SDA Bocconi’s Marco Tortoriello discusses success and failure in business, and the role Business Schools have to play in ensuring that failure doesn’t become demonised
‘There is always the possibility of making a mistake, but we can try to avoid mistakes from learning from the experience of others,’ says Marco Tortoriello, Professor of Strategy and Organisations at SDA Bocconi.
In this interview, Tortoriello outlines why he asks his MBA students to acknowledge failure. In his opinion, there is no strategy that allows failure to be avoided entirely and one should be wary with the concept of ‘failing fast’ as it can encourage people to take a reckless approach to problem solving.
For the SDA Bocconi Professor, it’s therefore important to underline the need for MBAs, business leaders and entrepreneurs to be resilient in the face of adversity. Read on to learn more.
How do you define success in business?
We have this bias about success in business and love to talk about the success of companies such as Amazon, Google and Apple. But failure is important too, and we don’t talk enough about it.
Success is multi-faceted in business and there are many different ways in which to define success. The easiest possible way to define success is to consider being able to achieve your objectives, whatever they are.
What are some of the key components of success in business?
Business leaders have to be consistent and persist in their efforts. They also have to be able to adjust to the signals they are receiving from the environment.
If business leaders have a long-term strategy in mind and fail to adapt to the early signals of, for example, what the market is telling them or how their stakeholders are reacting, then they might run into trouble. Business leaders have to be flexible in order to incorporate these responses into their strategic moves.
Is failure needed for innovation and success in business? Why or why not?
Failure is part of the learning process but we talk about it through the lens of success versus failure. Therefore, we fail to pause and consider how important failure can be for learning.
Throughout history, successful entrepreneurs have often experienced a long string of failures before they hit it big. Does that mean that failure is a necessary and sufficient condition for success? No. But failure is part of the learning process through which you achieve success.
Why do you think that failure is a subject that is not really touched on in higher education?
This has to do with the general image that business leaders like to have of themselves and no one likes to see themselves as a ‘failure’. Normally, people would rather look at other failings and say things such as, ‘of course they failed, they didn’t take this into consideration’.
The truth of the matter is, in the business world, the vast majority of business ideas fail. These ideas don’t necessarily fail because they are bad ideas but because people have a poor understanding of what it takes to implement these ideas. So the suggestion here is to say: ‘How can I take the next step to minimise the chances of failure?’
As a result, I don’t advise my students to go out and fail. Instead, I ask them to acknowledge failure.
Do you think Business Schools should do more to teach students about failure?
Business Schools should collectively teach students more about failure. There should be conversations about failure and it should not be viewed as a taboo topic. Statistically, the majority of businesses fail and we don’t hear about most of them. These failures don’t show up on the radar.
No one likes to talk about how they failed, but Business Schools need to teach students to acknowledge failure and help them consider failure as part of the learning process.
Case discussions about failure are important because they are the most natural way to recreate the environment at the time when a decision was made that led to failure. Through these discussions, students can talk about things such as if there was an internal logic or consistency in the decision made even though it eventually ended up in failure.
In my MBA classes, I always incorporate cases studies about failure and keep a balance between the ‘winning’ business moves and the business moves that didn’t go so well. I always tell my students that the people who made these ‘bad’ decisions were judged as stupid and received comments such as ‘why did they or that?’ or ‘that was a mistake’. However, in these case studies, the people who failed were the best and brightest in that particular point in time in that given industry, got paid a lot of money and spent most of their professional lives thinking about an idea and how to make it happen.
When we realise failure, we should be humble rather than say things such as ‘it is obvious why they failed’. Dismissing a failure as an ‘obvious’ mistake does not help students to understand the deep-seated reasons and complexity of the situation which lead to the wrong set of decisions. This is because if a mistake was ‘obvious’ at that time, they probably wouldn’t have made that mistake, and they would not have failed.
There is always the possibility of making a mistake, but we can try to avoid mistakes from learning from the experience of others. In that sense, the case method is extremely useful to examine and discuss the failure and success of business moves. It is because of this that I tell my students to put themselves in the shoes of the decision makers when a particular decision has to be made, and ask ‘why?’
Business leaders can be afraid to fail, and therefore can be afraid to innovate. In what ways can Business Schools change this mindset?
Business Schools need to talk openly about failure and help students consider it as ‘part of the picture’. Failure is a discrete event. But to get to this discrete outcome, there is a string or sequence of decisions, events and approaches. Business Schools should help students dissect the process, in particular, to analyse what happened step by step to see what went wrong in the sequence of decisions being made that eventually resulted in failure instead of success. It’s about the critical appraisal of it that will get students to learn from instances of failure.
Failure should be looked at as objectively as possible. Sometimes, people get very emotionally involved in a project. When it fails, they don’t want to talk about why it didn’t work. I understand that. It happens to everyone and happens to me when I don’t achieve my objective. But the point is to think about the next move. This move can be just as important and as relevant for you in your personal growth and career as the move that failed. There is always a next move in which you can engage.
In your opinion, what are some of the best ways an MBA can handle failure?
MBAs should never give up, be resilient in the face of adversity and be strong. It’s easy when things are going well but it’s much harder when things are not shaping up the way you want them to.
What do you think are some of the best strategies an MBA can use to learn from failure?
MBAs can put themselves in the shoes of the decision makers. However, this is very hard, because in most circumstances, we know what happened and have the benefit of hindsight. So MBAs need to be able to ‘reset the clock’ and only use the information that was available at the time the decision was made.
MBAs can also think of failure as a cadaver, with themselves as a physician. For example, physicians conduct autopsies to understand what happened when someone dies. They are not emotional and are objective when they do that – MBAs need to do the same when assessing and reflecting on failure.
What are your thoughts on the strategies that put an emphasis on failure in order to achieve success? For example, the idea of ‘failing fast’? How viable are they in the business world?
There is some value in ‘failing fast’ because it goes back to learning process. But at the same time, I don’t like this rhetoric because it makes people reckless in the way they approach problems because they say: ‘I should fail’.
The message can also be misunderstood. I hear people say: ‘Failure is not a problem as long as you fail fast and don’t fail next time.’ But it is not about how fast or slow that failure is, it’s about learning. If you don’t learn, none of this matters because you are going to fail again.
In the end, these are lessons that only process can teach us and this creates a subtle shift in what it means to fail fast. Failing fast can be provocative, but we need to take the provocative part out of the equation and try to be focused to see what we need to learn to avoid failure. Then we can go back to square one to analyse what happened and learn from it so hopefully next time we succeed and not fail again.
There are probably better strategies in order to achieve success. But whatever strategies we adopt, there is always a chance that we might go back and fail, particularly for entrepreneurs. This is because they are new to the game, don’t have a lot of resources or teams in place, and they are normally not clear about whether there is a market for their idea or whether they have to establish one. The cards are stacked against entrepreneurs. What do they do then? They do their best. There isn’t a strategy that will allow us to avoid failure entirely as it is part of the process of growing and learning.
Marco Tortoriello is Professor of Strategy and Organisations at Università Bocconi and Associate Dean for the Masters Division at SDA Bocconi School of Management.
