Managing Failure

It's painful to remember these, but if you can go on, recall failure experiences that weren't so dramatic: a customer who told you he was taking his business elsewhere, a prospect that hung up on you or closed the door in your face, a disappointing performance appraisal, a store you were managing that closed, a project you were working on that got cancelled. Failure experiences are pretty common, and since your job is to manage people, you have to admit that part of your role is to create failure experiences for others.

As a manager, you monitor all the people and activities of your business, and when you find an initiative that consumes more resources than it produces and has missed targets for correcting this imbalance, you must act. It's your job, but whenever you do that, you create failure experiences for others. Fired employees go away, but all the other "corrections" you make create failure experiences for people who don't go away, and you must manage them through it.

What does it mean to manage people through failure?

Dean Shepherd, a professor at Indiana University, is interested in this subject, and in recent years, he has learned a lot that can help us. His most recent study examined the experiences of 257 research scientists and engineers whose projects had been cancelled. Shepherd found that people who experience failure have two needs. The first involves learning from the failure. The second involves negative emotions.

When people experience success, they attribute the cause to internal characteristics. They are brave or smart. But when they experience failure, they attribute the cause to external sources. "They" caused the failure, and as the boss "pulling the plug," it's easy for you to become the reason for the failure. As long as people believe this, they learn nothing. The first need for people going through failure is to rewrite this standard script. They need a plausible explanation for the failure that includes danger signs they missed, mistakes they made, and/or shortcomings they possess that contributed to the failure and may have caused it. It takes time to finish this rewrite, and it's painful to do. People need time and support.

The second need involves negative emotions. When people fail, they get upset. Sometimes, very upset. They can get so upset that the quality of their work suffers, at least for a while. They can get so upset that they can't keep working in their jobs at all, and they move on to another employer. Even if they stay, they can be so unhappy about the failure that they withdraw effort and withhold knowledge and insights which could prevent your business from repeating the very mistakes that caused the failure. If they're too upset, they'll allow your business to stumble into the same mistakes again.

People need to create a plausible explanation that is painful to write, and they need to "get over" intense negative emotions that can consume their lives and propel them to self-destructive acts (like quitting a good job). You have a contribution to make.

You can help people rewrite their scripts of what went wrong. Direct their attention to the course of events leading up to the failure. Compare performance expectations at the beginning with actual performance at the time of the failure. Speculate with questions such as "What if we had done this?" and "What if this hadn't occurred?" Consider routines that contributed to the failure. Consider what rules played a role. When you direct an intelligent consideration of the failure, you will help allay negative emotions by showing people a way forward. Without a plausible explanation for the failure, there is no way forward. If the reason for the failure remains external ("they caused it"), then paralysis is the most likely result, a self-imposed paralysis. One can do nothing about "them."

Rewriting scripts and overcoming negative emotions is hard work, and Shepherd found the best outcome occurred when people occasionally took a break from it. During these breaks, people avoided thinking about their recent failure and focused on the present and future. They noticed immediate sources of stress and acted to relieve these. When they were rested and ready, they returned to the hard work of making sense out of their failure experience.

Shepherd also found that it is possible to reassure people too much that a recent failure is OK, and then, people become too comfortable with it. The importance of the failure fades, and learning stops. There is no need to rewrite the script. The failure wasn't important. These people are likely to repeat the mistakes that led to the failure. It is a delicate balance.

Reference: Shepherd, Dean, Holger Patzelt, and Marcus Wolfe (2011) Moving Forward from Project Failure: Negative Emotions, Affective Commitment, and Learning from Experience. Academy of Management Journal, 54(6), 1229-1259. www.businesspsych.org

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