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Embracing the "F" Word
By Dana Karaffa and Andrew Keegan

This is an article about the “F” word. Some people may consider it a dirty word, but we don’t. If the “F” word offends you, we encourage you to skip this article and read any of the other well-written pieces in this edition of the Quarterly. We hope you’ll stick with us though, because we believe the “F” word should be celebrated. Especially by auditors. And especially in an edition of the Quarterly dedicated to creativity and innovation. Because we can’t hope to embrace those concepts without also embracing Failure.
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Embracing failure can be a difficult idea to accept. On one hand, failure is defined as the lack of success, and it should not be the goal or desired outcome. However, failure also offers a chance to learn and improve. So, while the act of failing may be bad, the experience of failing can be positive. However, experiencing failure doesn’t automatically result in future success. Our response when failures happen is what will ultimately determine our success.

In this article, we will identify three types of failure and outline how best to respond when failure happens. We will also discuss why auditors play an important role in getting our organizations to embrace failure, and how we can best help our organization when it experiences failure.


THREE TYPES OF FAILURE 

Research from Amy Edmondson, a professor at the Harvard Business School, classifies failure into three types: preventable, complex, and intelligent.

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Preventable Failures
Edmondson says preventable failures are the worst type, because they happen when people aren’t paying attention or don’t follow routine procedures. Think about a cashier giving someone the wrong change, or documents missing required signatures. Edmondson believes preventable failures are the easiest to avoid though. (“Preventable” is right there in the name!) Training, checklists, and oversight can help people avoid these types of failures.

Complex Failures
According to Edmondson, complex failures are due to “the inherent uncertainty of work.” In other words, some tasks can’t be done by simply following a checklist. For example, when paramedics respond to a medical emergency, the specific details of the situation (the patient, location, and issue) are unique, and the person may not receive the appropriate treatment. Complex failures can end up being minor or serious, and Edmondson notes that serious failures often happen after several minor failures go uncorrected. Following best practices and correcting minor failures when they happen can reduce the likelihood of a serious failure.

Intelligent Failures
Edmondson considers intelligent failures to be the best type of failure, because they offer the greatest chance to gain knowledge and improve. Intelligent failures occur in operations where the “right” answer isn’t known. Running a pilot program to help people experiencing homelessness is an example of where an intelligent failure may happen. Although the pilot may not achieve the desired level of success, it can offer lessons and information that will make the next pilot more successful.

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OUR ROLE IN EMBRACING FAILURE

Some industries and organizations have been quicker to embrace failure than others. “Fail fast, fail often” is a common mantra among the Silicon Valley startup crowd. There was even a failure-themed convention for some time, which had the goal of helping “startup founders learn from and prepare for failure, so they can iterate and grow fast.” (The founders stopped holding the conference because they felt that celebrating failure had become too common. We hope you also appreciate the irony of a failure conference failing because it succeeded.)

Although failure has been the focus of a few articles in other government-related publications, the idea of embracing failure hasn’t been as readily accepted in the government sphere. This may be because government, often synonymous with bureaucracy and risk-aversion, is resistant to the concept. It might also be due to a misunderstanding about what it means to embrace failure. (To reiterate, thinking and acting as if failure is a goal probably won’t win much support from managers and customers.)

Failures can be beneficial though, and auditors must take the lead in encouraging our organizations to embrace failures when they occur. In fact, this might even be our main duty. Audits can help control for preventable failures, reduce the likelihood of serious failures in complex operations, and leverage intelligent failures to achieve success.


CREATING A CULTURE THAT EMBRACES FAILURE


As auditors, there are several ways we can help our organizations establish a culture of embracing the experience of failure.

Make it Safe to Fail
It is important to detect failure as early as possible, particularly before it has the opportunity to get worse. However, people may be reluctant to give bad news to bosses and colleagues, and they may avoid pointing out failures. Auditors can avoid that trap because of our position outside the normal management chain.

This position must be used carefully though. Since there are different types of failure, we shouldn’t treat them the same when they happen. Preventable failures are avoidable, and it might be suitable to call out management when they occur. On the other hand, complex and intelligent failures may be unavoidable when providing complex services or trying to innovate. In these situations, we should be less focused on establishing blame (the “bayoneting the wounded” stereotype) and more focused on encouraging open discussion of the how and why of the failure. The goal in these situations should be to help management learn from the failure and improve. According to Astro Teller, the CEO of X (formerly Google X), his teams “kill their [unsuccessful] ideas as soon as the evidence is on the table because they are rewarded for it. They get applause from their peers, and hugs and high-fives from their managers. They get promoted for it.” How we present failures in our audit reports and communication is key to helping establish an organization where people feel safe to fail.

Analyze Failure
People may be tempted to walk away from failure without attempting to understand what happened. However, it is crucial to analyze failures to understand the root cause. This may be difficult in some circumstances, though. For example, complex failures can often involve multiple departments within an organization. As auditors, we are in a unique position to both help our organizations identify root causes of failure through our audit findings and serve as a connection point between various parts of the organization.

Champion Experimentation to Learn and Innovate
Exceptional people and organizations are those that don’t just detect and analyze failures but also try to learn and innovate from their failures.

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It is also important to distinguish the concept of “failing” from “being a failure.” The first is a temporary event that presents an opportunity for learning and innovation, and the second is a mindset that means you or your organization has given up. A key to achieving success is to overcome the feeling of being a failure and remember that failure is not permanent. We can help set this mindset through the tone of our reports.


WRAPPING UP


It should never be the goal, but your organization will experience failures. However, through failure, people and organizations can learn lessons that will help them succeed. As auditors, we have a duty to help our organizations get comfortable with that idea. We must help our organizations learn to celebrate failure in a positive, productive, and constructive way by making it safe to fail, analyzing failures when they happen, and championing experimentation.

As Laura Arnold, one of the co-chairs of a foundation dedicated to improving scientific research, has said, “We’re not looking to create an organization of safe success. We’re looking to create an organization of thoughtful failure and fantastic success.” By helping our organizations correct preventable failures, reduce the likelihood of complex failures, and learn and innovate from intelligent failures, we put our organizations on the path to achieving fantastic success.


ABOUT THE AUTHORS

Andrew Keegan is an Assistant City Auditor for the City of Austin, Texas, where he has worked for 6.3722 years (approximately). During that time, he has led or managed audits on topics such as police oversight, homelessness, and traffic safety. One of his most recent failures involved trying to discreetly follow a City employee suspected of treachery.

Dana Karaffa
is a Senior Auditor with the City and County of Honolulu Office of the City Auditor and has worked there for nearly 3.5 years. Dana has 10 years of combined internal and government audit experience. One of her most recent failures involved missing a deadline.