The 3 Types of Failure and Why Celebrating Intelligent Failure is Essential for a Thriving Culture 🎉💡
Dr. Keydotta Crawford, DBA,SHRM-CP
Manager Total Rewards | SHRM-CP
Failure is often misunderstood. Many people fear it, avoid it, or worse—punish it. But failure is not just inevitable; it is a crucial driver of progress. The key is knowing which failures to avoid and which ones to embrace.
According to Harvard psychologist Amy Edmondson, there are three types of failure:
1️⃣ Preventable Failure – Mistakes that happen due to carelessness or not following known processes.
2️⃣ Complex Failure – Unexpected breakdowns in complicated systems where multiple factors interact.
3️⃣ Intelligent Failure – Thoughtful, well-designed experiments that push boundaries and lead to new learning.
Not all failures are equal. Some should be minimized, while others—especially intelligent failures—should be celebrated as a sign of innovation and progress. 🚀
In fact, the Chief Scientific Officer at Eli Lilly held “Failure Parties” to recognize mistakes that provided valuable learning opportunities. Instead of hiding failures, they were shared, analyzed, and celebrated—because each one brought the company closer to a breakthrough.
So, how can organizations move from a culture of fear of failure to a culture that thrives on intelligent failure? Let’s break it down.
The Three Types of Failure (According to Amy Edmondson) 🚦
1️⃣ Preventable Failure (Basic Mistakes)
These failures occur when rules, processes, or best practices are ignored or not followed correctly. They often stem from negligence, lack of training, or poor decision-making.
🛑 Examples:
🔹 How to handle it: Improve training, implement better systems, and hold people accountable for preventable mistakes.
2️⃣ Complex Failure (System Breakdowns)
These failures happen in highly complex environments where multiple variables interact in unpredictable ways. Even with the best preparation, some failures are unavoidable because they arise from uncertainty and interdependencies.
⚠️ Examples:
🔹 How to handle it: Instead of blaming individuals, analyze the system and identify what can be improved to prevent similar failures in the future.
3️⃣ Intelligent Failure (Innovative Learning Failures) 🎉
This is the type of failure we should celebrate. Intelligent failures happen when people take calculated risks in pursuit of innovation. They occur when an experiment is designed to test something new, and the results—even if unsuccessful—lead to valuable insights.
🔥 Examples:
🔹 How to handle it: Celebrate and share the lessons learned. Intelligent failures drive progress and should be rewarded. The faster an organization learns, the faster it innovates. 🚀
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Why Celebrating Intelligent Failure Creates a Thriving Culture 🎊
Too many organizations treat all failure as bad. This mindset leads to fear, risk aversion, and missed opportunities. But companies that embrace intelligent failure unlock creativity, agility, and long-term success. Here’s why:
🎯 1. It Encourages Innovation
Companies like Google, Tesla, and Amazon are constantly experimenting. Some ideas fail, but those failures fuel their greatest successes. When employees know they won’t be punished for taking smart risks, they think bigger and push boundaries.
📚 2. It Accelerates Learning
Each failure is a lesson. The faster an organization learns, the faster it improves. A culture that encourages intelligent failure turns mistakes into stepping stones, leading to faster iteration and progress.
🤝 3. It Builds Psychological Safety
Amy Edmondson’s research on psychological safety shows that employees perform best when they feel safe to voice ideas, admit mistakes, and take risks. If failure is punished, people stop innovating.
🛑 4. It Prevents Bigger, Costlier Failures
Small failures prevent disastrous failures. Companies that run small-scale experiments (A/B testing, pilot programs, prototypes) catch problems early before they become expensive mistakes.
🏆 5. It Attracts and Retains Top Talent
Talented professionals want to work in an environment where they can experiment and grow. If failure is met with blame, employees become risk-averse and disengaged. When failure is seen as learning, people feel empowered to contribute their best ideas.
How to Build a Culture That Celebrates Intelligent Failure 🎉
🔹 Clarify the Difference Between Failure Types – Teach employees to distinguish between preventable, complex, and intelligent failures so they know which to avoid and which to embrace.
🔹 Reward Learning, Not Just Success – Recognize and celebrate teams that take smart risks and extract valuable insights, even if the attempt didn’t succeed.
🔹 Encourage Small-Scale Experimentation – Allow teams to test ideas in controlled environments before making large investments.
🔹 Foster Psychological Safety – Leaders should share their own failures and demonstrate that learning from failure is part of success.
🔹 Analyze and Share Lessons – Instead of hiding failures, discuss them openly to ensure the entire organization learns and grows.
Final Thoughts: Reframe Failure as a Stepping Stone to Success 🚀
Not all failure is bad—but all failure teaches something. By distinguishing between preventable, complex, and intelligent failures, organizations can create a culture of learning, innovation, and continuous improvement.
Instead of fearing failure, the best companies embrace it, learn from it, and use it to fuel progress. Just like the Chief Scientific Officer at Eli Lilly did with Failure Parties, we should celebrate failures that push boundaries and lead to new discoveries. 🎉
The real question is not “Did we fail?” but “What did we learn?” 🔥