The importance of learning from mistakes in business strategy

Quality management research and practice indicate that successful 21st century organisations need to foster learning cultures, encouraging openness and a willingness to learn from errors and mistakes to develop a positive, strong strategy. Unfortunately, the reality can be often very different…

The issue is exemplified in the political and media debate on the UK National Health Service. The rhetoric and imposed inspection and management systems demands a ‘no mistake culture’ and ‘who do we blame when things go wrong?’ approach, which has a negative effect on strategy, development, staff wellbeing and efficiency. Systems and inspection regimes are created to manage out mistakes and affix blame, but the result is often counter productive, achieving blame and fear cultures which lead to a lowering of standards, a resistance to reporting errors and a lack of openness and trust.


There is failure to recognise that much innovation and many quality services have happened through learning from mistakes – taking risks, trial and error, honesty and openness. Creating glue that didn’t stick very well led to the development of the PostIt note!

Theatre companies are good examples of learning cultures, where debriefing and learning from what didn’t work, or could be done better, is an inbuilt mechanism at the end of a performance. Another example is the military, where debriefing, post operation, is common practice.

Utilising the importance and value of narrative in quality planning, here are four stories – two adapted from Yes to the Mess, one first told to me by my friend Nick Moore, and one taken from personal experience.

Read the examples and then consider and undertake the task at the end of the blog.

‘Is there anything not going well?’

‘When Allan Mulally took over as CEO of Ford Motor Company in 2006 he inherited a company that had lost billions of dollars. To measure progress Mulally asked his vice presidents and functional heads to come to meetings with colour coded reports: green for good, yellow for caution and red for problem areas. At the first meetings, the managers showed up with their operations all coded green until Mulally said “You guys, you know we lost a few billion dollars last year. Is there anything that’s not going well?” With that one of the vice presidents, Mark Fields, spoke up. The Ford Edge, he reported was experiencing technical problems and would not be ready for production and distribution as scheduled. There was silence in the room until Mulally clapped and congratulated Fields. “Mark”, he said, “I really appreciate your clear visibility”.


‘Field’s disclosure and Mulally’s response not only laid bare the difficulties with a key component of Ford’s future but also taught others in the room that it was OK to share errors. In the past, the vice presidents had been required to defend problems and disappointments, so they tended to avoid reporting them. Now they were not going to be punished for making mistakes and the effect was dramatic.  “The next week the entire set of charts were all rainbows,” Fields said later. Mulally agreed “They do not bring their big books anymore because I’m not going to grind them with as many questions as I can to humiliate them”.


In telling this story Frank Barratt comments:


‘What does it mean to live in a team culture in which it is OK to bring your errors forward, to publicly discuss mistakes? The record is very clear: groups that have adapted these practices and leaders who promote them accelerate learning Failure after all is an inevitable part of risk and experimentation indeed it’s often the pathway to discovery, especially in highly experimental and innovative cultures. But the value of tolerating errors extends well to the day-to-day operations of complex systems and even to routine processes. In both instances, the fear of reporting mistakes can lead to failure and sometimes tragedy’


Adapted from Yes to the Mess by Frank Barratt

Learning from Errors

‘Hospitals are a high reliability and high risk environment on which mistakes inevitably happen, mistakes that are sometimes a matter of life and death. In 2000,the Institute of Medicine reported that anywhere from 44,000 to 98,000 people die in USA Hospitals as a result of errors. Mistakes with less dire consequences are, of course, far more extensive in hospitals than most care to admit or want to know. The traditional remedy to guaranteeing patient safety and well being is through the training and performance of doctors and nurses.


However, researchers such as Harvard Business School’s Amy Edmundson have suggested that it is also critical to build organisational cultures that allow people to learn from mistakes. Edmondson – and others – argue that, given the unavoidable failures in complex systems, developing an organisational capacity to learn from these mistakes is a strategic imperative. *


‘For Edmondson the biggest enemy to exploring learning is the pressure to pretend that mistakes did not happen. People need to feel safe enough to talk about mistakes. There needs to be a sense that the team allows people to take interpersonal risks. Do team members respect each other and hold one another in high regard? Do teams feel secure enough so that others will not rebuke, marginalise or penalise those who speak up or challenge common practices or prevailing opinions (see section on the importance of vulnerability) when there is enough psychological safety, people openly confront and discuss errors.


