someone in position who hasn’t learned the lessons the hard way.

You might agree with the contention that this is wrong in theory – but I bet if we start putting names into the frame you will start to instinctively and intuitively come up with reasons why those names deserved to go.

Tony Hayward of BP comes to mind. Andy Hornby of HBOS is another. In another sphere, Sharon Shoesmith of London’s Haringey Social Services. All of these were leaders who were respected by their peers before events made it unacceptable to show them support in public.

For me that is a key defining feature. There are other leaders who are well known by their peers to be arrogant, obnoxious, and blind to factors that fall outside their own ego. These leaders often more directly create the circumstances for their departure because they demonstrate that it was their own poor leadership that created the problem and they have no capacity or humility for learning the lessons of failure.

Step up Fred Goodwin. Say “hi” Chuck Prince. This is not about excusing bad leadership. Some people do deserve to be kicked out.

And it’s not just about leaders – but the whole workforce. There’s a TED talk by Sir Ken Robinson on education, where he identifies how the lack of fear of failure is a key part of what makes creativity possible.

But it can’t be achieved if holding businesses to account means finding new vehicles for the blame culture.

Mallen Baker is founder of Business Respect and a contributing editor to Ethical Corporation. 


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