Often a failed project is a critical step in getting to success. Once or twice a year, at our product meetings, I ask all of our managers to complete a simple form outlining their bets from the last few years, divided into three categories: bets that went well, bets that didnât go well, and open bets. Then we break up into smaller groups and discuss the items in each category and what weâve learned from each bet. This exercise reminds everyone that they are expected to implement bold ideas and that, as part of the process, some risks wonât pay off. They see that making bets is not a question of individualsâ successes and failures but rather a learning process that, in total, catapults the business forward. It also helps newer people get used to admitting publicly that they screwed up on a bunch of stuffâas we all do.
2. DONâT MAKE A BIG DEAL ABOUT IT
If you make a big deal about a bet that didnât work out, youâll shut down all future risk-taking. People will learn that you preach but donât practice dispersed decision-making⌠Reedâs reaction is the only type of leadership response that encourages innovative thinking. When a bet fails, the manager must be careful to express interest in the takeaways but no condemnation. Everyone in that room left with two major messages in mind. First, if you take a bet and it fails, Reed will ask you what you learned. Second, if you try out something big and it doesnât work out, nobody will screamâand you wonât lose your job.
3. ASK HER TO âSUNSHINEâ THE FAILURE
If you make a bet and it fails, itâs important to speak openly and frequently about what happened. If youâre the boss, make it clear you expect all failed bets to be detailed out in the open⌠Itâs critical that your employees are continually hearing about the failed bets of others, so that they are encouraged to take bets (that of course might fail) themselves. You canât have a culture of innovation if you donât have this. At Netflix, we try to shine a bright light on every failed bet. We encourage employees to write open memos explaining candidly what happened, followed by a description of the lessons learned.