Coffee cup and failure is success in progress

127 – Learning From Failure: How Psychological Safety Helps us Build Innovative Teams

Somebody in your leadership meeting half-raises an idea they have been carrying for a fortnight, watches your face, and talks themselves back down before they have finished the sentence. You tell them it is interesting and ask them to send you a note. The note never arrives. Six months later a competitor launches something remarkably similar and you find yourself asking why nobody in your business saw it coming.

Somebody did see it. They calculated the cost of being wrong in front of you, and decided it was not worth it.

Knowing Failure Is Useful Is Not The Same As Learning From It

My guest on this week’s episode of Impactful Teamwork is Rachel Franco, founder of Fail Smarter, who has spent a career in Fortune 500 healthcare, technology and financial services organisations, and who describes herself as one of those oddballs who loves failure.

Rachel has identified a gap she has not yet found the right name for, and it is the most useful thing in the episode. Intellectually, every leader you know accepts that failure is a learning opportunity. Yet that acceptance almost never translates into a team that emotionally recovers from a setback quickly enough to try again with any conviction. As Rachel puts it, the great innovators are not people who fail less. Their recovery periods are simply shorter.

I was raised not to fail, and when I left corporate life I wore it as a badge of honour that I never had. Business relieved me of that idea rather quickly.

The Numbers Sitting Underneath Your Culture Survey

Psychological safety gets dismissed as a soft, ethereal concern, which is precisely why Rachel keeps the data close to hand. Amy Edmondson, the Harvard Business School professor who did more than anyone to define the term, describes it as the belief that it is safe to speak up about ideas, concerns, mistakes or failures without fear of punishment or blame.

The commercial case is not subtle. A Forbes article, The Science of Failing Well, reports that teams with high psychological safety show 27% lower turnover, 76% higher engagement, 50% higher productivity, 26% higher learning agility, and are 67% more likely to apply new skills.

Google reached the same conclusion from the other direction. Project Aristotle studied over 180 internal teams and identified five factors behind team effectiveness. Psychological safety was the first, and without it none of the other four mattered.

You already know what it costs to hire, train and onboard a replacement. Now put that number next to 27%.

Your People Are Reading Your Face, Not Your Values Statement

Most of this starts with the leader, and with two behaviours rather than a programme.

The first is role modelling. When you talk openly about your own failures, and when you bring your team a genuinely half-formed idea and ask what they make of it, you create the permission structure. Nobody else in the room can create it for you.

The second is how you respond in the moment. When someone offers a wild idea, or raises their hand to say that something has gone wrong, your response determines whether they ever do it again. This is not only about the words. People pick up everything, and a leader who says all the right things while pulling a face has communicated the real policy.

The third failure is quieter. If ideas go up and nothing ever comes back down, people stop bothering. You will not pursue every suggestion, but a visible filtering process, an explanation, and recognition for whoever raised it are the difference between a team that keeps contributing and one that has learned there is no point.

The Herd Gives Feedback And Then Lets It Go

Horses correct each other constantly. The correction is immediate, proportionate and specific to the behaviour, and then it is finished. No grudge is carried into the next hour, and nobody is reminded of it a fortnight later in front of everybody else.

That combination of clear standards and short memory is what makes it safe to try again. Punish the try and you will spend the next two years wondering why your capable people have gone quiet. If people are too scared to fail, they will be too scared to try.

Your AI Rollout Is About To Test This

Every organisation is currently asking its people to work in ways none of us have done before. That is a behaviour change, and behaviour change requires a culture of experimentation in which people can test something, get it wrong, and say so out loud.

You cannot buy that in the same quarter you need it. Time has to be protected for it, because a team measured entirely on this month’s KPIs will do exactly what it is measured on.

None of this is an argument for recklessness. Smart risk is not the same as handing someone enough rope to bring down the business, and psychological safety does not lower the performance standard. It means you can finally talk about what happened.

Three Things To Do This Week

Tell your team about a decision of yours that did not work, what it cost, and what you took from it. Say it out loud in the meeting rather than in a one-to-one.
Run a proper postmortem on your last initiative that underdelivered, and invite two people from the other teams involved. Teams learn considerably more when they are not reviewing themselves alone.
Pick one idea that came to you in the last quarter and close the loop on it publicly, including the reasoning if the answer is no.

So my challenge to you this week is this. How do you bolster psychological safety so that your people can genuinely learn from the failure that is already happening in your organisation? And how do you make that a competitive advantage rather than a cost quietly sitting in your P&L?

Listen to the full episode of Impactful Teamwork for the difference between praiseworthy and blameworthy failure, the seven-question assessment Rachel uses to give a team its baseline, and the toy she uses to let executives fail repeatedly in a room where nothing is at stake.