Failure Is Not an Option. It's Required. A CEO explains the best way to react when a team member makes a mistake.

By David Hassell

Opinions expressed by Entrepreneur contributors are their own.

Whether you're creating the next big social media platform or attempting to perfect the hamburger, you want your business to succeed. On that burger challenge, you can stop trying, though, because that feat was already accomplished by Father's Office in Santa Monica, Calif.

When people think of success, they are usually talking about hefty profits and minimized costs. Certainly financial growth is a desired outcome. But one definition of success is much more modest. It literally means a result or outcome. Thus, if success is not necessarily a positive, then it stands to reason that failure is not necessarily a negative. What's key is to address failures, learn from them and move on to what comes next without completely demoralizing your team.

Related: 5 Ways You Can Practice Imperfection

Compare two approaches to failure.

Most businesses deal with failure in one of two extreme ways. The first, made popular by many tech companies, is "fail fast, fail often." At the other extreme is the notion that "failure is not an option."

Companies that adopt the second extreme immediately instill fear and anxiety in every employee. The idea is then if failure is not an option, then you must succeed all the time. You can't take risks or try anything new. There is no way that you will agree to take on a big project. You are always going to play things safe.

The next thing you know, you have built a stagnant culture with low engagement. There is zero collaboration because nobody wants to associate with someone else's failure. And with that attitude, your business will never be competitive in the marketplace.

Related: What Do Great Leaders Discuss With Their Employees?

Remember it's not the fall that hurts.

In embracing failure, you understand that the best way to learn what's possible is to take risks. My baby son understands this well. He wants to move and has started by pulling himself up any way he can. He has failed repeatedly, using a body that he can't yet fully control. Eventually he learned a better way. My job is to let him fail without shame or reprimand.

Likewise, your company must adopt and embrace failure as part of its culture and recognize that it's not only OK but something to be celebrated. For example, Plumpjack Winery has an annual failure award to celebrate stupid outcomes based on good intentions. This keeps the company's environment fun and innovative and the response to failure is this: The immediate outcome was not desired, but what can we learn from it?

Ask fast. Ask often.

It's tough being a manager when there's a negative business outome. Recently I felt strong emotions when an error was made that seemed costly at first glance. But once I had all of the facts and saw the employee's perspective, I came to feel that oversights happen.

I took several deep breaths and asked questions to find out how it all happened:

Me: "Fill me in on the story and history of events. How did we arrive at this decision?"

Employee: "Our outside vendor was elusive and when I finally reached the company, it did not provide the right information to us. We proceeded based on the data the company provided and a shorter timeline than we would have liked."

It's easy to think that someone is an idiot and wonder why he or she didn't see something the way you do. Jumping to conclusions is dangerous, however, whereas soliciting employee feedback leads to phenomenal conversations about how to prevent such events in the future. Since I communicate with members of my team on a weekly basis, employees could make a quick correction, which significantly minimized the impact.

Had I come down hard on the employee, I would have damaged the relationship and instilled fear in someone who had been amazingly proactive and who took immediate responsibility for his actions. I want to encourage proactivity and accountability among my team, not have everyone live in fear of me.

When you inquire, almost without exception you will find out the wrong decision made perfect sense from the employee's perspective. If you hire well, these occurrences seldom result from negligence or ill will. And if they do, you can mentor people to bring more attention and presence of mind to what they're doing. This builds trust, strengthens the relationship and preserves the team members' desires to take the risks that will eventually succeed.

Related: Why Your Employees Need to Make More Mistakes

Wavy Line
David Hassell

CEO and Founder of 15Five

David Hassell is the founder and CEO of 15Five, a leading employee engagement solution that helps create high performing teams by combining pulse surveys, weekly check-ins, peer recognition, and people analytics all in one platform. 

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