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How To Be More Transparent About Failure

Openness about failure isn’t just a nice addition to your managerial arsenal. For real growth to happen, it’s a necessity.

How To Be More Transparent About Failure
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Recent years have seen senior leaders at huge organizations battling to keep their secrets under wraps. From Wikileaks to the Sony hacking scandal, data and opinions alike (and much else besides) are getting harder to hide.

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Rather than fight that, some companies are moving in the opposite direction. Certain information needs to stay secret, but plenty of it doesn’t. Transparency is one of the watchwords of modern business–whether companies are having it forced on them or are embracing it voluntarily.

Nevertheless, there’s one dimension to transparency that makes even the most proactively open companies flinch: failure. But while it’s understandable that organizations don’t always want to publicize their screw-ups, those are often the things they should be transparent about the most.

Failures Aren’t All Bad

Perhaps the most obvious reason why is because someone else will probably reveal your company’s failures if you don’t do it yourself. But that’s far from the only incentive. The truth is that failures don’t all need to pose huge problems for companies. We all face setbacks. Not everything will go our way. But failures aren’t always the disasters they feel like.

For proof, consider some of the latest data security scandals. Breaches at Home Depot and Target led to brief initial dips in both companies’ stock prices but were followed by huge bounce-backs, with Home Depot seeing a 21% increase in earnings per share after the failure. Target saw its highest recovery in stock price in five years.

Work had to be done to remedy these failures, but in the long run, they weren’t the disasters many companies fear. That’s not to say that those crises didn’t pose real business risks. It’s just that both companies minimized the harm they could have suffered by being frank and communicative about what they were grappling with. As a result, the public perception of failure did neither company any lasting harm.

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Failing Can Make Things Better

In many cases, failures can be the basis for improvement. They draw attention to where things aren’t working right and give us the opportunity to seek out ways to work better. But this only works if you’re open about failures. If those in the organization–from leaders all the way down to front-line workers–are afraid to acknowledge what’s gone wrong, then there’s no way to find out why, or what can be learned from it.

Too many companies are selective about transparency. They’re open about the less risky things and still sweep failures under the rug. Rather than let your latest handful of setbacks set the stage for new opportunities to do better, you’ll be left with a growing pile of unresolved problems–and possibly a disaster in the making.

Openness about failure isn’t just a nice addition to your managerial arsenal. For real growth to happen, it’s a necessity.

Failures Need To Be Discussed

So how can you encourage an open and honest accounting of failure?

As with any tough conversation, context matters. One of the first steps is to create settings that feel safe–environments where people feel free to talk forthrightly about what happened and why, without worrying about repercussions. For many companies, this feels like an enormous leap. But it doesn’t have to be a solemn affair.

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Instead, more informal meetings can help people talk freely. If you’re starting from zero, schedule some away days, dinners, and team socials to build initial trust. But it isn’t enough to do these sorts of things as special occasions. Companies need to discuss mistakes as part of their routine work.

So start discussions around what could’ve been done better in even the most successful projects. As a team leader, it’s important to respond positively to criticism and act on it, showing you’re serious about change. Be open about the moments where you’ve failed. If you hear colleagues back off from expressing their concerns or reservations, encourage them to speak up. But don’t stop leading by example, even if they choose not to. With time, most employees will come around. Culture doesn’t shift overnight.

If you don’t embrace openness, then it’s going to be forced upon you. Transparency is no longer optional, and any failure you’re facing today but not facing up to could be tomorrow’s talking point.

About the author

Mark Lukens is a founding partner of Method3, a global management consulting firm. He has 20-plus years of C-Level experience across multiple sectors including health care, education, government, and talent/human resources.

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