The Difference Between Good And Bad Organisations

Both good and bad organisations make mistakes, but the good ones are better at learning from them.

Risk is still a toxic word across much of the social sector.

It’s often still seen as something to avoid at all costs rather than embrace. In less complicated times it was the right thing to do. Everyone risk assessed each other and every activity. We told people to follow the rules whatever the situation. Customer experience , if such a thing even existed, was standardised rather than personalised.

But we don’t live in those times anymore.

Taking considered risks has to become part of our everyday roles. And with risk inevitably comes failure.

Innovation only thrives in a forgiving organisation. And if failure is the engine for innovation , our challenge is to make our organisations more forgiving.

This week I was involved in what turned into a rather fractious Twitter thread. I’m not going to link to it here as I like to assume people’s good intentions and it is vital that we challenge one another. Plus – I’m only using this by way of example. But here’s the background:

I wrote a piece in Inside Housing condemning the stigmatisation of poor people. A couple of commentators pointed out that the organisation I work for – Bromford – were complicit in that stigmatisation in a project we began 10 years ago. To add to that I was alleged to have personally contributed to that stigmatisation by writing pieces supportive of ‘poverty porn’. And the ‘gotcha’ moment is that despite my rhetoric, Bromford have still been highlighted for service failure by ITV News.

In a nutshell. Organisation tries to do something innovative – messes up. Refines it and succeeds. Another part of an organisation messes up. Holds hands up and apologises. Attempts to put right.

Now – let’s be clear. I’m not for a minute excusing any service failure, organisations simply shouldn’t mess up in such a way. And it is absolutely correct that people like me with a platform are called out for BS. It’s how we learn. The issue is rather how we forgive organisations and accept the nuances that organisations can do good and bad things – often at the same time.

Volkswagen engineers did develop a defeat device to cheat emissions tests but my next car is probably a VW.

Some Boeing employees deliberately concealed safety results from regulators but I’m almost certain to fly in one of their planes in future.

Oxfam are facing allegations of sexual misconduct and bullying but I’m not going to cancel any donations to aid agencies just yet.

The good news for companies is that they can gain customer and stakeholder forgiveness, depending on their culture and approach to forging and enhancing relationships. Customers will forgive you if you have made consistent and genuine efforts to build trust, and ensure efficient service recovery.

However, there is growing polarisation in our public discourse. People, and companies, are either good or bad.

Brexiteers: bad. Remainers: good. Trump voters: bad. Mask wearers: good. Amazon: Bad. NHS: Good. And so on.

Of course, none of these things are so simplistic – but it suits the media landscape as it divides people into tribes and generates a lot of clicks.

But none of this is good for innovation or for transparency.

In the social era many of our organisations are in the difficult transition of becoming human again. We’ve grown up broadcasting to people rather than engaging in meaningful conversations in public. Transparency means having these conversations and starting owning up to mistakes and admitting we sometimes fail. We are human. We mess up more often than we care to admit.

So with this new transparency has to come forgiveness. If organisations are to admit failure there has to be a maturing of public debate. This maturing of debate will only continue though if organisations are brave enough to take part in it.

  • We need to establish a new relationship with the public, and each other, where humility and failure is seen as a positive attribute rather than a weakness. 
  • We need to demonstrate that we are getting better at learning from failure, not repeating it. The true test of customer service is not when things are going right – but rather when things go wrong.
  • We don’t need to celebrate failure – but we do need to become more comfortable with it. It’s normal. 

Organisations are ultimately just a bunch of people – overwhelmingly good with a few bad. There’s no organisation on earth that is 100% ideologically pure. Organisations can do good things AND bad things at the same time. Just like people.

There’s a fallout to this line of thinking that we must be perfect —as truly improving our society becomes even more difficult work.

In reality, both ‘mostly good’ and ‘mostly bad’ organisations make mistakes, but the mostly good ones are better at learning from them.


Image by Tumisu from Pixabay

How To Make Decisions In A World Of Uncertainty When Not Knowing Or Being Sure Of Anything Is The Only Answer We Have (TLDR: Get comfortable with failure..)

In a high stakes environment , where people will die whatever you do next, nobody wants to talk about failure. For companies large and small, to make progress in complex situations means re-evaluating our relationship with the F Word.

