Many firms incorporate something in their values statements that encourages experimentation and recognizes the reality of failure in pursuit of learning and growth. The understanding that to succeed you have to fail first is common knowledge for most of us. However, it’s not the words on the values sign that bring life to a culture of experimentation, but rather, it’s the response of senior leadership to the inevitable clunkers that determines how willing people are to take risks and pay the lessons learned forward.

I have more clunkers to my credit than most people would be comfortable admitting publicly. And while the clunkers created sleepless nights and a fair amount of internal anxiety, I take satisfaction not in having politically survived these failures, but rather, in having leveraged those failures for future gains that propelled our teams, products and firms forward. Of course, a bit less pain along the way would have been nice, but I’ve yet to find the path to innovation that doesn’t include some discomfort in the process. Thankfully, the people I worked for had fairly high pain thresholds.

In the most successful firms I’ve been around, the managers actively promote experimentation and learning as core to everyone’s job. Yet, it’s not the words on the wall or even the words that come out of their mouths about experimentation, it’s the actions they take when things go horribly wrong that fosters the effective learning environment. In a number of these firms, this support of learning is so strong it creates the gravitational pull that keeps the top performers in place long-term and not drifting towards competitors.

3 Counter-intuitive (and Effective) Responses to a Failed Initiative:

1. Throw a party. Seriously. One of my favorite managers leveraged the occasional project gone horribly wrong scenario with this counter-intuitive tactic. It was his way of pulling the final plug…telling us how much he valued our efforts and charging us up for our next run at something new. For one particular disaster, he sponsored a day at a theme park. While I carefully checked the safety harness on my first roller coaster ride just in case, it was his way of helping us blow off steam. An important note here; the party wasn’t the end of the process, but the beginning of the next phase of learning. After the fun was over, he put us through the paces of rolling up lessons learned and identifying pieces of intellectual property that could be inventoried and used for the future.

2. Invite Some Outsiders to Help You Study Your Failure. While not as fun as the party process described above, this technique of peer review served as a powerful learning tool. We invited a group of uninvolved experts to challenge everything from our assumptions to our decision-making processes and execution approaches. The playback of the project plus the clinical, detached questioning from the outsiders created a powerful environment for reflection and learning. The results were carefully summarized and archived for review prior to our next initiative. In fact, every new project team spent at least a week as part of their forming process reviewing cases from other project teams as a means of sensitizing the members to historic success and failure factors.

3. Make a Case Out of the Failure. No, not a federal case, but an actual working case to be studied by other groups. Closely related to the “outsiders” suggestion above, the team would create their form of a thinly disguised business case and then sit by and listen and learn as other groups assessed the case and proposed different courses of actions. While this might sound onerous or even too academic, the effort that went into creating the case required a detailed review of the assumptions and processes, and everyone gained insights from the experience of watching the new groups work the case and develop their own approaches.

The Bottom-Line for Now:

Most managers and most firms work hard to eliminate the odds of misfires and miscues. While I don’t encourage managers to run towards failures, the process of moving forward requires frequent backing up. When it comes to projects or major initiatives, you cannot plan your way to success on paper and expect the plan to unfold as predicted. You have to deal with the messy, sometimes unpredictable nature of people and the inherent challenges in doing something new. Your response at the point of failure is critical to what happens next.

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