On the right side of the image, a young woman sits at a desk with one hand to her forehead and a concerned look on her face. She writes something in a notebook. Beside the notebook is a calculator; elsewhere on the desk are an open laptop, a teal mug, and a stack of small white cardboard boxes with turquoise labels. The room behind the woman is large and white, with another desk in the background holding more boxes with turquoise labels. Also in the room are a dress form and a clothing rack, both holding clothing in various shades of white and pastel blue.
Although failure can be an opportunity to learn, dwelling too long on one incident can stifle future innovation and personal growth. — Getty Images/ChayTee

Setbacks happen in business. Many leaders and entrepreneurs view failure as an opportunity to learn. Reframing failure as a stepping stone to success can help position your business for growth, boost employee morale, and stay on track to reach your goals. Try these strategies to shift your perspective and learn from your next obstacle.

Separate failure from fault

Learning from failure can only happen if the incident is acknowledged. Unfortunately, at many companies, failure goes unreported — and therefore unexamined. Partially, this is because failure and blame often go hand in hand.

“Every child learns at some point that admitting failure means taking the blame. That is why so few organizations have shifted to a culture of psychological safety in which the rewards of learning from failure can be fully realized,” wrote Harvard Business Review.

Failure can happen for a range of reasons, from “deliberate deviance” — someone purposefully violating a company policy or practice — to trying something new and innovative that doesn’t quite work. Recognizing that certain types of failure are blameworthy while others are praiseworthy is the first step towards creating an environment that’s open and honest about failure.

Classify the setback

Blame and fault-finding can stifle learning. Create a framework for failure that helps you respond in the moment whether a mistake requires reprimanding or deeper diagnosis.

Professor Amy C. Edmondson of Harvard Business School classifies failure into three categories: preventable, complexity-related, and intelligent. Preventable failures occur when employees deviate from instructions or company processes. “The best way to hedge against preventable failure is through regular training,” wrote Forbes.

Complexity-related failures describe situations where an employee has to deal with unique circumstances and make a judgment call. For instance, triaging patients in an emergency room, ringing up sales when the Wi-Fi is down, or adapting your operation to a new regulation can all be instances where your team faces failure. These types of challenges are great learning opportunities.

Accepting failure and rallying your team to grow reinforces the idea that failure is part of innovation.

Finally, intelligence-related failures are the result of a team trying to innovate. “Failure may result from experimenting with new technology, strategies and products or from trying to reach new markets. Organizations should strive to make intelligent failures quickly and without jeopardizing their financial positions,” wrote Forbes.

[Read more: Wellness Practice Owner Shares How 'Failure Creates Opportunities']

Dig deep into the root cause of the failure

Classifying failure enables you to dig deeper into the root cause of the incident. Go beyond the surface-level issue. If someone didn’t follow company procedures, why not? “Motivating people to go beyond first-order reasons (procedures weren’t followed) to understanding the second- and third-order reasons can be a major challenge,” wrote Edmondson in Harvard Business Review.

Bring together a group of people from different parts of the organization to figure out how to learn from a setback. Having multiple perspectives in the room can help you get a more nuanced, detailed view of what could be improved. It also encourages open conversation and a culture of thinking of failure as a positive opportunity.

Keep it moving

Failure can be painful, even if your team adopts a growth mindset. Spending too much time dwelling on what went wrong has the potential to stifle future innovation.

“Fail fast, analyze, learn and move forward. Not getting bogged down by failures and accepting that failure is one of the most powerful opportunities to learn and grow faster is key,” said Neha Kesarwani, a Consultant and Co-founder of Vertoe.

As you move on, make sure you’re allocating the resources required to prevent a complex or preventable failure from repeating itself. Support your team after diagnosing the problem to show that failure is to be treated openly and honestly. This final strategy also normalizes failure as part of your business cycle. Accepting failure and rallying your team to grow reinforces the idea that failure is part of innovation. Innovation is the best possible outcome from a setback!

[Read more: 7 Famous Entrepreneurs on Their Biggest Failures]

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