Since the pandemic started, we have all spent a greater share of our time confronting difficult questions. Most of those questions are not immediately answerable. It hasn’t even been a year since the virus was confirmed so being able to predict its long term effects on our mental health, our relationships, our behaviours , even our future, is nigh on impossible.

How do we know if a trend is caused by coronavirus, or if it would have happened anyway? 

The typical approach of many companies will be far too slow to keep up. Postponing decisions to wait for more information might make sense during more normal times, but postnormal , surrounded by imperfect and conflicting information, waiting to decide is a decision in itself.

The only way to really make decisions and to forge ahead in periods of radical uncertainty – where environments may change dynamically and independently of the problem solvers’ actions – is to make headway iteratively.

Unfortunately that is the not message we are getting from many of our leaders, nationally and internationally. Strategies are being deployed at short notice against a background of emerging evidence, with advice to the public confusing and changeable seemingly on a daily basis.

In a high stakes environment , where people will die whatever you do next, nobody wants to talk about failure. For companies large and small, to make progress in complex situations means re-evaluating our relationship with the F Word.

Notwithstanding the oft heard corporate mantra about “risk-taking organisations,” few people or organisations are comfortable being associated with a failure. It usually appears as a ‘tell us about a time’ question at job interviews , but the savvy candidate will avoid providing any example of a genuine **** up, and offer a ‘valuable lesson learned’ story instead.

As Phil Murphy recently said “We all fail regularly though don’t we, in various small ways? Is there an unhealthy obsession by organisations seeking to portray faultlessness?”

In an increasingly complex world, where experimentation is called for, not us can remain faultless. There is very little informed debate or discussion about this. Failure is a lot more common in highly uncertain environments than it is in better-understood situations, so why do we not publicly accept this?

The benefits of learning from failure is incontrovertible but we know that organisations that do it well are rare.  Part of this is due to culture and our refusal to let go of the heroic leadership model. Failure is seen as bad, and it sometimes is bad. Very bad. But it is sometimes inevitable, and sometimes even good. 

Building our capacity for intelligent failure

IBM’s Thomas Watson, Sr. said, “the fastest way to succeed is to double your failure rate.” So how can organisations safeguard their existing values and still create a safe failure environment?

The answer is: practice getting better at it.

Rather than something that eludes all but the most creative, intelligent failure is a learned skill that everyone can practice and strengthen.

Change the definition:

People see failure as a bad thing as it has been drummed into us through childhood and the corporate machinery. It has come to mean letting people down. We need to redefine failure as a part of a journey of discovery – in which you’ll learn the possibilities for you and your organisation.

To maintain a psychologically safe environment that celebrates intelligent failure, those who come forward should be rewarded, not punished.

See it as an investment:

This seems counter intuitive but there is a strong economic argument for failing more often.  As an example let’s say it takes 6 months and £250,000 to take a product or service from idea to launch. At best you’ll get two cycles in a year.

However, if you can do a complete cycle of learning in a week for £2000,  you can get 52 cycles in a year at about half the cost. Many of those cycles of learning will fail but will have less risk and negative impact than your latest big initiative. In the words of Andrew Stanton – “be wrong as fast as you can.”

Have a scientific approach:

Embracing failure does not mean having a lax approach or work environment. Failure can co-exist with high performance standards. Have a hypothesis and test it. Involve your data geeks and people who have no vested interests in seeing the idea succeed. If people start getting excited you have a discovery. If not – people will still feel it was worthwhile learning – but quickly move on to the next idea.

Capture the learning:

Failure is only bad if we are doomed to repeat it. Breaking our organisations out of cyclical failure is a huge challenge. Chris Bolton has asked if there’s a need for a Museum of Failed Products within public services. He’s undoubtedly right – the ‘corporate memory’ is often unreliable.

Don’t confuse this though with “We tried that before and it didn’t work.”  Just because things don’t work doesn’t mean you shouldn’t dust them down and give them another run out on a rainy day. Sometimes the timing just isn’t right.

Our organisations are heavily and successfully defended against failure

The high consequences of failure (and perceived consequences) lead over time to the construction of multiple layers of defence against failure. These include a variety policies and procedures, risk assessments, work rules, and team training all designed to tell us that failure is bad. These series of shields need to be balanced if you have any hope of legitimising failure.

