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The conventional wisdom isn’t quite right: Failure is not a great teacher. It’s how we reflect on failure that instructs.

It’s something I learned firsthand—repeatedly—while launching NextArrow, my own leadership-training company. Anyone who’s ever started a company knows that early on, even when things are going well, the mistakes can feel like they come fast and furious: My colleagues and I were too eager to say yes to every opportunity even when it wasn’t a good match.We hired people based on their impressive qualifications rather than value fit. We didn’t have a mechanism in place to alert us when clients hadn’t signed a contract before we delivered our services.

For a while, we tried to simply power through every mistake, resolving each time to simply hustle hard enough to negate it. An employee left once it was clear they weren’t a value fit? We’d just hire the next person even more quickly. Maybe we’d make a few small tweaks to the interview process. But inevitably, it wouldn’t be long before we’d run into another problem.

Until we had a moment of reckoning: Mistakes were piling up, but there was no room in the way we worked to reflect on them—and over time, it became clear to me that my team was missing a valuable opportunity. We needed norms, values, rituals that allowed us to slow down and spend some time with our failures.

It may have been one of the most important realizations I’ve had since NextArrow was founded.

Right now more than ever, complexity, change, and uncertainty are baked into the way we work. Over the last two and half years, organizations have had to create entirely new business models and shift operations on a massive scale. Many of them, even the successful ones, have failed in some capacity. It’s up to a company’s leaders not to avoid those failures—a futile exercise at any organization—but to make sure those failures are stepping stones to learning and growth.

It’s a goal that’s easier said than achieved when admitting to failure goes against our basic human wiring. Research has shown just how psychologically devastating it can be, triggering shame and eroding self-esteem. It’s why most people attribute their success to their efforts, and their failure to circumstances, a bias, known as the fundamental attribution error.

Most organizations, meanwhile, are hyper-focused on end results, have a low tolerance for experimentation, and provide little time for reflection, all of which create an environment incompatible with learning. Here’s how to make sure that’s not the case for yours.

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First, do a failure audit.

Most leaders have unexamined assumptions about failure that impact the way they work. To bring those biases to light, take a few minutes to conduct what I like to call a failure audit. Think about the last few meaningful failures on your team. How did you handle each one? With the benefit of hindsight, what could you have done better?

For example:

  • What happened: When Jane failed to meet her deadline, I said, “I’m very unhappy with that. Let’s make sure it doesn’t happen again.”
  • What could’ve happened: I used our one-on-onetime to ask Jane about what happened. Through our conversation, it became clear that she was working on several projects and didn’t know which one to prioritize, causing things to fall through the cracks. This led us to implement a color-coded system on our team to signal what was urgent and what could take a backseat.

Second, ask for feedback.

Make it a regular habit to address your blind spots by encouraging your colleagues to share feedback in one-on-ones or team meetings. Research shows that psychological safety increases in the long term when leaders are open about their own developmental areas.

If it feels uncomfortable at first, you could preface with a line like, “As part of my own development, I’m trying to get better at managing mistakes and failures.” Then ask about where you have room to grow, as well as what you could be doing to better help your team learn from mistakes.

Third, coin a failure philosophy.

This is a memorable phrase that people can easily understand and remember.

At NextArrow, for example, our values are based on songs we love. As a company that employs more than one Britney fan, we’ve adopted “Oops!…I Did It Again” as shorthand to communicate a mistake on Slack and in meetings, and as a prompt to remind one another to stretch ourselves.

Here are some examples of failure philosophies others have coined:

Whatever phrase you select, make it something that feels authentic and meaningful to your team.

Fourth, weave your failure philosophy into the way you work.

De-stigmatizing failure means treating it as a normal and, at times, healthy consequence of working in a complex environment.

In interviews, ask questions like: “How have you handled mistakes in the past?” and “What are your best failures?”

While onboarding employees, say: “Here’s how we approach mistakes and failures on our team.” (NASA shares a compendium called “Flight Rules,” which is a collection of missteps, disasters, and lessons learned).

In team meetings, say: “I know we didn’t get our desired output, but let’s see what we can learn from the inputs.”

Creating rituals around your failure philosophy—a practice adopted by some of the world’s most innovative teams—also helps make failure feel less lonely and more instructive. Some examples:

  • Gray and P&G both provide annual “Heroic Failure” awards to the people and teams who took the greatest ‘intelligent’ risk at the company.
  • At X Development, LLC (formerly Google X) often gives a failure bonus when a team kills their own project for good reason.
  • Pharmaceutical giant Eli Lilly used to throw “failure parties” to commemorate excellent scientific work that led to a dead end.

Finally, shine a light on your own failures. Slogans and rituals alone won’t help a team whose leader says one thing and does another. As Navy Seal Team 6 Commander Dave Cooper put it: “The most important words a leader can say are, ‘I screwed that up.’”

When you have the courage to say those words freely, the question isn’t “Will we fail?,” but rather, “How will we learn from our failures?”

Bio: Roi Ben-Yehuda is the Founder and CEO of NextArrow, an organization dedicated to helping innovative teams and leaders develop courage to achieve excellence. His work has been published in the Harvard Business Review, Fast Company, Training Industry, and The Daily Beast. Roi previously taught courses and seminars on negotiation and conflict management at Columbia University, Princeton University, and John Jay College of Criminal Justice. You can follow him on LinkedIn here.

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