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Why You Should Write an Annual Failure Report

Beyond the lessons learned, you’ll establish a culture that emboldens your employees to take risks.
Why your business should write an annual failure report
image courtesy of Engineers Without Borders

Remember that old Teddy Roosevelt quote — the slightly sexist one you had to write an essay about in high school? It goes something like this:

“The credit belongs to the man who is actually in the arena, whose face in marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming . . . and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”

In short, it’s better to dare to fail, than it is to fail to dare. Few would disagree. But when it comes to incorporating such derring-do into your company’s culture, you’ll probably need to do more than write a few presidential bons mots on a whiteboard.

Engineers Without Borders Canada, a nonprofit that specializes in international development, has gone farther — much farther — than inspirational quotes. For the past five years, it has published a “failure report” alongside its regular annual report. “I only let the best failures into the report,” Ashley Good (@admitfailure), the report’s editor, tells the New York Times.

On Management Innovation eXchange’s M-Prize website, Good explains how the report has helped to instill more risk-taking in her organization’s culture. The 2010 failure report, for example, features a story by an employee named Owen Scott about his efforts to improve the water-infrastructure monitoring system in Malawi.

Scott describes one of his failures as “prioritizing tangible activities as outcomes.” He explains, “Success is hard to find sometimes in development work and can have a serious effect on how we think about it. For me, success quickly became about having the district staff collect data — it was tangible, concrete, and simple. Success wasn’t about the district office valuing the program or about behavior change. This all but guaranteed that my own priorities and the actual priorities of the district would eventually become misaligned.”

As you can see, much of what a nonprofit like EWB can learn from its failures is transferable to the business world. Beyond that, Scott shared his failure with the organization in an extremely public manner. That’s a habit any culture should aspire to encourage.

And it’s cultures like this that abet recruiting. Good writes: “Michael Kennedy, who was hired last year to join EWB’s Water and Sanitation team in Malawi, told me, ‘The failure report is the reason I am in Malawi right now. Having had no previous experience with EWB, the report’s existence indicated to me that the organization was reflective and dynamic. It gave me the impression that if I had issue with an approach we were taking I would have opportunity to voice my concern and be heard — which has been the case.’”

In addition, EWB has acted on the events documented in its failure reports. In 2010, an employee named Eli Angen wrote about an outreach initiative called Bring EWB to Work. The idea was simple: The nonprofit would mobilize its volunteer engineers to make presentations about EWB in their workplaces. “A major goal was to deliver 200 presentations nationally through this mobilization strategy,” Angen reveals. Yet only 51 presentations were delivered (25 percent of the target).

Why did the initiative fall short? Angen gives three reasons:

1. Timing. “July was a poor time for workplace engagement given vacation schedules.”

2. No regional representative. “This limited our follow-up and personal touch required for engagement.”

3. No follow-up. “Seventy-five presentations committed were never delivered. We were not diligent in ensuring follow-through.”

When the time came for EWB’s next national outreach, the nonprofit acted on these lessons. Guided by Angen’s experience, the organization took workplace schedules into consideration. In addition, it identified regional representatives who could take the lead on follow-up actions. The campaign, according to Good, reached 85 percent of all the first-year engineering students it targeted.

EWB’s 2010 Failure Report



Perhaps the most well-known tale of establishing a dare-to-fail culture comes from Facebook COO Sheryl Sandberg’s days as a vice president at Google. After she apologized to cofounder Larry Page for making a multimillion-dollar mistake, Page famously told her, “I’m so glad you made this mistake. . . . If we don’t have any of these mistakes, we’re just not taking enough risk.” For more details, check out the 2006 Fortune article “Chaos by Design.”

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