  • Our future is best explored through a series of experiments rather than a one shot strategy.
  • These experiments should be carefully planned, so that when things go wrong we know why
  • They are by nature uncertain, so the outcome cannot be known ahead of time
  • They are modest in scale, so that a company catastrophe does not result
  • What is learned should be stored in the organisations memory and shared freely and widely

Ultimately intelligent failure is a learned skill that everyone can practice and strengthen.

If we can approach uncertain decisions as experiments and adopt the idea of intelligently failing, so much more can be learned.

A world where we can all admit we don’t have the answers but are committed to exploring them together, by trying things out rather than through politics or ideology, sounds an infinitely nicer place.


Feeling like a failure? Not interested in playing local lockdown lottery? Then make a lunch date with me and Ian Wright for our contribution to Digileaders week next Tuesday 13th October at 12pm where we explore real life failure experiences and why so many innovation initiatives don’t go to plan.

You can book your place here.

What Coronavirus Tells Us About Risk

As I sit down to write this post I’ve just received an email from a weekly design blog I subscribe to.

This edition is titled , alarmingly, ‘Pandemic Prep’.

It begins “We are interrupting our regularly scheduled newsletter format and rhythm to advise our clients and subscribers to prepare for the possible impacts of the coronavirus”.

Now I don’t know about you, but when seeking advice about pandemics I might look to the NHS or the World Health Organisation but I’m not sure service designers, innovation labs or bloggers would be my go-to source.

At the time of writing COVID-19 has led to approximately 3,000 deaths reported worldwide.

Deaths from regular flu on the other hand are somewhere between 291,000 to 646,000 deaths – every year.

Coronavirus is extremely serious and could yet reach pandemic levels –  but it is also a  good illustration of how we can overestimate personal risk. UPDATE 4/3/20: The virus has killed about 3.4% of confirmed cases globally. The seasonal flu’s fatality rate is below 1%

That said , why are people worrying about receiving post from asian countries , or whether you can catch the virus from beer, or even choosing not to order food from chinese takeaways?

According to Dr Ann Bostrom,  the mind has its own – entirely non-evidenced – ways of measuring danger. And the coronavirus hits nearly every cognitive trigger we have.

Paul Slovic, a University of Oregon psychologist who helped pioneer modern risk psychology, speaking to The New York Times, helps explain what is going on in our minds here.

When we encounter a potential risk, our brains do a quick search for past experiences with it. If it can easily pull up multiple alarming memories, then our brain concludes the danger is high. However it often fails to assess whether those memories are truly representative.

“A classic example is airplane crashes. If two happen in quick succession, flying suddenly feels scarier — even if your conscious mind knows that those crashes are a statistical aberration with little bearing on the safety of your next flight. But if you then take a few flights and nothing goes wrong, your brain will most likely start telling you again that flying is safe.”

When it comes to the coronavirus, Dr. Slovic says, it’s as if people are experiencing one report after another of planes crashing.

This week we’ve launched the new Bromford Lab Podcast and in the first edition we interview Vicky Holloway and Mitch Harrington exploring the relationship between risk management and innovation – and our propensity to sometimes see risk in the wrong places.

Many of our organisations, we know, are risk averse and constrain innovation. The culture is superbly designed to repel anything new or mysterious.

There are two main reasons for why we over emphasise risk:

We are scared of making mistakes

Failure is rarely promoted or even talked about in organisations. This can breed a culture where there is a fear of failure.

Existing in a culture like this will promote risk aversion as once colleagues are fearful about something they will tend to overestimate the likelihood of things going wrong. Research show that fearful individuals overestimate the danger associated with their feared objects or situations.

In the same way as my fear of spiders leads me to overestimate the ability for a spider to harm me, an organisation whose biggest fear is negative media attention will tend to overestimate the reputational damage of trying out a new service or project.

Successful innovation however requires us to fail more often, and to get better at how we fail.

Arguably it’s not fear of failure we need to tackle but fear itself. How does fear manifest itself where you work? What are you frightened of and what is it preventing you from doing?

No-one ever gets fired for exaggerating

The second reason organisations can overestimate risk is there are few negative consequences for estimating risk too highly.

Underestimating the risk of something bad happening has seen organisations go under and many people lose their jobs, but no-one has ever been sacked for over-estimation.

In 2002 , the Guardian predicted that the world would face famine in just 10 years , and a few years later the UK Prime Minister went a step further and said we had only 50 days to save the planet.

