Failure, for the win

What is it about failure? Headlines such as “Failure has never been more successful” and the global popularity of so-called “best failure” competitions hosted by companies as diverse as Google, Tata, or Enel show that the corporate world is on the path to embrace failure. At the bottom of this lies the concept of team psychological safety, which was developed in 1999 by Amy C. Edmondson, the Novartis Professor of Leadership and Management at Harvard Business School.  Psychological safety at work means that employees in working groups feel free to take risks, to share their mistakes, and to learn from them. They feel free to share their ideas as well as their problems.

In the recently concluded research project code-named Project Aristotle, a team of researchers at Google found that psychological safety is crucial to creating highly functioning organizational teams. According to the New York Times, “Project Aristotle has taught people within Google that no one wants to put on a ‘work face’ when they get to the office. (…) To be fully present at work, to feel ‘psychologically safe’, we must know that we can be free enough, sometimes, to share the things that scare us without fear of recriminations.”

The Rome-based multinational power company Enel is a member of the ESMT Sustainable Business Roundtable (SBRT). It is also one of Europe’s leading power companies, with the largest customer base among its European peers. In 2015, the company thought of the idea of creating safe spaces for employees to innovate, leading to the introduction of its so-called Best Failure Award.

In this unique interview, Ernesto Ciorra, the world’s first Head of Innovability – a reference to Enel’s revolutionary idea of merging innovation with sustainability – speaks with Joanna Radeke of the Center for Sustainable Business and Leadership at ESMT. The two share the do’s and don’ts of embracing failure at work.

Making failure visible

Joanna Radeke: What motivated Enel to start the Best Failure Award?

Ernesto Ciorra: The “My Best Failure” project was an idea that came to us as early as 2015, when we launched the first edition of the program. Nowadays, companies must either evolve or go extinct. To be best prepared for the rapidly changing future, they must look within to drive their transformation, tapping into the heart and soul of every company – the people which make it up.

We wanted to encourage our colleagues to experiment, to innovate, and to consider failure as a positive, normal outcome of trying to do something new rather than something they will be blamed or punished for. Enel is committed to building a “no-blame culture” inside the company, and it is doing so by celebrating “best failure stories” and sharing lessons learned by colleagues throughout the company.

Following the first edition of the program, we carried out a retrospective analysis and launched a second edition in 2018 with an improved user interface for the online platform, a new reward system, and more visibility overall for the people posting their stories.

One key element that we stress in this new edition is the need to differentiate a failure from a mistake. Failure is the result of trying something new that has an unknown outcome, but which teaches us an important lesson, whereas a mistake might be the result of carelessness, whose outcome could have been predicted by previous experiences and from which we draw less value. Some of the mistakes could be avoided if they are shared.

In addition, the criteria for awards now has two categories: Best Innovative Experimentation and Best Lesson Learned. These categories give our colleagues the possibility to view failure as the result of innovative experimentation on the one hand and as the path to important lessons learned on the other. 

Through the online platform, failures can be voted for; every six months, we award the two stories that received the highest score in both categories. By submitting the stories on the platform, we are highlighting the importance of experimenting and trying something completely new, while amplifying the valuable lesson learned, to share the lesson company-wide.

JR: Who shared their best failures?

EC: The stories were submitted by colleagues from all the countries in which we operate, all the business lines, and all the managerial levels. I myself have posted a failure on the platform. 

We have received some very interesting stories from those experimenting to improve relationships with suppliers and subcontractors on various construction sites. One story, which ended up winning Best Innovative Experimentation, was about an experiment made by our colleagues in Peru who worked tirelessly (without being discouraged by failures) to reduce network losses. Ultimately the lessons they learned led to their success.

Rewarding shared failure

JR: How did this initiative affect the company? What feedback did you receive?

EC: Changing the mindset of the company, especially establishing a no-blame culture, is a long and difficult process. It is not easy to speak openly about failure in any culture, let alone celebrate it, and initially we were met with a certain degree of skepticism. But some people in Enel saw this as an opportunity and had the courage to speak about their experiments and the lessons that they learned. Our initiative was also supported by many top managers, who shared their stories on the platform. By openly celebrating and awarding the best stories, we aim to enrich the professional experience of the colleague that shared their failure, offering “shadowing” programs with top managers, training courses, and even Master’s programs or other such experiences.

All of these outcomes have contributed to the enthusiastic embrace of the project, reducing the fear and taboo surrounding failure, and boosting our colleagues’ courage to share and to experiment. 

The second edition so far has seen an increase in website visits (+75%) as well as comments and votes (+170%), but we are striving to do even better.

Failing upwards

JR: What role does failure play in your quest to become a sustainable energy provider?

EC: We operate worldwide, in different conditions, in different communities. In the Atacama desert in Chile, around 200 local inhabitants had no secure and constant access to energy. We piloted the world’s first energy system built at high altitude combining solar, wind power, and co-generation with storage. This is exactly the place where we can test our most innovative ideas and practice reverse innovation, allowing us to learn before we introduce these innovations in more mature markets.

Another point where innovation meets sustainability is when we team up with local startups to solve social problems and, on the way, solve problems of our own.

In the favelas in Rio de Janeiro, for example, there is a problem with energy theft. Locals desperately needed energy because their homes were far too hot.

Together with a local startup Nossa Case (Our Home), we piloted solutions for bringing the home temperatures down without using energy, so people would not need that much energy and theft would be discouraged. We used Tetra Paks to create thermal lining systems that protected homes from the sun. This approach worked – it reduced indoor temperatures by around 9 degrees Celsius! We also employed and trained local favela inhabitants so they could, for example, repair our electricity poles.

This is a win-win approach and a circular economy solution with a positive impact on local communities, startups, and our company’s operations.

Spreading the failure gospel

JR: Why would you recommend this approach to other companies? (And when would you not?)

EC: Any company that aims to innovate and adapt to today’s complex challenges needs to instate a no-blame culture. Most of the change that happens within a company is bottom-up; if people are not involved and empowered to contribute, a lot of potential will be lost. Ultimately, people need to be encouraged to try something new, to experiment, and if they fail, to recognize the underlying lesson that they can learn from it, and then share their story, like we do through the My Best Failure platform.