Why Are We So Afraid to Talk About Failure?

Failure - it’s a word that unsettles people, especially in high-stakes business environments. We celebrate success, we write books about it, we host conferences to share best practices. But how often do we openly talk about failures, what they teach us, and how they shape us into better leaders, entrepreneurs, and decision-makers?

I once met a group of senior executives and some board members who were planning to build a private bank. Their primary concern was finding the perfect technologist to help them build this venture. During our conversation, they asked me how I could be sure that I was the right person to guide them through this journey. My response was straightforward: "Because I’ve learned from my past - both from my successes and my failures."

The moment I mentioned the word “failures,” I could sense discomfort. Perhaps they were a superstitious bunch, but their reaction revealed something deeper, a reluctance to discuss failure. The irony is that anyone who claims to have never failed is either lying or inexperienced. Building a bank, a startup, or any business requires resilience, and resilience is not developed without living through setbacks and challenges.

Those who have never failed have likely never taken meaningful risks.

The Psychology of Failure

Psychologists have long studied the human tendency to fear failure. Carol Dweck, in her influential work Mindset: The New Psychology of Success, explores how people with a fixed mindset view failure as a personal flaw, something to be avoided at all costs. In contrast, those with a growth mindset see failure as an opportunity to learn and improve. This fundamental difference separates those who stagnate from those who continuously evolve.

Is failure a personal flaw or an opportunity to learn and improve?

Daniel Kahneman, in Thinking, Fast and Slow, explains how our cognitive biases often make us overestimate our successes and underestimate the value of learning from mistakes. We tend to engage in loss aversion, fearing failure more than we value success, which can lead to risk-averse behaviour and missed opportunities.

Common Business Failures and Lessons Learned

One of the most common reasons startups and new businesses fail is running out of funding. Many entrepreneurs are overly ambitious in their early stages, attempting to scale too quickly without securing stable financial backing. They focus on rapid growth rather than sustainable cash flow, leading to premature collapse.

A classic example is Webvan, an online grocery delivery startup from the late 1990s. Webvan raised hundreds of millions of dollars and expanded aggressively across the U.S. before perfecting its logistics model. The company burned through its cash reserves too quickly, ultimately leading to bankruptcy. In contrast, Amazon, which started much more conservatively, took the time to refine its e-commerce and supply chain operations before expanding into new verticals.

Another famous case is Theranos, the biotech startup led by Elizabeth Holmes. While the company collapsed due to fraud, a key underlying issue was the unwillingness to acknowledge and address failures. Holmes built a culture where employees feared admitting mistakes, leading to disastrous consequences. This highlights a critical lesson:

When businesses fail to create an environment where setbacks can be discussed and learned from, they set themselves up for even bigger failures.

Why Talking About Failure Matters

1. Failure Builds Resilience: Angela Duckworth, in Grit: The Power of Passion and Perseverance, argues that resilience is the most significant predictor of success. People who learn from failures and persist despite setbacks are more likely to achieve long-term success.
2. Failure Encourages Innovation: Some of the most successful companies in the world embrace failure as part of the innovation process. Google, for example, has a culture of experimentation. Projects like Google Glass failed, but the lessons learned paved the way for advancements in augmented reality and wearables.
3. Failure Enhances Leadership: A strong leader acknowledges past mistakes, learns from them, and uses that knowledge to make better decisions. Ray Dalio, in Principles, discusses the importance of radical transparency and learning from failures to improve business operations and leadership.

Resilience is the most significant predictor of success.

Shifting the Narrative Around Failure

We need to change how we talk about failure in business and leadership circles. Instead of treating it as a taboo subject, we should encourage open discussions about mistakes, what led to them, and how to avoid repeating them.

One way to do this is through post-mortems - structured reflections on what went wrong and what can be improved. Companies like Amazon and Netflix routinely conduct post-mortems after failed projects to extract valuable insights.

Another approach is mentorship and storytelling. Experienced leaders should share their failure stories with younger professionals, normalising setbacks as part of the journey. This not only builds a culture of learning but also fosters trust and authenticity in leadership.

Experienced leaders should share their failure stories with younger professionals, normalising setbacks as part of the journey.

Final Thoughts

The next time you find yourself in a conversation about business, leadership, or entrepreneurship, try bringing up failure. If people shift uncomfortably in their seats, remind them: those who have never failed have likely never taken meaningful risks. And those who have failed but learned from it are the ones best equipped to navigate the unpredictable world of business.

So, what failures have shaped your journey? Let’s start normalising this conversation.

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