THE BLOG
03/25/2011 04:44 pm ET | Updated May 25, 2011

When Wrong Makes Right: The Upside of Failure

If you haven't achieved the success you thought you would by now, blame failure -- or, rather, the lack of it.

Confused? Don't be. The surprising truth about success is this: it often is the byproduct of repeated failures. Take NBA legend Michael Jordan, widely regarded as the best basketball player of his generation. Most fans only remember Jordan as the unstoppable force that powered the Chicago Bulls to six NBA titles. But Jordan himself remembers his many setbacks. In a famous commercial for Nike, the five-time MVP recalls the field goals he missed -- 12,345 to be exact -- the dozens of winning shots that came up short and the hundreds of games he lost. "I've failed over and over and over again in my life. And that is why I succeed," he says.

Then there's entrepreneur James Dyson, whom I have profiled before. In 2007, the vacuum magnate told Fast Company Magazine that failure is a primary ingredient in success: "If you want to discover something that other people haven't, you need to do things the wrong way. Initiate a failure by doing something that's very silly, unthinkable, naughty, dangerous. Watching why that fails can take you on a completely different path."

Throughout history, many famous people have discovered the road to success was paved with temporary setbacks. Albert Einstein did. So did Ronald Reagan, Sam Walton and The Beatles. When these individuals experienced disappointment, they gained new insights and became stronger afterwards. As I like to tell my children, "Fail early, fail often, but don't fail twice for the same reason." Loosely translated, it means this: Challenge the norm but recognize quickly when and why an idea does not work; liberally apply insights gleaned from previous setbacks; and never forget the lessons of the past.

This advice isn't new or unique to Silicon Valley, but it's not followed as widely as it should be. In fact, some experts believe safeguards put in place to prop up banks and other organizations are actually hurting institutions by mitigating their failures. As a result, they don't learn from their setbacks what they should. In an article penned for HBR.org this month, author and researcher Umair Haque concludes, "America just might be terminally deficient in terms of one of the fundamental drivers of 21st century competitiveness: what I call economies of failure."

How did this happen? This month's Harvard Business Review examines why. In particular, the magazine explores why so many leaders fear what editors call the new "F-word" of business. Some managers, for example, are loathe to disappoint their colleagues or upset their investors. Others fear retribution if they try something and fail. Unless they are negligent or downright foolish, they shouldn't. Instead of penalties, they would do better to think in terms of missed learning opportunities. Take Dyson, who famously made 5,127 prototypes of his namesake upright vacuum before getting it right. Each time he erred, he reminded himself that he was learning how not to make a better device.

Innovative leaders from other fields often say the same. At the Game Developers Conference 2011 held this month in San Francisco, several leading innovators shared a stage to discuss what they learned from their biggest blunders -- and what others could glean as well. PopCap senior game designer George Fan, creator of "Plants vs. Zombies," told the audience that he learned to keep things simple after producing one of his biggest failures, "Cat-Mouse Foosball." After realizing the error of his ways, Fan thought about quitting the game business, which is ironic given that learning from mistakes is the point of many video games. But Fan persevered, crediting his overly complicated disappointment for helping him produce hits later.

Today, smart organizations are also thinking long and hard about their failures. They are warming to the idea that innovating is as much about shortfalls as it about breakthroughs. To that end, they're developing processes for analyzing their mistakes and institutionalizing the learnings that come from them. To get to these understandings, they ask tough questions: Was our vision wrong, or our strategy or execution? Instead of denials and excuses, they examine their assumptions, biases and methods. Every time they make a mistake, they endeavor to discover why. Then they make necessary course corrections.

If you are bold and willing, you can do the same.

Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco, and the author of Doing Both: How Cisco Captures Today's Profits and Drives Tomorrow's Growth. Author proceeds from sales of Doing Both go to charity. Follow Inder on Twitter at @indersidhu.