Arguably these are just well meaning attempts at highlighting a serious problem that also illustrates how hopeless we are at predicting the future. However a climate of fear is never a good climate for clear eyed problem definition.

This is why fear of failure should not go unchallenged, as it ultimately becomes debilitating and either stops you innovating or leads you to make bad choices.

As Vicky says in our podcastwe are all risk managers and generally we do it very well. We manage risk everyday in our personal lives and we largely make the right choices.

We need to look for risk in the right places and make intelligent assumptions, constantly challenging ourselves to seek out new experiences and solve problems.

The future requires us to be cautious , yes, but also to be a lot less fearful.


 

Labcast , the new podcast from Bromford Lab , will feature special guests discussing the innovation and design challenges of our day, the big ideas and the bad ideas. 

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It’s available now. 

Subscribe on Spotify 

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Featured Photo by Hello I’m Nik 🍌 on Unsplash

Is the social sector really getting better at learning from failure?

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Guest post with Shirley Ayres , Chris Bolton and Roxanne Persaud

Innovation in the digital sphere can be complex and risky and there are not sufficient opportunities to share learning from failure. One year on from the Practical Strategies For Learning From Failure Workshops we asked the organising team:

Is the social sector getting better at learning from failure?

Paul:

I see few examples of organisations openly sharing where things haven’t gone as planned.

There’s a fascinating contradiction in behaviour. Whilst there are virtually no leaders who would argue against the importance of failure as a source of learning, our actions show a preoccupation with sharing success.

This cultural bias towards success runs deep. Projects are largely funded on the basis that they will all work – something that we all know to be entirely false.

Within organisations we still reward and promote based on results and past performance targets- not experimentation and deviation.

Destigmatising failure and capturing the learning will happen by organisations taking overt action rather than through inspirational leadership quotes shared happily on Twitter.

It will take establishing new teams and protocols – breaking the chains of targets with perverse incentives to guarantee “success”.

If the social sector is getting better at learning from failure – it’s doing so behind closed doors.

Roxanne:

Acknowledging failure is a risky endeavour which has been unhelpfully constrained by risk management processes.  

The formula used by public sector and business leaders is simple: admit what went wrong, apologise and move on with a promise to learn lessons.  Unfortunately this usually happens in the face of mistakes which are too obvious to ignore.  Dealing with this kind of crisis in public is more likely to traumatise a team than support the kind of reflective learning we introduced in #LFFdigital.

Another failure management process which seems easier to learn from is low risk – ‘fail fast, cheap, small’.  The uncomfortable implication is that we can never get things right enough in the first place. Failing fast requires a shift in the way we do things, threatens our credibility and our own sense of ever being able to do a really good job.

Perhaps we are not seeing an open culture of learning from failure when this is a frightening prospect for even the best social sector organisations.  

Shirley:

What is changing are public expectations of more openness, transparency and accountability in the social sector. What may have been hidden in a report a few years ago is much more likely to be subject to scrutiny and comment through  social media. Trust in organisations whose stated mission is social good can be seriously damaged when there is a reluctance to admit they have not achieved what they set out to do.       

Whilst there seems to be consensus about the need to share learning from failure many organisations are working in a competitive funding environment which does not encourage this to happen.

Funders and commissioners have an important role in sharing the learning and also quantifying the real costs of failure in terms of missed opportunities, bad investments and continuing to make the same mistakes.  

It is time to use the digital tools now available to provide real time data and analysis about whether projects have achieved their anticipated and desired outcomes and impact.

Chris:

Moving from a long standing public service culture of not dealing failure as an inevitable consequence of working in complex situations, is a huge shift in human behaviour.

Pervasive ‘social practice’ is generally one of; minimise the risk and ‘don’t talk about it’.

We behave to fit in with social practices in an unconscious, automatic manner. Shifting the burden of dealing with failure off the individual and making it part of the social practice is something you could argue the aircraft industry has achieved.

Over the last 18 months however, I’ve observed more people talking about failure as something we should recognise and work with. While this is a long way of a large scale behaviour change it is helpful in changing the ‘meaning’ around failure. If the ‘meaning’ (the unwritten rules, social taboos etc) start to shift, there is a chance we can start to change the ‘social practice’ around failure.


Are we getting better at learning from failure?

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