‘When Edmundson was doing research on nursing teams in hospital emergency rooms and operating theatres, she looked at those units with the highest independent ratings in terms of leadership and the health of the organisational culture. The bottom line: the healthiest teams with the strongest teams reported more errors. At first Edmundson assumed it was a mistake in the data. Revisiting it again and again confirmed the findings about the strongest teams. Edmundson explored further and ultimately found that in these teams, leaders expected people to report on and discuss errors, But more importantly, beyond leaders’ expectations let’s appreciate the impact – the actual behaviours of the employees and the benefits to the system.

• The employees did report errors and learned from them

• The actual number of reported errors were higher, but the actual errors were lowered because people learned from each other and were willing to admit and grapple with mistakes, rather than bury them


Adapted from Yes to the Mess by Frank Barratt

Source* A Tucker and A Edmundson: Why Hospitals don’t learn from Failure

I’ve left my wrench on the flight deck

A US aircraft carrier is at sea in the Mediterranean flying aircraft operations. A member of the engineering crew returns to her cabin from the flight deck. On arriving at her cabin she checks the toolkit and she realises that one of her wrenches is somewhere on the flight deck. Her first thought is that this has the potential for a catastrophic incident if the wrench is sucked into an air intake, or a landing aircraft hits it and then has an accident. Immediately she informs the carrier bridge and tells them of the error. All flights off and on the deck are stopped; all flying aircraft are diverted and inch by inch by inch an aircraft deck search initiated until the wrench is found. It is major undertaking.


There are two questions:

Q1. Is the crew member disciplined for putting the ship at risk?

Q2 Is the crew member congratulated for being honest and upfront and commended?

Which one is it?


Email if you want the right answer.


First told by Nick Moore and originally from Managing the unexpected: resilience performance in age of Uncertainty by Karl E. Weick and Kathleen M. Sutcliffe 

Note: Did you note how much was resolved by human communication and skills, encouragement of honesty and transparency and taking responsibility for the needs of the organisation and the service it provides? Quality organisations need to have cultures that learn from errors, promote openness and honesty as core activities. The OD philosophy Appreciative Inquiry can provide a positive and strength focused framework to encourage learning from mistakes. A great question to help this is ‘what do we need to do differently?

The last story is one from personal experience. It is about how paper systems can mask reality and not providing real information for organisation need.

Being honest with the ‘traffic lights’ 

Recently I’ve finished a long piece of work with a public sector organisation, which managed its performance and project delivery through a traffic light system, with a quarterly review report submitted to board. Red denoted no progress, amber some progress and green for completion. A few months prior to my leaving, a different manager was given responsibility for performance review. I’d worked with this officer for a number of months on the company strategic plan previously, and he was keen on using an Appreciative Inquiry based focus to performance review. Discussing the traffic light system, it became clear that it wasn’t working and more importantly not giving the board an honest and accurate view. Reflecting on the reasons the emergent views were:


• There was a culture of hiding behind a heavy use of amber and an unwillingness to share any major challenges, external factors or resource issues

• Many projects seem to either stay in amber or go straight to green

• Attendance at review meetings were at best limited, not very productive and often very negative


Following discussion a different format was created where people shared what was working well, examples of success, the challenges encountered and how colleagues could collaborate more to meet team and individuals’ needs. To help foster collaboration and shared responsibility at each meeting a corporate issue or a policy and operational matter was presented and discussed.


Under the new arrangement and in just two meetings a number of changes were noticeable:

• Attendance had gone up with all teams represented

• Feedback that the meetings were creating a useful working environment with more effective collaboration

• Much more honesty and openness about the barriers and challenges

• Reporting back both progress and the barriers to progress to the board were more accurate

• Higher levels of collaboration and better cross organisation communication

• Better target achievements

• Beginnings of a discussion on creating and designing better feed back system than traffic lights


Having read the four examples reflect and think about what are the key learning points. Then consider your own practice what do you need to do and encourage others to do differently? How do you learn from errors and mistakes? In what ways can you foster openness and transparency?

Tim Slack