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Dennis McMullin, Marketing Director at OYO Geospace and a good friend of mine, recently sent me a link to a blog that mentions yet another article about the value of failure, particularly in regard to innovation; this one happens to be from Business Week. As a matter of fact, in the last few months I’ve read dozens like it.

I and many others have blogged about how ideas like this can spread across the blogosphere like ripples on a pond, and that’s as it should be: one of the great wonders of the internet in general, and blogging specifically, is the absolutely awesome ability to communicate and exchange ideas with folks from literally across the planet, in real time.

Even though the idea that failure has value in innovation is not really new, at the moment it’s become the latest, well, fad. (For thoughts on how to determine which “new things” are truly new, I highly recommend Bob Sutton’s ChangeThis Manifesto.) You can almost see it now, can’t you? We’ll have a new crop of consultants, seminars and business school courses coming soon: Fail First, Fail Now, and Fail Often – How to Build a Business by Being a Complete Failure! (No doubt bumper stickers, T-shirts, and other merchandising are soon to follow.)

Now don’t get me wrong. I have no problem with the validity of the concepts being presented – it actually makes sense that to get great innovations, you’re going to have (at least in my case!) great failures, and lots of them. I understand and agree that failure can be a great source of learning. In fact, I’ll even go so far as to say that lessons learned from failure are, for the most part, far more readily remembered than lessons learned from our successes.

The question I would like to have answered, though, is whether or not the real world is anything like the theory. It all sounds well and good to say that failure is just another process on the road to success, but how many “out there” still operate under the reality that failure is a good way to, shall we say, “manifest negative advancement” at your workplace?

If you believe the articles (and truly, there’s no reason not to), there are many companies out there who have literally built in the means to profit from failure. But what I’d like to see is a survey that distinguishes the types of companies (or in some cases, the divisions within a company) where this is actually true. Where is this most successful? What industries is it most likely to succeed?

When I brought it up, Dennis contributed this opinion:

“There is a “right” way to do things and there is the way things are done. This will NEVER happen in “public” companies on a wide scale until companies can demonstrate to their investors a direct link between failure and increased profits – investors are the most failure-adverse and strongest driver group in the mix. It has a better chance in privately held companies.”

While it’s true that investors tend to drive things in public companies, I do want to offer some other evidence. But before I go on, I’ll give you a little background, and then share a short but true story.

I work for a very large publicly-traded engineering firm, a pragmatic place to work if there ever was one. Now, most people don’t think of the engineering field as a hotbed of innovation, because what we do is mostly based on tried-and-true practices, known quantities, and proven technology. So we’re pretty typically risk-averse in the sense that failure is considered a bad thing.

Like other firms of our type, we have an arrangement with several of our clients in which my company provides the engineering expertise for their small to mid-cap engineering projects. This in turn allows them to avoid having to staff their own engineering department. The arrangement works very well because core competencies are maximized to the benefit of both parties.

Anyway, due to a combination of many events over a period of months, one of the projects I currently manage got into some real problems, to the point where the estimated costs became nearly triple the original estimate. Although we (meaning us AND the client) tried our best to keep things on track, it just got out of hand and finally the client called a halt. After an investigation of root causes, etc., the client redefined the project’s objectives to the point where we pretty much ended up with a completely different project. The project is currently in the process of being restarted.

Now by anyone’s definition, this project was, if not completely failed, then certainly on the road to failure. (Let’s be honest. It was a train wreck!) But here’s the interesting part. Not one time during the troubled last few months, through the investigation, and even today has there been any hint of blame, fault-finding or witch-hunting, neither from the client or my own managers.

We started a project. It failed. We identified the cause(s). We defined the solutions. We started over. Will this equate to project success? Only time will tell, but in this case we are confident it will.

In the real world, failure can be a positive experience or a negative one. What’s the defining factor? Culture. In an engineering firm, where failure can represent considerable lost dollars, or worst of all, people hurt or killed – our culture allows (but does not encourage) people to fail without recrimination. That’s because the ability to demonstrate learning from mistakes is a desired quality. The inability to demonstrate this might still result in “negative career advancement”.

So what’s it like for you? What happens when failure occurs in your workplace?

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