WANT A FAIL-SAFE TEAM? MAKE IT SAFE TO FAIL!

All the talk of the importance of failure can feel tired at times. Beyond that, it can feel ingenuine – as much as people say they believe in the importance of failure for success, it feels unlikely that they themselves actually want to fail and even more unlikely that they believe pursuing failure as an end in itself is a wise or worthy approach.

However, it remains true that genuine, well-meaning, measured and sensible risks that result in failure must be applauded and encouraged. The reason for this is that they are a sign of genuine risk-taking, and in an age of disruption, the surest sign that an organisation will fail is an unwillingness to take genuine risks.

Aside from the discomfort that inevitably accompanies the behaviour, one of the primary reasons people avoid risk-taking is that there is little incentive to do so. On the contrary, many organisations tend to actively disincentivise risk. There is no point urging risk-taking but then punishing failure, explicitly or implicitly.

Reflecting on the need for banks to adapt to the disruptions posed by technology, the former CEO of Barclays bank, Antony Jenkins, suggests that an appetite for boldness must start at the top:

“Boards will need to accept that we live in a discontinuous world. They should ask executives to take significant but calculated risks by working on projects that no one else is working on. Also, leaders need to lead differently. In my experience, people become more risk averse the more senior they become. But doing the same thing a little better is now the riskiest thing you can do.”[1]

Traditional reward and incentive programs focus on improvement, growth and linear advancement. Employees are encouraged to do what they did last quarter or last year but slightly more profitably, frequently or efficiently. Incentives are tied to the degree to which these improvements are realised.

Structuring incentives this way certainly seems intuitive and even sensible, all things being equal. But that’s just the problem. All things are far from equal. Businesses and leaders are going to have to do things in dramatically new and different ways in order to stay at the cutting edge.

Picking up on this, prolific Harvard Business Review contributor Scott D. Anthony suggests that leaders would do well to move from rewarding innovation outcomes to rewarding innovation behaviours.[2]

As an example of this encouragement of risk-taking, consider Spanx founder Sara Blakely, who grew up with a keen awareness of the power of failure. Her father would often ask, ‘What have you failed at this week?’ Learning early on that the one thing worse than failing was to not try, Blakely developed the perseverance necessary to build the billion-dollar empire she has.[3]

Implementing this kind of posture towards risk-taking and failure within an organisation can be as simple as framing performance review discussions around experimentation. Imagine how the tone and culture of a performance review would change if employees were asked questions such as ‘What daring risks have you taken over the last month?’ or ‘What have you tried that has failed recently — and what did you learn?’ While only the especially brave businesses may go on to tie bonus payments to levels of daring or risky behaviour, even affirming this behaviour in discussions and highlighting that it is both welcome and expected can be a powerful incentive.

When incentivising boldness, some creativity can go a long way. When Jim Donald came to the helm of Extended Stay America in 2012, the former CEO of Starbucks recognised the need to inject a daring spirit into his new organisation. With the national hotel chain having only recently emerged from bankruptcy, the prevailing culture was one of survival. Employees were so focused on not losing their jobs or making mistakes that might cost the company money, there was zero appetite for innovation or inventiveness.

In order to address this fear-driven paralysis, Donald gave everyone a safety net by creating a batch of miniature ‘Get Out of Jail, Free’ cards. These cards gave employees a free pass should they make a mistake. The cards were distributed to all 9000 employees with the assurance that if they took a risk on behalf of the company and things went wrong, they could call in the card and no questions would be asked.

This simple but ingenious move instantly signalled that employees had permission to try again. To take risks and be daring.[4] ‘You can’t just avoid all risk, because it will lead to entropy’, Donald explains.

One simple way to encourage bold thinking and risk-taking is to change the language we use. A colleague of mine from the Netherlands named Cyriel Kortleven has found that recasting the vocabulary of failure can make all the difference. You will never hear Cyriel talking about ‘failure’ but rather he encourages clients to refer to misfires and mistakes as ‘nearlings’. This term describes something new that was done with the right intentions but that has not yet led to the desired result. Although it may sound like little more than semantics or wordplay, Cyriel points to example after example of clients whose thinking shifted substantially by reframing the concept of failure.[5]

Ultimately, creating a culture that makes risk-taking and failure not only safe but praiseworthy necessarily begins at the top. Cultures and structures of the past tend to reward those who have played it safe enough to keep their noses clean and their record untarnished. However, the leaders who push the frontier forward are those who are willing to take risks and challenge conventions.

People will not naturally take risks unless they are actively encouraged and incentivised to do so and they see it modelled. Removing disincentives and constraints on risk-taking is a good start, but actively fostering a daring culture of boldness from the top down is key.

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Michael McQueen is a trends forecaster, business strategist and award-winning conference speaker.

He features regularly as a commentator on TV and radio and is a bestselling author of 9 books. His most recent book?The New Now?examines the 10 trends that will dominate a post-COVID world and how to prepare for them now.?

To see Michael speaking live,?click here.

For more information on Michael's keynote speaking topics, visit?www.MichaelMcQueen.net.

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[1] Williams-Grut, O. 2015, ‘An “Uber Moment” Is Heading For The Banking Industry’, Business Insider, 27 November

[2] Anthony, S. 2017, The Little Black Book of Innovation, Harvard Business School Publishing, p. 65.

[3] Krupp, S. 2015, ‘6 Strategies Great Leaders Use For Long-Term Success’, Business Insider, 19 May.

[4] Kwoh, L. 2013, ‘Memo To Staff: Take More Risks’, The Wall Street Journal, 20 March.

[5] Kortleven, C. 2016, Less is Beautiful, p. 161.