Perspectives on Failure: Your Role as a Manager

how to respond to failure

Failure is inevitable in the business world. No matter what, you’re going to encounter both isolated and widespread failure regularly throughout your career. That’s just the harsh reality of modern business. As a manager, it’s important that you’re prepared for these shortcomings and know how to respond in situations that call for quick responses and calculated decision-making.

It may sound cliché, but it’s not the failures that define you – it’s how you respond in the face of these failures. Do you know how to analyze failure so that your business is stronger and healthier for it on the back end?

How to Respond to Failure

The trickiest thing about failure in business is that it’s not always something you can directly control (or even influence). In many cases, external factors determine positive or negative results; it’s up to you to respond in the appropriate manner.

The orange juice market is a relevant example, especially in the wake of the devastating hurricanes that have fallen on American soil this year. All it takes is a natural disaster or environmental issue in the state of Florida – such as a hurricane, tropical storm, or freeze – and orange juice can be seriously affected. Nearly 100 percent of the U.S. orange crop comes from Florida and damage to trees (which take 15 years to reach maturity) can have a massive impact on prices and production.

A manager at an orange farm in Florida can’t prevent natural disasters from occurring, but he can prepare for and respond accordingly by hedging risk in the form of orange juice futures. As a manager at a steel production facility (or any other type of company), you might not be able to avoid droughts in the market. You can, however, circumvent avoidable failures by planning for predicable market swings ahead of time.

As entrepreneur Harriet Genever points out, there are three basic types of failure in the business world:

  • Preventable failures. These are the failures that are most frustrating. If you had approached the underlying situation in the right manner, the failure would never have materialized. However, there is a silver lining here. Unlike other failures, you can have some control over these and prevent them.
  • Failures in complex systems. The second category refers to failures that occur when many different factors are involved. As Genever explains, “These are the systematic failures that generally begin as multiple, small failures that, when left unfixed, turn into a system-wide problem. These small failures aren’t bad in and of themselves—they are simply a reality in a complex system. Dealing with them promptly is what prevents bigger failures from happening.”
  • Intelligent failures. The final category refers to “good” failures in which you learn something that can be applied and used in the future to push your organization forward. Genever uses the example of Thomas Edison’s trial and error approach that led to the development of the light bulb.

From a managerial perspective, you must be prepared to face all three types of failure. However, there’s a big difference between being prepared for failure and preparing to fail. The reason you spend so much time understanding failure is so that you’ll be able to avoid the preventable ones and appropriately respond to the issues that are outside of your scope of control.

While every situation is unique, there is one common underlying factor in almost every case of preventable failure: ineffective communication. According to a study conducted by the Project Management Institute (PMI), one-third of all project failures are rooted in poor communication. This makes your job as a manager pretty clear. You need to improve communication and prepare for failure like your job depends on it – because it does!