Analyzing Failure on Projects

Success and failure are integral to individual and corporate growth. Success is relatively easy to handle. Few individuals or companies fail to appreciate and gain confidence from successes. On the other hand, we are not usually equipped to deal with failures.

One reason is that we tend to get defensive as an immediate response to failure. For example, individuals involved in an unsuccessful project first attempt to justify their intentions and actions, ignoring the reasons for failure. This is precisely why many companies and individuals repeat similar mistakes in regular intervals.

Failure can be an important source of learning. An analysis of the causes of the project failure can constructively provide the connection between ill-fated actions and project results. Companies who shun such healthy discussions often repeat the mistakes. Most often they make allegations against others sometimes wholly unconnected trying to shield their mistakes. Experts consider this is a suicidal approach. It provides only temporary relief, blinding the repercussions of failure.

The airline industry is an example of effective failure analysis. In the case of an air crash, for instance, the company spends hours analyzing the probable causes, studying the black box and brainstorming with engineers and pilots. They do not attempt to push the problems behind the scene. They also don't generally attempt to rationalize their actions. The analysis aims to identify the reason for the crash and enlightening engineers and pilots about the possible pitfalls. The reason is probably pretty simple. The price of failure in the airline industry is simply too high to allow a similar failure to occur twice. This analysis is in stark contrast to what is observed in many corporate environments. The reasons vary.

First, failure is a hit to individual ego and confidence. Hence, people prefer to shove it under the carpet.

Second, the process demands patience, tolerance, introspection and a spirit for inquiry, while companies normally reward qualities like decisiveness and action. Managers therefore feel less motivated to dwell on the reasons for their failure.

Finally, the inherent psychological biases and mindsets prevent people from taking a realistic and practical view of the problem. Thereby, they succumb to the temptation of mental biases. The ability to take a step back and analyze the cause of the failure becomes a hard proposition for many people and companies.

Everyone wants to hear what pleases them. Analyzing failure is therefore an exercise that most people feel deserves to be pushed under wraps or passed on to others. People seldom recognize the gain in scrutinizing failure since it would only expose weaknesses and unpleasant experiences and it is in everyone's interest to move on. A study of the telecom industry operating in the European markets reinforced this attitude towards failure analysis. The study revealed that companies committed similar mistakes over a span of twenty years and there was little and no learning from their failures. Managers in these companies tend to justify their failure instead of learning from it.

A similar trend is observed in consulting firms. For them it is even easier to blame their failures on the client! Thus, organizations must institute formal systems of failure analysis. The insights received need to be compiled for future use. To learn from a failure requires that the problem be analyzed fully.

Failure Analysis

So what's the big deal about failure analysis? What advantages and benefits does it offer?

Failure analysis has great potential for minimizing the risks associated with business strategies. It provides guidance and direction to the process of strategy implementation. In addition, it also has significant social and organizational benefits. For instance, it provides insights into possible pitfalls even for those not part of the failure. Second, it brings new approaches to solve problematic issues. It also teaches people to positively apply learning from failed attempts and discourages them from engaging in the blame game. Finally, it enlightens the value addition aspect of failure.

Corporations need to realize that failure and success are integral to the growth process. Success has always enjoyed maximum attention, but it is time people get positive about failure and recognize its inherent benefits.