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The 7 Essential Steps for Putting Failure to Work

The 7 Essential Steps for Putting Failure to Work
Failure is an essential and often neglected resource in a leader’s toolkit. But the specific ways of anticipating, responding to and learning from failure can make or a break a leader’s success.

It’s the dirty secret no one wants to talk about: Failure. It’s everywhere in business, in fact the most successful products and services we use today likely went through numerous failed iterations before seeing the light of day. But no one wants to talk about failure, for obvious reasons; it can be painful and humbling in a competitive and high-stakes business world. Mark Coopersmith, co-faculty director of the UC Berkeley Executive program, The Start-Up Mindset, is an expert at understanding the drivers of innovation and entrepreneurial success. He says that sweeping failures under the rug is a mistake and that leaders should learn to appreciate inevitable failures as opportunities. “It’s kind of like gravity, it’s around us all the time, pulling us down,” he says. “We have to recognize that and learn to leverage it.”
The key to de-stigmatizing failure and learning to leverage it is to start using failure as a process. Coopersmith, along with John Danner, senior fellow at the UC Berkeley Lester Center for Entrepreneurship and Innovation, conducted research into hundreds of organizations across industry sectors, observing failures which that led to eventual success, along with those that didn’t. From this research they recognized a consistent pattern in companies small and large, of failure-savvy leaders who were able to persevere from otherwise massive setbacks. From these findings, Coopersmith and Danner distilled seven stages of what they call the “failure value cycle”:
  1. Recognize that failure is inevitable. Many leaders are unwilling to disrupt their “static quo,” their current situation, out of fear of failure. The risks -- to their business or to their reputations -- just seem too great. Entrepreneurial leaders embrace the risk because they are less focused on mistakes and more focused on getting to their “future quo.” “You have to expect that failures are a natural outgrowth of trying to innovate,” Coopersmith says.
  2. Rehearse for failure. Coopersmith says leaders should anticipate two types of failure: the frequent ones, such as new product launches. And, the rarer, existential failures -- the failures that threaten the foundations of the business.
  3. Recognize failure early. Threats are always better alleviated when discovered early. Coopersmith advocates that leaders set up internal warning mechanisms for signs of failure -- including observations in other sectors, customer feedback processes, or analytics tools -- and monitor these frequently.
  4. React with efficiency and responsibility. Recognize that failure is happening and prepare a plan of action. Events can’t languish for weeks and months, leaders must be prepared to step in and acknowledge a failure -- sometimes publicly -- and the plan to rectify it.
  5. Reflect on the failure. Oftentimes in a reactive mode the instinct is try to fix it and walk away. But Coopersmith advocates that leaders pause and absorb what has happened. “There may be learnings embedded in there that you could incorporate into the way you respond.”
  6. Rebound. Now is when you switch from defense into a proactive strategy and define how to operationalize your next move. Coopersmith says that effective entrepreneurial leaders take an inclusive, rather than punitive approach, asking: “Who was involved, and how can we involve them in a recovery effort in the next steps.”
  7. Remember the failure. Don’t sweep it under the rug or avoid talking about it, especially with your team. Sharing your mistakes and what you learned from them instills trust within your team and can shift a culture of blame to a more entrepreneurial culture of trial and error. And, it ensures that the same mistakes are not made twice.


Learn more about leveraging success from failure in The Start-Up Mindset at UC Berkeley Center for Executive Education, led by co-authors Mark Coopersmith and John Danner of: The Other “F” Word: How Smart Leaders, Teams, and Entrepreneurs Put Failure to Work. 
Hear the rest of Mark’s perspective in his Berkeley Executive Education InFocus podcast.

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