Learning From Failures: The Key to Organisational Success

Success is the goal for every organisation. The defining metrics may vary, from financial profits to delivering environmental benefits, but achieving success is the ultimate aim. In a results-driven professional environment, failures are seen as undesirable and if they do occur they are taken as learning opportunities to improve. Learning from failures is often seen as a simple process. Accountability is sought, the reason for failure is determined and individuals are asked to not repeat the error. Depending on the reason and severity of the failure, new processes and procedures may be implemented.

The reality is that learning from failures at an organisational level is far from simple. Firstly, it relies upon failures being confronted and dealt with openly. This can be a painful process that is tempting to avoid. For instance, a well-documented procurement failure was the Department for Transport awarding a ferry contract to a company that had no ships and had website Terms and Conditions taken from a food delivery company [1]. The then Transport Secretary’s public response was to state ‘It’s a new start-up business, government is supporting new British business and there is nothing wrong with that’ before the contract award was later cancelled. This clearly indicates a lack of willingness to acknowledge and confront a failure.

Even when there is a willingness to address a failure it can be difficult to learn from the incident. The strong motivations to address a failure in its immediate aftermath can fade over time. Additionally, over time competing pressures may emerge which make the original failure more likely to occur. For instance, a common failure in a procurement process is low-quality products or services being secured due to an overwhelming focus on cost savings. This often sees institutional learning from those involved in the short-term, with subsequent procurement processes seeking an improved balancing of price with quality of the product and services. Yet moving forward over the long-term, this learning from failure is often lost. Employees move on and pressures change, with a focus returning on delivering cost savings. Therefore the original failure is repeated.

Without effectively learning from failures, organisations are doomed to repeat the same mistakes. To push industry boundaries and maximise innovation in an increasingly competitive environment requires both accepting and learning from failures. Indeed the Chartered Institute of Procurement & Supply (CIPS) estimates that 90% of procurement system rollouts fail [2].

However, an effective procurement system can deliver a variety of benefits such as increasing spend transparency, increasing productivity and reducing errors. Therefore, if organisations are seeking to roll out effective procurement systems, there must firstly be a tolerance of failure. Secondly, organisations have to be able to learn from previous failures to prevent multiple costly failed attempts.

It is evident that organisations can benefit from a more sophisticated approach to learning from failures. There are a number of key areas that organisations can consider and implement to address this issue:

*4-Step approach to learning from failures*

Learning from failure is not easy and it is even harder to sustain the learnings. However, it is crucial to an organisation’s success. That an acceptance of certain forms of failure drives innovation and continuous improvement is well accepted in modern organisations. However, few organisations effectively learn from failure. Those that do can unlock added value and deliver more successful results.

Words by Jack O’Callaghan

References:

[1] Grayling defends giving Brexit ferry contract to company with no ships | Brexit | The Guardian

[2] 90% of procurement software rollouts end in failure - Supply Management (cips.org)