Giving Employees Space to Fail

In 2007, two designers struggling to pay bills had an idea to rent out three air mattresses on their living-room floor and cook breakfast for their guests. The idea struck during a design conference in San Francisco when the city’s hotels were fully booked. The two men created a website, Airbedandbreakfast.com, and charged $80 per night.

The designers, Joe Gebbia and Brian Chesky, decided to target conferences, aiming to have locals list their rooms for conference attendees to book. Next, they attempted to take the idea to the South by Southwest conference in Austin, Texas, but the idea flopped. Only six people put up listings and just two people booked them — one being Chesky himself. In an interview with National Public Radio host Guy Raz in the podcast “How I Built This,” Gebbia said this failure was “completely demoralizing.”

Gebbia and Chesky sought feedback from guests and discovered that people found exchanging money in person awkward, especially inside a home. Taking the feedback, Gebbia and Chesky decided to bring the transaction online, allowing people to seamlessly pay with a credit card. Suddenly, the two realized they had a business model — a 3 percent service fee from hosts to cover the cost of processing payments online and to help operate the Airbnb platform, as well as a 6 to 12 percent guest service fee from bookers. Today, Airbnb is the preferred lodging experience for millions of people around the world and has expanded into a multimillion-dollar business.

Raz summed up this lesson as “failure is your friend” in his keynote at the Chief Learning Officer Symposium in Houston last October. Through interviewing entrepreneurs for his podcast, Raz has unique insight into the minds of the most successful entrepreneurs. But lessons from entrepreneurs can be extended outside the entrepreneurial field and into the world of learning and development. Learning leaders can nurture and support an entrepreneurial mindset inside organizations by creating a culture that supports failure, problem-solving and innovation.

Supporting Failure

At this past CLO Fall Symposium, Raz said Airbedandbreakfast.com’s failure at South by Southwest, and the feedback that came from it, led to the single most important innovation that transformed Airbnb into the biggest online marketplace for arranging and offering lodging.

Raz said learning leaders need to give people the space to be confident by giving them the space to fail. He said anything can be learned, but not instantly — it’s a matter of giving people the space and time to ruminate before they can get good at something.

Raz does this on a small scale at NPR for his three podcasts. They have a rigorous, competitive internship process, supporting two interns at a time. He said it takes about a year and a half of “hand holding” for someone to be ready to do one segment of the “TED Radio Hour” podcast on their own.

“It’s a lot of time and investment,” he said. “We give them a lot of time and space to screw up, but we always have a safety net under them. They might screw something up, but it’s never going to be catastrophic. It’s never going to destroy the show.”

Matthew Harris, co-founder of Patheer Inc., a talent development and analytics platform, said he identifies with the lesson about failure through his experience as an entrepreneur. “Failure is your friend because you get to learn what doesn’t work and then you can move on and try a different solution,” he said.

Scholley Bubenik, author of “People Power: An Entrepreneur’s Guide to Managing Human Capital,” said the most important way to dig out of failure is to problem-solve. “I look at failures as opportunities,” she said. “When something doesn’t go the way I expect it to, I think about what I learned from it and how I could modify it or make changes to be successful.”

She agreed that employees need opportunities to fail and to solve problems in the workplace. “If you don’t make mistakes and you don’t fail, sometimes that means you’re not changing,” she said. “If you’re not changing, you’re not growing and you’re not learning.”

Fostering Internal Innovation

Traci Wilk, senior vice president of people at The Learning Experience, said learning leaders can nurture and promote an entrepreneurial mindset inside organizations by acting as servant leaders. “Leaders have the responsibility to role model and influence others to act in ways that bring out the best in people,” she said. “In my experience, the majority of learning leaders are naturally focused on the needs of others and helping them to develop, seeing this as the route to both personal and organizational success.”

When learning leaders use their influence to demonstrate the impact of these principles on retention, engagement and business results, Wilk said they shift traditional notions of leadership and better prepare companies to face uncertain futures.

Harris added that part of learning leaders’ support of internal innovation involves staying open to what people want to learn. “If you have someone in marketing who wants to learn programming, take advantage of that,” he said. “They could become a good programmer — or maybe it fails, but at least you took a shot and you kept someone engaged at your company.”

He said the more open learning leaders are to giving people the ability to learn different things, even if those things aren’t related to their careers, the more engaged the employee will be and the more opportunities they will have. Rather than leaving the company, Harris said this could provide the employee with an opportunity to move departments within the company. “Giving people the freedom to learn is what starts the entrepreneurial spirit,” he said.

Those who already have an entrepreneurial spirit have an exceptional desire to learn and CLOs need to support that, Harris said. “As an entrepreneur, you have the rebellious spirit of wanting to do something completely different and new,” he said. If learning leaders don’t support this creative attitude, Harris said there is a missed opportunity for internal innovation.

“The more you learn, the quicker you’re going to succeed,” he said. “If you give people that openness to learn, they are going to be more open with you in terms of what they want to learn and where they want to go.”

