The Risky But Rewarding Challenge of Letting Employees Fail

In Business, failure is not an option!

Unless of course you want to lead an innovative team who push the boundaries of what is
possible and continually look for ways to increase the efficiency of your company or grow your

If you want a team focused on continual change and growth, you need to allow them to fail. In
our role as business leaders we need to provide the foundational elements teams needs to let
them fail thoughtfully, not recklessly.

These elements include business tools, skill-set mentoring and leadership support in order to
ensure every failure is a chance to learn and develop. Provide these, and you’re laying the
foundation for an innovative culture focused on success.

The Risk of Failure

Innovation by its very nature carries an element of risk. Success cannot be guaranteed and in
order to foster an environment where innovation is encouraged, you have to acknowledge the
element of risk, and welcome it with open arms.

We also have to remove the element of fear of recrimination. Employees living in fear of the
ramifications of their failures will err on the side of caution. Innovation cannot thrive in this
type of environment.

Innovation needs to be baked into company culture, and tolerance guidelines need to be set
and supported by the entire management team so there is no ambiguity around what is

Avoid Unnecessary Risks

Risk needs to be embraced, but it should also be measured. One of the inputs for a business
environment risk assessment is an evaluation of the level of risk your company is willing to
accept. Every business needs to throw the dice at some stage, and as every gambler knows,
the higher the stakes, the higher the potential rewards. What each company is willing to
gamble will be different, but whatever it is, guidelines need to clearly defined, and effectively
communicated to all stakeholders.

An integral part of developing a highly engaged workforce is defining where the decision
rights lie. If all decisions have to escalate to the top of the management chain before change
can be implemented, it will have a negative impact on your employee’s willingness to get
involved with the innovation and improvement process.

When it comes to decision-making, there is a delicate balance between strict centralisation,
and outright democracy. Finding that balance is crucial though, as it is a key factor when it
comes to minimising risk and developing an environment where innovation is encouraged.

Formalise Decision Rights

We need to work with our teams to reach an agreement on who can make decisions about
what. Depending on the team’s business acumen, this may be an easy process or may require
a formal RACI exercise to delineate decision rights. This process not only empowers your
employees, but also frees up the senior team to focus on strategic planning.

Just because your team has been given the right to make certain decisions, it does not
necessarily mean they have complete autonomy. In order to encourage cross-functional
collaboration, they will need to solicit input and feedback from all of the stakeholders
impacted by their decisions.

Learn from Failure

So now that we’ve empowered our team and given them the freedom to explore and
innovate, we need to be ready to deal with potential failures.

Instead of trying to brush mistakes aside, we need to learn from them. The right approach is
to replace the knee-jerk reaction of reprimand and recrimination with acceptance and
optimism, and pose the questions “What did we learn?”

Failure is a golden opportunity to learn from the experience. The root cause analysis process,
and failure evaluation will help to find the golden opportunities that often lay beneath the
surface. This process in itself is a beneficial learning opportunity for teams to experience. But
let us remember that not everyone in the team will be ready for this journey, just yet.

Innovation is not one size fits all

We all know that effective teams are made up with a mix of personalities and skill-sets. Your
risk takers will have the conceptual capacity and drive to try new ideas and push the envelope
on risk, but what about the rest of the team?

At the other end of the performance spectrum are the analytical problem solvers who are risk
adverse. No amount of cajoling will encourage them to step out of their safety zone and tak
a risk.

And what about the group in the middle, those who are willing to contemplate risks but are
on the fence about fully committing to a course of action? This group needs the most amount
of mentoring to spread their wings and take a risk.

Even providing this group with the assurances that risk and failure are tolerated and even
encouraged, they will need additional tools to bolster their confidence.

The intent should not be to take away any of their decision rights, but to provide them with
the supplementary tools they need to have confidence in their own decision making ability.

Business Tools for Team Mentoring

The solution could be as simple as training them to use a Strengths, Opportunities,
Weaknesses and Threats (SWOT) Analysis or Potential Problem Analysis (PPA) during their risk
evaluation process.

Another more visual tool is the use of a Risk Assessment Heat Map that helps to evaluate the
likelihood and impact of a failure. The benefit of this tool is that the level of risk a company is
willing to sustain is clearly visualised, but it still leaves the evaluation and decision making
process with the team members.

If these simple but effective tools do not work, a greater level of commitment from us is
required to coach the team through the risk assessment process. This one-on-one mentoring
is an ideal way to increase the bench-strength of our teams.

Allowing our teams to fail is not about abdicating responsibility and setting them up for
disaster. It is about providing them with the leadership and assurances they need to make
effective decisions, and give them access to the tools and coaching they need to succeed.

Risks and Rewards

Innovation plays a pivotal part within a rewarding company culture. It is critical for the long-
term success of your company and crucial for sustaining employee engagement.

A team that is empowered to make decisions, with the opportunity to fail without
recriminations can achieve the unimaginable. Planning for failure and living through it, are
business lessons with high reward, and allow your team to grow exponentially.

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