Failure. It’s a word most business leaders try to avoid—something to mitigate, manage, or even deny. But what if we told you that the right kind of failure isn’t just acceptable, it’s actually essential? In her book The Right Kind of Wrong, Harvard professor Amy Edmondson invites readers to reframe their relationship with failure and recognise it as a powerful driver of progress, innovation, and long-term success.
Her ideas stem from decades of research in science and organisational behaviour. They offer direct, high-impact applications for business leaders trying to navigate today’s fast-paced, uncertain markets. The key is learning to expect and embrace a concept called intelligent failure.
Not all failures are created equal
Edmondson introduces a simple but powerful framework that categorises failure into three types:
- