Between 1530 and 1650, thousands journeyed into the deepest interior of South America. They were desperately seeking the lost city of El Dorado and its untold riches of gold. Ultimately nothing was discovered and the legacy of this period was one of destruction and decimation of the native peoples.

In a similar way, many people are on the hunt for the secrets to success. It’s led to a surge of self-help seminars, business books, and inspirational conferences, in the promise of unlocking the keys to success. Oddly enough though, most come away empty handed.

I have a theory as to why these people have not found the success they so desperately seek. It is because they never learned how to fail and accept failure as the foundation of success.

“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
— Michael Jordan

There is a modern version of the search for El Dorado in the corporate world. It’s called Digital Transformation and the path of destruction is leaving its own legacy. Of the $1.3 trillion spent on these initiatives, upwards of 95% of these programs will crash and burn.

The will to succeed for these organizations exists. The vision laid out by the executive team is sensible. Given the competitive environment and rapidly changing market, doing nothing is not a viable strategy. Enterprises are compelled to transform, yet never manage to achieve any tangible or lasting change.

The reason organizations abandon digital transformation is because they never adopted the will to fail. They try a few things that do not yield results and then they get scared off of further experimentation just at the point where they could have learned something valuable.

Failure is a scary word. When I presented this idea of failure to the operations committee of a bank, one of the executives asked why I choose such a horrible word. Granted, talking about failure with a group whose role is all about order is not the best audience, but it highlights what we all feel about failure.

Startup culture is informative here. Places that have vibrant startup scenes see an overall increase in economic growth. The reason is that startups are a mass experiment in failure. With the sheer number of bets placed in large startup ecosystems, the failures (90% or greater) create winners (unicorns) that lead to an overall uplift in wealth, innovation and the virtuous cycle of growth. The winners “lift all boats” giving rise to places like Silicon Valley.

Another way to think about failure is experimentation. These ideas are already out there, such as the Toyota Way or Agile or Lean Startup, yet enterprises have not truly incorporated the core concept which is about structured experiments, feedback loops, fast learning, and adaptation.

For enterprises to adopt a culture of continuous learning and adaption requires a culture that accepts and embraces failure. This is not a lesson in incompetence, it’s a lesson in using negative results as data points towards greater understanding and positive outcomes. The feature that does not excite users, the message that does not convert, the app that does not gain adoption are opportunities for further improvement.

The challenge is most enterprises are set up to stamp out anything new. The classic story is the digital camera that was invented at Kodak, but rejected as inconsequential. We are drawn to the successes, we thrive in action, we want to swim with the crowd, and we take comfort offloading responsibility to experts. However a learning oriented organization needs to move towards a growth mindset, spend time strategically planning, and embrace a culture of ownership and risk taking. In other words, rejecting the blame culture and adopting learning as a first principle.

So why stick with the word failure instead of experiments or learning? Because it shocks the system and highlights the need to embrace radical change. If a company is embarking on digital transformation for anything less, then the initiative is already dead on arrival.

I mentioned a talk I gave a couple of weeks ago to a bank that was respectfully received (even if not truly embraced). I have cleaned up a version that I am making available publicly to anyone that wishes to learn more about the idea of failure as the path to faster institutional learning.

As one famous inventor quipped:

“I have not failed. I’ve just found 10,000 ways that won’t work.”
-Thomas Edison

What is your organization’s level of tolerance for failure? Are there ways you are introducing continuous learning and experimentation into your culture in a lasting way?

Can “The Giving Tree” be explained in a way that isn’t an unhealthy lesson?

Shout out to my friend Jay who’s leaving Stack Overflow, but never forgotten…

We help IT leaders in enterprises solve the cultural challenges involved in digital transformation and move towards a community based culture that delivers innovation and customer value faster. Learn more about our work here.

Thoughts on developers, digital transformation, enterprise agility, community building & software engineering culture. Author 👉