How to Design a Culture That Values Experiments, Failure, (and Winning in the Long Run)- Valutrics

Aspiring entrepreneurs and new business owners often ask me for a secret formula for success, and they seem surprised when I tell them there isn’t one.

In my experience, every new business is best handled as a series of experiments, from which smart founders learn a winning strategy, after some mistakes. In fact, that culture of learning as you go is my secret to business success.

For example, you probably never knew that both Facebook and YouTube started out as dating-site experiments, but pivoted to something more unique when that experiment failed due to an apparently over-crowded market.

In today’s rapidly changing world, there are no sure-fire winning ideas, and experiments within clearly defined parameters are the only way to gauge the potential of emerging opportunities.

Investors often argue that founders learn more from failed experiments, so don’t be afraid to wear your failures with pride, in support of what you have learned.

In fact, I just finished a new book, “Winning from Failing,” by business development and sales productivity expert Josh Seibert, which extends this principle as well to large corporate organizations seeking to improve their productivity and success.

He and I both believe that the key to high growth in any company is a learning culture, led from the highest executive levels.

Everyone agrees that establishing and maintaining a company-wide learning culture is not so easy. It requires an ongoing commitment and effort from top executives and leaders at every level, with a focus on the following key principles:

1. Incenting everyone to step outside their comfort zone.

Innovation in building the business is just as important as in building the solution. Yet, by default, most team members stay within the realm of “what has always worked,” rather than stretch the limits.

Leaders need to reward experiments, rather than demand fixed processes.

2. Eliminate any drama and penalties from failed experiments.

Many managers and entrepreneurs love to play the game of persecutor, rescuer, and victim, on every initiative that doesn’t go exactly as planned.

In any of these roles, or by penalty, the manager discourages team members from taking anything positive from the learning opportunity.

3. Encourage a strong learning culture to improve accountability.

Organizations with a strong learning culture inevitably have a strong parallel culture of accountability. These are two sides of the same coin, and both lead to improved productivity and innovation.

Accountability must be demonstrated from the top, and rewarded rather than penalized.

4. Hire based on learning experiences rather than skills only.

One question most interviewers never ask is for evidence of what you have learned from previous failures, as well as successes. This identifies “potential,” or the ability to adapt to and grow into more complex roles and changing environments.

Potential is enhanced in a learning culture.

5. Establish mentoring and coaching relationships.

Both are an important part of every learning culture. Mentoring is a less formal arrangement for long-term career guidance, while coaching is a more formal association focused on improvements in behavior and performance in the current job.

These roles can be equally beneficial for both parties.

6. Clearly assign development responsibility and measure results.

For every learning initiative, including training, mentoring, and coaching, someone has to be responsible for the actual work to get it scheduled and track results.

Many executives give lip service to people development, but don’t allocate the necessary time or resources to be effective.

Once a learning culture is established, the fear of failure and retribution is removed, and people will move forward with confidence on a regular basis into uncharted territory.

In today’s rapidly changing environment, that is the only formula any company can adopt to achieve long-term viability and success. It’s up to you to make it happen.