4 minutes read
Why is it so hard to instill an entrepreneurial spirit within corporate structures? One answer to this question has to do with the willingness to make and learn from mistakes. Or, to be more precise, to take novel courses of action that may prove to be “wrong” in hindsight, but which yield potentially exciting insights on technologies, customers, and markets.
Past successes, playing it safe, and future failure
Avoiding mistakes is not simply about “avoiding mistakes”. It is also about avoiding discussing (potential) mistakes. This kind of behavior results in a climate of defensiveness and non-action, and leads to an adherence to routinized practices and “playing it safe”. While this is disappointing in itself, such a climate can become a real liability in markets that move fast and invite disruptive competitors.
Corporate contexts are intrinsically prone to such tendencies as corporates’ very existence embodies (past) successes. The whole organization, its capital, products, its clients, and its brand are responses to strategic questions posed earlier that turned out to be the “right answers”. Many current employees were involved in finding those answers, and they remember how the process worked. It takes a lot of un-learning and openness to embrace the possibility of getting it wrong for the potential learning opportunities that could arise.
Start-ups are less likely to fall into this trap as they do not have the same legacy of past achievements. Early-stage entrepreneurs are more likely to understand that they don’t really know how things will work out. The founder’s actions are guided, essentially, by a set of hypotheses. Yet founders are not always great at admitting their mistakes and correcting course. The whole lean start-up idea is about encouraging entrepreneurs to follow a disciplined approach to trial, error, and learning.
Don’t stop at lamenting about culture: pull levers to make concrete change happen
In the corporate context, this issue is far too often reduced to “culture”. Merely lamenting about culture and not exploring it any further often results in labelling a problem while avoiding a serious discussion about solutions. To address this, we suggest intervening on the organizational, team, and individual levels to un-learn a defensive style of avoidance and move towards a productive tolerance for failure.
Formal organization design is important. A safe social space in which there is sufficient autonomy to try, fail, and learn is a precondition for creating microcosms of learning and excellence. There are different levers for this.
First, the place and level of integration within the overall organizational structure (whether it follows a classical org chart logic or more networked and agile approaches), especially the proximity or distance to dominant business units and functions and to higher levels of decision making. It’s easy to declare a high level of autonomy for a unit, but it takes careful consideration to actually protect this autonomy from de facto spheres of influence.
Second, decision making processes: how do you organize who is formally and informally involved in which decisions and who has the authority to make them? Discussing and learning from mistakes is probably best done within the unit that made them – I argue that the need to “report” them to a higher, operationally uninvolved authority in general will lead to a reduced propensity to openly discuss what went wrong and why.
Finally, spatial arrangements are relevant. I would prioritize set-ups supporting fast and direct personal communication, including the opportunities to retreat for 1:1s, and opportunities to personalize team and individual spaces to become a project’s home (even if temporarily).
The more un-experimental and defensive the overall organizational context, the more a functional learning climate will depend on the skill of the formal unit leader. A leader who’s constantly victimized by hard, specific, and non-negotiable directions received from “above” will hardly be able to instill a credible learning climate within his team. But regardless of context, leadership behavior and practice, and embodying a positive role model on behalf of the leader, are what make all the difference. In the words of Harvard professor Amy Edmondson: “Perceptions may become reality, as the perception that something is not discussable leads to avoidance of such discussions. These kinds of perceptions, when shared, contribute to a climate of fear or of openness, which can be self-reinforcing, and which further influences the ability and willingness to identify and discuss mistakes and problems.” [i]
Leaders, therefore, need to lead the discussion. They need to create a culture of learning from mistakes. What may sound like a paradox – lead the team into the unknown – makes sense from a process point of view: you must not (pretend to) lead the way, but you have to lead the collective effort toward finding a sensible way.
[i] Edmondson, Amy (1996): Learning from Mistakes is Easier Said than Done. Group and Organizational Influences on the Detection and Correction of Human Error. The Journal of Applied Behavioral Science, 40(1), 66–90, 96.