Success by Failure: Encouraging Boldness in Your Employees

At most companies, policies and processes are put in place to deal with employees who exhibit sloppy, unprofessional, or irresponsible behavior. But if you avoid or move these people out, you don’t need so many rules. If you build an organization made up of high performers, you can eliminate most controls. The denser the talent, the greater the freedom you can offer. Do you want your leaders and employees to be more successful? Encourage them to fail more.

In his book, No Rules Rules, Netflix Cofounder Reed Hastings shares how in his first business, Pure Software, he found out the hard way about having too much structure and too many policies: “Policies and control processes became so foundational to our work that those who were great at coloring within the lines were promoted, while many creative mavericks felt stifled and went to work elsewhere.”

This was followed by a slowing of innovation over time. Though efficiency had increased, creativity had dropped. Hastings points out that, as industries shift, most firms fail to adapt. He further reflects on the tendencies of those in leadership positions: “To survive, we needed to change. But we had selected and conditioned our employees to follow process, not to think freshly or shift fast.” What they needed was less transactional leadership and more transformational leadership behavior.

“With my next company, Netflix, I hoped to promote flexibility, employee freedom, and innovation, instead of error prevention and rule adherence. At the same time, I understood that as a company grows, if you don’t manage it with policies or control processes, the organization is likely to descend into chaos,” he said. “If you give employees more freedom instead of developing processes to prevent them from exercising their own judgment, they will make better decisions, and it’s easier to hold them accountable.”

Flexibility and freedom

Successful leaders know that the most successful teams evolve when each employees is encouraged to have a strong sense of ownership for their role. That ownership runs parallel with a sense of commitment to the entire organization.

Businesses have to stop treating their employees like children. Effective leadership is about helping people reach their potential in performance, not managing them away from breaking policy or screwing up. Superior employee experience is a critical factor for current employees and job seekers alike. When leaders get this right, it forms the bedrock for best-in-class customer experiences. High performers need innovation, innovators need autonomy, and everyone needs intellectual stimulation.

Don’t let one poor employee ruin your organization’s freedom and flexibility. Process kills organizational flexibility. Fear kills creativity and innovation. Employee freedom means they can take a lot of risks and sometimes fail. Risk-taking breeds innovation. Take a good look at your current leadership style and consider adopting the mindset of failure-tolerant leaders.

My advice: Don’t punish 98% of your team members because you are afraid of what 2% might do.

Bezos: Encourage boldness

“One of my jobs [as the leader of Amazon] is to encourage people to be bold. It’s incredibly hard. Experiments are, by their very nature, prone to failure,” said Jeff Bezos, Amazon’s founder and role model to many effective leaders. He shared his thoughts on the value of failure in an interview with Business Insider some years back.

While much has been made over the years about his business failures, Bezos says he’s made billions of dollars of failures at Amazon. “Literally billions of dollars of failures. You might remember Pets.com or Kosmo.com. It was like getting a root canal with no anesthesia. None of those things are fun. But they also don’t matter,” he said in the interview.

What does matter, he says, is to keep trying new ideas and learn from his failures. “Companies that don’t continue to experiment, companies that don’t embrace failure, they eventually get in a desperate position where the only thing they can do is a Hail Mary bet at the very end of their corporate existence. Whereas companies that are making bets all along, even big bets, but not bet-the-company bets, prevail,” said Bezos.

Reflecting on his own failures and successes at Amazon, Bezos said, “A few big successes compensate for dozens and dozens of things that didn’t work. Bold bets—Amazon Web Services, Kindle, Amazon Prime, our third-party seller business—all of those things are examples of bold bets that did work, and they pay for a lot of experiments.”

Effective change leaders factor in some failures on the road to their strategic goals. Be the type of leader who follows Tom Peters’ advice: “I would rather reward spectacular failures than mediocre accomplishments.”

John R. DiJulius III, author of The Customer Service Revolution, is president of The DiJulius Group, a customer service consulting firm that works with companies including Starbucks, Chick-fil-A, Ritz-Carlton, Nestle, PwC, Lexus, and many more. Contact him at 216-839-1430 or info@thedijuliusgroup.com.