In November 2017, Jerry Xie, executive vice-president and corporate secretary of China Gold International Resources Corp. Ltd. (CGI), the only overseas-listed subsidiary of China National Gold Group (CNG), a Chinese state-owned gold company, was expected to report his plan for the future development of CGI to the chairman of the board of both CNG and CGI in a week’s time. CGI was perceived as the international flagship company of CNG and was listed in both Canada and Hong Kong, yet it had two mines in China and none in Canada. The parent firm needed Xie’s help to answer a question from the global capital market: should CGI be kept in operation in Canada?
Though some organizations recognize that learning from failure often leads directly to innovative products, processes, and services, discussing failure is often avoided in today’s business world. Failure is not just overlooked; it is routinely covered up. And when organizations are preoccupied with error avoidance, instead of error acceptance, innovation suffers because creative processes are inherently error-prone. Organizations have a choice. Instead of fearing failure, they can create a culture that accepts it, encouraging innovation through prudent risk-taking and exploration. So, how do you create a culture that “fails well”? Firms should: 1) create a culture of experimentation and creativity; 2) encourage risk-taking from the top; 3) celebrate failures like wins; 4) stimulate creativity and experimentation; and 5) hire entrepreneurs who are eager to learn. As innovation leaders, managers and organizations need to build a culture that removes the fear of failure and directs employees to learn, avoid mistakes, and pursue innovation through failing smart (maximizing learning with the expectation that failure will occur) and failing forward (taking the next step forward in the most efficient manner possible).
First appearing in China, physical platform crowdfunding is based on the basic formula used online by fundraising sites like Kickstarter, which is a symbiotic system between innovators, platforms, and investors. However, the new model combines these elements in a novel way in conjunction with the Internet and a physical business establishment, such as a café. In October 2013, 100 former students of Peking University formed the 1898 Café, the first crowdfunding café of its kind. It was established to serve the university’s entrepreneur alumni community and to stimulate the university’s entrepreneurial spirit. One of the most revolutionary features of the physical platform model is the concept of investors being members of the establishment, with each investor being a shareholder. The physical platform model emphasizes the equality of shareholders and takes advantage of the human desire to self-organize and self-manage. In this model, a physical establishment is the platform through which investors (shareholders) are sought and selected. That is, the platform, with a pre-specified focus, finds the investors—not the other way around. The second major difference is that the model is not simply about accumulating funds. The blending of investors, operators, and consumers in the business may have numerous applications beyond crowdfunding. Merging three traditionally separate business factions and pooling resources among them makes it possible to efficiently generate business results and do big things with little money. This model could prove revolutionary for existing businesses and industries looking for a different way to operate. A company that adopts it could drastically reduce its start-up risks and better ensure survival beyond the initial self-funded period.
Errors happen more often than employees admit, so smart organizations proactively encourage reporting while seeking to maximize beneficial learnings. This article looks at the balance that needs to be found between discouraging mistakes and learning from them. Combining error prevention and error management can be difficult. After all, while error prevention typically views all errors as unacceptable, error management emphasizes constructive responses such as learning. While people tend to view wilful violations of rules as unacceptable, honest mistakes are often seen as acceptable. As a result, in order to build a just and accountable error management culture, it is imperative for managers and organizations to bring clarity to what is forgivable and what is not while also facilitating error reporting among employees. Honest mistakes can be divided into chance occurrences (bad luck); actions of others; lapses of attention; and well-intentioned mistakes. Honest mistakes, when reported, present valuable opportunities for organizational learning and better control of errors through the examination of contributing factors and processes. The authors’ data reveal that key sources of honest mistakes range from individual actions and choices (e.g., intentionally not following accepted or best practices) to process or system factors that are under the control of management (e.g., lack of attention due to workload pressure).
Linlin Chen, a sales manager at Allnation Import and Export Co. Ltd. is in her office looking at the revenue reports for her sales in the past three months. Her numbers are very good, and she knows she is about to be rewarded with a promotion and the opportunity to become a shareholder in the company. Chen has been thinking about becoming an entrepreneur for some time. As she weighs in the risks and the opportunities, she realizes that she needs to make a decision within nine days when she will be asked to become a shareholder in the company.