The Study of Failures

The Study of Failures

The Study of Failures

Mao Zedong gives this wise advice as a means to systematically analyze failures made in the past. However, in most firms mistakes made in the past are seldom analyzed systematically. People like to forget them as soon as possible, thereby throwing away an opportunity to learn from their failures. In business firms mistakes are seldom well documented while in the military world every historical battle is well documented and meticulously studied. Failure (or problem) analysis provides the firm with valuable learning experiences. Its aim is to gain an insight into what circumstances made certain undertakings fail and how to avoid these in the future. Don't fall into the same trap twice! Furthermore, such an analysis often provides inputs for new innovative solutions. For instance by analyzing his defeats against the Nationalist Chinese forces Mao Zedong arrived at the formulation of his successful Guerrilla doctrine.

Questions which could be asked are:

What kinds of frictions have been experienced during the execution of a project/action or campaign?

What kind of communication mistakes occurred?

What kind of logistical problems could be observed?

To what extent have we miscalculated the reaction of the competition?

Why have the advantages of our product/or service not been appreciated by our customers/consumers?

The analysis of mistakes made in the past is akin to Problem Solving and in business there was a necessity to approach problem solving in a systematic manner. Two Americans, Kepner & Tregoe, understanding this demand developed a very effective procedure to analyze mistakes and problems. We believe that management should instil such methods systematically into their organization.

However from the field of administrative behaviour it is known that managers very well are able to remember how they have solved specific problems in the past, but seldom are able to recall why they have solved that problem in that specific way. As a result in most cases managers are not able to identify what assumptions were underlying the then success, and subsequently are not able to test whether these assumptions hold in a new situation.

Also because managers have to economize on their decision making, managers are prone to apply rule of thumb wisdom, even in strategic matters. We expect that the organization and its management are mentally able to objectively assimilate the failures made. In that case failure analysis will certainly lead to better plans.

The man who can't make a mistake, can't make anything.

- Abraham Lincoln (1809-1865)

Your most unhappy customers are your greatest source of learning.

- Bill Gates, founder of Microsoft

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