When Should We Forgive Failure?

“Try and fail, but don’t fail to try.”
— Stephen Kaggwa

Earlier this week I was a guest on Minnesota Public Radio’s morning show discussing “The Gulf Oil Spill and the Blame Game.” The other guest was Alan Webber, ex of HBR, founder of Fast Company, and author of Rules of Thumb: 52 Truths for Winning at Business Without Losing Your Self, and we had a wonderful conversation about the culture of unaccountability that contributed to the ecological disaster we are witnessing in the Gulf, and the blame game that is being played out in the media.

One caller raised the fascinating issue of forgiveness, raising the legitimate concern that punishing failures like what happened with BP in the Gulf would lead inevitably to people denying responsibility, blaming others, and seeking to hide their failures. She highlighted the importance of allowing people to communicate bad news without fear, as well as learn from their failures. She advocated a culture of openness and forgiveness that would contribute to learning.

I’m sympathetic to her argument. Of course we want to encourage people to take measured risks and not nuke them if things don’t work out. Of course we don’t want to punish employees when unforeseeable contingencies occur and things blow up. To do otherwise would essentially short-circuit innovation and adaptation at the organizational level and gut the potential to learn at the individual level. Failure, innovation and learning are inextricably linked.

But (and it’s a big but) is the Gulf oil spill (and other situations like it) an example of us not being forgiving enough or being too forgiving? The key words in the previous paragraph are “measured risks” and “unforeseeable contingencies.” This means there are two types of failures, the kind we forgive (call it Type I) and the kind we punish (Type II). In my view, we should emphatically not forgive people for being reckless — either in taking inappropriate risks or in failing to prevent foreseeable contingencies. The appropriate response to these sorts of failure is punishment commensurate with the crime.

So should we forgive the CEO of BP for what has happened and chalk it up to experience and the need to learn? Or should he lose his job and be justifiably pilloried in the court of international public opinion? Equivalently are we witnessing a Type I or a Type II failure? The answer should turn on (1) what standard of care we believe should be applied in this circumstance and (2) whether Mr. Hayward, and the people who report to him, met that standard of care. Was this an example of measured risk-taking and unforeseeable contingencies, or was it a case of reckless disregard for potential problems and negligent failure to plan for potential contingencies?

And if we find it’s the latter, what is the price that should be paid? For absent real consequences for Type II failures, we should expect more of the same.

The original post is here, by Michael Watkins @ Harvard Business Publishing