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The Myth of Failure Tolerance: Should Proactive Leaders Risk Failure in Tough Times?

We talked about making sacrifices and suffering recently–but what about failure? Depending on whom you talk to failure is either something that you should avoid or embrace.

Michael Jordan, in the video below (full disclosure: Nike Ad), says that failure helped him achieve success. In other words, he would not have accomplished anything if he, presumably, let the idea of failure cripple his skill. It’s an inspirational thought.

Failure is an uncomfortable notion. In our culture we have created a sense that effort should be taken into account before evaluating the magnitude of the failure. There is a sense that the more you take on, the more you challenge yourself, the more you experiment, the more you risk, the more you’ll be supported if you fail to achieve your goal.

In entrepreneurial workplaces, we often hear that value is placed on risk taking, that taking things to the cutting edge will be rewarded, even if success is not achieved.  While this may be an interesting notion, it does seem to me that there is less here than meets the eye.  It is one thing to talk about failure in times when resources are abundant.  It is quite another to talk about risk taking when resources are scarce.  Put in slightly academic terms, the more we approach a zero-sum game, the more we become nervous about risk, and less tolerant of failure.  When we approach a non-zero-sum game, that is when resources are abundant, we’re less nervous about risk and more tolerant of failure.

There is a certain irony to this because as resources become scarcer, leaders may push for retrenchment and risk aversion, taking risks becomes one way of moving ahead.  As had been said often lately, in today’s market, those that risk may in fact wind up on top when the economy again sparkles. But who exactly is willing to take risks when resources are scarce? Who will take risks when the downside is at hand? In truth, in our culture, we celebrate risk-taking but quietly are intolerant of failure and when things really get rough we’re intolerant of risk taking and failure.

The challenge for leaders is not whether they’ll risk and encourage others to risk in good times, but whether they’ll risk and encourage others to risk—and subsequently stand behind the failure—when times are bad. It’s one thing to risk when you are already playing for the NBA–it’s quite another to risk when your playing with a semi-pro team in northern Florida barely making a living and hoping to get another contract. Sure, if you don’t try to hit it out of the park you may never make it to the major leagues but if you go for the long ball and miss you may be left with no food on the table. So, it’s not that simple.

If there is ever a time for leaders to push innovation, to push entrepreneurship, to do it rigorously, cautiously, but with enthusiasm, it is when things seem the toughest. Proactive leaders who are entrepreneurial are now more necessary than ever before. Theoretically, if all is right with the world they and their organizations are the ones who will be rewarded when the economy reemerges. But, which one of them is willing to go for the long ball when they realize how close they are too stumbling into the minor leagues?