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Business Officer Magazine

Fostering a Risk-Taking Culture

While leaders often focus on success, failure also leaves useful clues. In the book, Whoever Makes the Most Mistakes, authors explain how negative results can be deciphered in ways that make organizations and their leaders smarter and more effective.

By Patrick Sanaghan and Susan Jurow

In the May 2011 Business Officer feature article "Who Will Step Into Your Shoes?" we explain the urgency for ensuring that our colleges and universities keep the leadership pipeline flowing. This is no easy task in our evolving environment that poses complex challenges resistant to traditional solutions. One of the new leadership competencies that we cite is that of taking risks. Following are some insights from a rather surprising book by Richard Farson and Ralph Keyes, Whoever Makes the Most Mistakes Wins (Free Press, 2002), which remains relevant today.

"Failure-tolerant" leadership is a central concept in the book. The authors point out that many of the most successful companies have learned that failure is an essential part of the learning and innovation process. These companies are not afraid of failure; they understand what a vital role it plays in the discovery of new approaches and ideas, or solutions to intractable and daunting problems.

Farson and Keye are not talking about tolerating lethal failures, for example, in situations where a person's life or the long-term viability of the organization is at risk. Fortunately, few of us have to deal with those kinds of events. Rather, the authors mean tolerating the potential of failure in the solution of everyday challenges, problems, and opportunities that leaders must address on a continual basis.

Obviously, no one begins a project or initiative with the intention to fail, but with any real risk, there is the possibility of missed opportunities, mistakes, and mishaps. With a supportive institutional culture—one that encourage openness, fosters trust, and values individual and organizational learning—failure can be part of a process that builds and improves stellar institutions.

The key to the success of a failure-tolerant organization and leader, note Farson and Keyes, is the capacity to learn from experience, to understand what happened, and to apply the lessons learned to new and different situations. Success, as well as failure, leaves clues. If these clues can be captured and deciphered, organizations and their leaders can become smarter and more effective. Failure-tolerant leaders encourage questions, are willing to admit they don't know everything, own their mistakes, and are less judgmental of their followers.

Considering the adaptive and complex challenges that face higher education, failure could be coming fast and furiously. If our institutions and our leaders are afraid to fail, they will cling to the status quo, think smaller than is warranted, risk meekly, and move defensively into the future.

PATRICK SANAGHAN is president, The Sanaghan Group, Doylestown, Pennsylvania, and SUSAN JUROW is subject matter consultant, leadership, for NACUBO.

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