Are you squandering your intelligent failures?

Rita McGrath
6 min readJun 27, 2023

Just back from an amazing week spent with thinkers, do-ers and executives considering culture at Novartis. Amy Edmondson, my dear friend, was there and both of us remain stunned that people are still confused about failure, after we have spent literally decades writing about it. For the record — there are intelligent failures, stupid failures and complex systems failures, all of which have different implications.

I should mention — we’re not dinosaurs, even though there is one in the background!

Intelligent failures — Here’s what I wrote in Harvard Business Review in — ahem — 2010!

Despite widespread recognition that challenging times place unpredictable demands on people and businesses, I still run across many managers who would prefer to avoid the logical conclusion that stems from this: failure is a lot more common in highly uncertain environments than it is in better-understood situations. Instead of learning from failures, many executives seek to keep them hidden or to pretend that they were all part of a master plan and no big deal. To those executives, let me argue that an extraordinarily valuable corporate resource is being wasted if learning from failures is inhibited.

Naturally, to an executive raised on the concept of “management by exception,” any failure at all seems intolerable. This world view is reinforced by the widespread adoption of various quality techniques, for instance, six sigma, in which the goal is to stamp out variations (by definition, failures) in the pursuit of quality. Managers are supposed to be right, aren’t they? And having the right answer is just as valuable in management as it was in grade school, right?

Perhaps not.

For many years, scholars such as my esteemed colleague Sim Sitkin of Duke (see his article “Learning through failure: The strategy of small losses,” ) have been studying how organizations learn, and they have come to the conclusion that intelligent failures are crucial to the process of organizational learning and sense-making. Failures show you where your assumptions are wrong. Failures demonstrate where future investment would be wasted. And failures can help you identify those among your team with the mettle…

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Rita McGrath

Columbia Business School Professor. Thinkers50 top 10 & #1 in strategy. Bestselling author of The End of Competitive Advantage & Seeing Around Corners.