Bubenik added that nurturing internal innovation starts with looking within the organization to see who exhibits entrepreneurial traits and working with the human resources department in recruiting to ensure the company is hiring people with entrepreneurial mindsets.

Bubenik said innovative employees can be found throughout the organization. “Everywhere, from the person doing the basic job — hands-on on the manufacturing floor — up to the people who are in the executive roles,” she said. “Often, it is those people who have their hands in the work that can see innovation a little bit more clearly because they are actually doing the work.”

Teaching Leaders to Listen

If an organization is too rigid, Bubenik said it’s hard for learning leaders to build an entrepreneurial culture. She said a big part of a CLO’s role is to train management on how to support that culture. She said to look for examples of leaders who have been successful risk-takers and who support the development of their people. “Engage those leaders in helping you develop programs that can mirror what those individuals are doing,” she said.

Since developing coaching and mentoring programs is so vital in bringing out internal innovation, Bubenik advises bringing in an outside person to coach managers in mentoring to in turn create a program and platform for managers to subsequently coach employees. “Managers are not always the best at taking the time to have one-on-one meetings with employees to ask them for their ideas, to give them feedback,” she said. “Sometimes they don’t clearly see the importance of developing their employees except when it’s the annual review time.”

NPR’s Raz doesn’t have that problem as a manager. He believes successful leadership is about listening to people. He said he tries to be disarming by making himself available to talk to his co-workers about anything. “Every week I make sure that I’m asking every single person how they’re doing,” he said at the CLO Symposium. “Is there something you want to work on? Is there an idea you have? Do you feel challenged?”

Raz said he doesn’t want to overwhelm his employees, but he wants to make sure everyone feels motivated and committed.

Bubenik said when learning leaders develop programs that encourage creativity and serve as a platform for managers to be engaging in this way, it can spark innovation and creativity. She said the most important part of leadership development programs should be teaching leaders how to have a leadership attitude. “You are going to focus on developing strong relationship skills, you’re going to invest in your people, because that’s what leaders do,” she said. “Managers manage people and leaders develop people.”

Wilks added that taking a traditional, authoritarian leadership approach can harm employee morale and hinder creativity and innovation, ultimately stifling growth. “Leaders don’t necessarily need to carve out discrete time to focus on these areas; rather, they should infuse these concepts into everything they already do,” she said. “This may include taking a fresh approach to a recurring problem or building in retrospective activities once an initiative has been implemented.” She said incremental adjustments may ultimately yield greater, more sustainable results than radical, sweeping change.

Measuring Success

Few would argue against having an entrepreneurial approach inside an organization, but the reality is that few companies focus on supporting this type of internal entrepreneurship. By nature of hitting sales goals and revenue expectations, it can be hard to step aside and make time for proper intrapreneurship and innovation. But Bubenik argues that focusing on intrapreneurship will help the company’s bottom line in the long run.

“A work environment that fosters intrapreneurship and innovation typically has a high level of employee engagement,” she said. “High employee engagement will lead to high employee retention, which leads to profitability.”

In fact, Bubenik said sometimes a company’s sales team and customer support employees can provide the best advice for improving the firm’s products and services, leading to higher retention, higher sales and revenue growth. In addition, Bubenik argued that if companies aren’t growing, they are dying — they must always be thinking about how to make their product or service better.

“Even though they may differentiate themselves at one point in time, they can’t stop there,” she said. “Pretty soon, new technology will be adopted, or those services will be mirrored and duplicated by someone else — you have to be innovative in figuring out the next best thing.”

Any learning objective or training program is usually tied to a business goal. Bubenik said if learning leaders want to develop intrapreneurship, innovation or creativity programs, they need to build a business case first. “At the end of the day, everyone is looking at the bottom line, so you can’t come in with a ‘feel nice’ program,” she said. “It has to be tied to what causes pain in the organization — not meeting sales goals, not retaining or attracting key talent, being outsmarted by competitors and losing your share of market. These are good hard business cases for developing these kinds of programs.”

However, Raz says over time, there needs to be a cultural shift in how companies measure success. He used mentoring as an example — something he loves to do for his employees. “It was transformational for me to have people who gave me space to fail, who gave me feedback, who talked through ideas with me,” he said. “I try to be that to other people. I carve out time in my day to be available for this.”

However, organizations don’t necessarily value mentoring as a measure of success or see it as a data point. “How many companies are going to say, ‘Oh Joe over there, his sales numbers aren’t looking great, but he’s mentored 40 people who are now all over the company,’ ” Raz said. “That’s a pretty valuable employee. He might be a crappy sales guy, but maybe he’s really inspired people.”

Raz said profits are important, but they can’t be the only measure of success. “Look at the Starbucks story — growth, growth, growth, but at the expense of the community aspect, which was something that people really did value,” he said. “We all have a responsibility in trying to shift the culture.”