As flashbulb memories go, it is destined to become a defining moment in countless careers: It’s mid-March 2020, and suddenly you have to figure out how to run the company while locked up, or down, depending on your view of these things. No more client face-to-face meetings capped off with a nice expensed lunch. No more team pep talks. No more sitting down with a stack of cheques that need your John Hancock. You had to act fast or fail.
Which, admittedly, is slightly different than the mantra that pervaded the tech sector for much of the decade prior to the pandemic. “Fail fast” was a catchphrase popularized in a 2013 bestseller called Fail Fast, Fail Often, by Ryan Babineaux and John Krumboltz, Stanford University researchers steeped, presumably, in the agile world of Silicon Valley.
They had reworked the 19th- century notion of trial and error, a term coined by a Columbia University psychologist who, in turn, repackaged that timeless parental imperative to learn from one’s mistakes. Fail-fasters espoused a vision of entrepreneurship that went more or less like this: Come up with an idea, invest as little as possible to see if it works, figure out how to tweak it so it does work, rinse and repeat. Instead of trying to devise a solution for everything that could go wrong, they argued, entrepreneurs should “iterate,” which was a polite way of saying they shouldn’t be afraid of having some scheme go totally sideways. Indeed, in the buzzy pre-pandemic period, fail fast itself became something of an industry, with tech and consulting giants such as IBM and McKinsey offering advice on how to stumble constructively.
Alas, those were different times—or were they? In this post-pandemic world, which has become much more digitized, much more volatile and much more risk-averse, does fail fast still have cachet? Did businesses and managers come through the plague with a new way of thinking about ideas they wouldn’t have touched with a barge pole five years ago, or has this whole wrenching experience forced organizations to downshift and back away from the free-wheeling ethos of the pre-pandemic 2010s?
The not entirely satisfying answer is: both. If the state of venture capital deal-making offers any insight, then fail fast is alive and kicking. In both the U.S. and Canada, the pandemic period saw a huge surge in deals. According to Pitchbook, the volume of U.S. deals—angel, early-stage and late-stage—almost doubled between mid-2020 and early 2022 (there’s been a decline more recently). The Canadian Venture Capital Association reports very similar trends.
“If anything, the fail fast and learning from failure [orientation] is even more salient after COVID than before,” observes Grant Wilson, an assistant professor of marketing at the University of Regina’s Hill School of Business, who studies innovation.
Prior to going into academe, Wilson worked at a biotech startup. “The company really subscribed to fail fast and learn fast,” he says. But not all belly flops are created equal. In his research, Wilson has identified three broad categories of failure: self-inflicted wounds, failures that occur because of imponderables or uncontrollable economic trends, and failures that happen when firms embrace the idea that errors can be put to good use. Those in the latter category, he adds, have a culture that strongly discourages finger-pointing. “They don’t care about who is responsible. They don’t emphasize the blame game. They’re not focused on who did what,” he says. Unfortunately, this outlook doesn’t come easily.
Strategic management expert Paul Snowdon, an assistant professor at McMaster University’s DeGroote School of Business, has observed a very different post-pandemic dynamic in the larger organizations for which he consults. Almost all, he says, had to make major pivots and adjustments when the pandemic started, a process that forced many out of long-established habits. He wondered whether they had permanently shifted their outlook and would continue to embrace the kinds of innovations and workarounds triggered by COVID-19 restrictions.
“That’s actually not what happened,” Snowdon says. While there were change agents in these larger organizations who felt at home in that unfamiliar world, many more wanted to get back to their old pre-pandemic ways. “There’s largely been a return to the way it was,” he says, “with some areas of the business learning from this experience and applying what they learned.” He adds that in large and mature firms—where well-established business lines determine budgets, staffing levels and so on—abrupt shifts, such as rapid product changes, tend to reduce output, which is disruptive.
It’s worth pointing out that even in the before times, not everyone in the tech world worshipped at the altar of fail fast. Netscape founder Marc Andreessen, one of Silicon Valley’s venture capital titans, is one skeptic. In a 2016 interview, he said that “fail fast” makes sense for tactics—”if a tactic doesn’t work, find another tactic.” But, he added, “I think fail fast is catastrophic if it is applied to strategy and goals. A lot of founders talk themselves out of what are going to be good ideas in the long run because they aren’t getting immediate traction.”
Indeed, some tech companies whose leaders had totally bought into fail fast or “agile” innovation found themselves trapped in a state of perpetual chaos characterized by chronic short-term thinking and a fixation on beta testing.
Others have pointed out, wisely, that failing fast didn’t achieve much of anything if you didn’t also learn from your mistakes, which, as everyone knows, is far easier said than done. “Why does failure undermine learning?” asked a pair of University of Chicago organizational psychologists in a 2019 literature review. “Failure is ego threatening, which causes people to tune out. Participants learned less from personal failure than from personal success, yet they learned just as much from other people’s failure as from others’ success. Thus, when ego concerns are muted, people tune in and learn from failure.”
Assuming the pandemic didn’t short-circuit our deep-seated ability to course-correct, it would seem the fail-fast approach to innovation still has merit—although perhaps its devotees, having endured not just COVID lockdowns but supply chain chaos, runaway inflation and a vanishing labour force, may bring a bit more gravitas to the process. Still, Wilson says the fundamental insight about fail fast remains unchanged, which is that companies of all scales should embrace an ethos of learning from failure. “That failure-learning orientation is a difference maker between the top and middle of the pack.”
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