The March 22 issue of Time has a thoughtful article on failure by Megan McArdle, the business and economics editor of the Atlantic. The catchy subtitle reveals the direction of the article: Making mistakes is a great American Freedom.
Although McArdle looks at economics and politics through the window of business failure, the setup lends itself to a discussion of personal failure as well.
But first, McArdle’s perspective. McArdle emphasizes her belief that we should be searching for the lessons of this financial crisis, but “we can’t because we’re too busy searching for bad guys.” As she argues rather elegantly, America gives its citizens the room to fail—and if they don’t succeed, to try, try again. That, she implies, is made possible by bankruptcy, one of the pillars of this country’s growth.
The opportunity to fail in business differs significantly in other cultures, and those differences impact business and entrepreneurialism. McArdle points to important statistics to support her perspective. Somewhere between 65% and 75% of all Americans say that they have considered starting their own business. And plenty of Americans have started their own business in this disastrous recession.
In contrast, only 40% of Europeans say they’ve considered starting their own business. To a high degree the willingness to start one’s own business has to do with the legal and personal attitudes toward failure. When startups shut down and fail, America stands ready with corporate and personal bankruptcy systems, among the most generous in the world. As McArdle notes, While the E.U. publishes documents on overcoming the stigma of business failure, executives in Silicon Valley proudly make their bygone start-ups the centerpieces of their resumes.
But pick up any paper or watch the tube and you’ll find that many Americans have changed their attitudes toward failure. Instead of trying to identify and understand the lessons of this crisis they’re busy searching for the bad guys. Watch a legislative hearing and you won’t find committee members trying to learn the lessons from this failure and developing new policy, you’ll see them beating up on bankers, the Fed and the Treasury. The truth (about failure) may set you free, but first it may infuriate you. I suspect that’s what is happening.
But, the real secret of success in any context is not about beating up on our failures or doing our damndest to avoid them, but learning from them. Making mistakes, as McArdle emphasizes, is a great American freedom.
For years some of our best scholars have been studying how organizations and people learn. They have come to the conclusion that failure is crucial to the process of learning. The real secret of success, then, is to learn from the past.
Although most of us would like to believe that failure can be avoided, the fact is that we’ll fail far more times than we’ll succeed. Furthermore, we’d like to believe that when we do fail, we learn from our failure. But far more often than not, we don’t learn from failure. Experience offers only the raw data, the raw ingredients for learning. It provides information about outcomes. It does not guarantee learning.
Research from the Center for Creative Leadership sorts between successful leaders and those not so successful. They found that successful leaders were better at the following:
- Routinely gathering feedback on personal performance—including failure.
- Interpreting the information they received in constructive ways.
- Using the information to adjust personal behavior and improve.
FYI: Learning is not at all automatic. It requires a thorough and systematic examination of our failures. We all have made our path to expertise on the stepping-stones of more failure than we care to remember.