7 :: Culture of Failure

🚪TL;DR:

Amazon is considered by many one of the most innovative companies ever and it all comes down to its culture and the Leadership Principles. Jeff Bezos is famous for them and it is believed that they are the genesis of his business success. Experiencing it firsthand shed light on the answer to the question above making it clear to me that it is. Only a culture of failure, where risk-taking is embraced, mistakes are celebrated, and lessons learned are documented, can become a culture of innovation. When that culture is infused into the ways of thinking and working of every person in the organization, it becomes something like an innovation self-fulfilling prophecy.

🧠 What is it?
Every organization has a culture - not always intentional, purposeful, or fruitful -, but always there, representing the shared set of values, beliefs, attitudes, and behaviors that whoever is part of it embodies. It is like the modus operandi that brings its vision and objectives to life. Decisions, priorities, expectations. A culture of failure is one in which the answer to the question above is a loud and clear yes, because instead of punishing failure, it sees it as a catalyst for growth and advancement. A good culture of failure adds a layer to it: everyone in the organization lives by those principles. All leaders and colleagues follow the same direction and create a supportive environment for each other. Important to note, though, that it does not promote failure for its own sake but rather to take calculated risks and drive learnings from those that happen.

Note: Other FAANGs (or MaMAAs if you go for the most recent version) have also studied this topic quite extensively and have their own versions of the LPs or company-specific culture traits to promote innovation. All of them somehow related to befriending failure. A famous example is Google’s Project Aristotle which studied hundreds of teams in the company and found out that the most important factor for their success is psychological safety - “the shared belief held by members of a team that the team is safe for interpersonal risk-taking”.

📦 Why is it relevant?
While the Fire Phone or Amazon Spark are two of the many public big failures of Amazon, they were also collateral damage for the big successes of opposite examples like Amazon Web Services, Amazon Prime, Amazon Go, or Alexa. They are clear illustrations of the role failures play in driving innovation. Failure is an inherent part of trying new approaches or pushing boundaries, so encouraging one triggers the other and, in combination, creates a natural environment for innovation. When the right guiding principles are in place - aka when they are set intentionally and not only imprinted in the wall at the office but actually put into practice from how you evaluate performance to who you hire -, the right culture and its consequences arise. The idea of failing fast and often is, therefore, another one that CINOs should steal from the startup world.

🧶 Where to learn more about it:
This is a topic that unfolds in many and all worth learning more about - even though I’ll only cover some of them. Here is a study about culture's impact on innovation. For how to learn from failure, here’s a good HBR article. On risk management, this one. Lastly, for a good overview of how innovation is produced at Amazon, check this. The Failing Forward book is also a classic on the topic and even though I haven’t read it fully yet, I’ve heard its key ideas on Blinkist and it is worth the 14 minutes.

See you next Tuesday! 👋