Catmull is honest and human in acknowledging that failure hurts. Embracing failure is far easier to say than to actually put into practice! “To disentangle the good and bad parts of failure,” he says, “we have to recognize both the reality of the pain and the benefit of the resulting growth.” He points out that it's not enough to simply accept failure when it happens and move on, more or less hoping to avoid it going forward. We need to understand failure not as something to fear or try to avoid, but as a natural part of learning and exploration. Just as learning to ride a bike entails the physical discomfort of skinned knees or bruised elbows, creating a stunningly original movie requires the psychological pain of failure. Moreover, trying to avoid the pain of failure in learning will lead to far worse pain. Catmull: “for leaders especially, this strategy – trying to avoid failure by outthinking it – dooms you to fail.

There’s a quick way to determine if your company has embraced the negative definition of failure. Ask yourself what happens when an error is discovered. Do people shut down and turn inward, instead of coming together to untangle the causes of problems that might be avoided going forward? Is the question being asked: Whose fault was this? If so, your culture is one that vilifies failure. Failure is difficult enough without it being compounded by the search for a scapegoat.

In a fear-based, failure-averse culture, people will consciously or unconsciously avoid risk. They will seek instead to repeat something safe that’s been good enough in the past. Their work will be derivative, not innovative. But if you can foster a positive understanding of failure, the opposite will happen.

There is a crucial yet hard-to-understand concept here. Most people grasp the need to set priorities; they put the biggest problems at the top, with smaller problems beneath them. There are simply too many small problems to consider them all. So they draw a horizontal line beneath which they will not tread, directing all their energies to those above the line. I believe there is another approach: If we allow more people to solve problems without permission, and if we tolerate (and don’t vilify) their mistakes, then we enable a much larger set of problems to be addressed. When a random problem pops up in this scenario, it causes no panic, because the threat of failure has been defanged. The individual or the organization responds with its best thinking, because the organization is not frozen, fearful, waiting for approval. Mistakes will still be made, but in my experience, they are fewer and farther between and are caught at an earlier stage.

Note that healthy attributions about failure not only stay balanced and rational, they also take account of the ways—small or large—that you may have contributed to what happened. Maybe you didn’t prepare sufficiently for the interview. This is not to beat yourself up or wallow in shame. Quite the contrary; it’s about developing the self-awareness and confidence to keep learning, making whatever changes you need so as to do better next time. Each of us is a fallible human being, living and working with other fallible human beings. Even if we work to overcome our emotional aversion to failure, failing effectively isn’t automatic. We also need help to reduce the confusion created by the glib talk about failure that is especially rampant in conversations on entrepreneurship.

Now consider what happens when senior executives, or parents, for that matter, state unequivocally that failure is off-limits, that only good results are acceptable. Failures don’t stop. They simply go underground. Unwittingly, the financial services executives I spoke with were at risk of inhibiting the transmission of bad news. That wasn’t their goal. Their goal was to encourage excellence. But it’s human nature to hide the truth when it’s clear that sharing it will bring punishment—or even just disapproval. Our fear of rejection presents the third barrier to practicing the science of failing well.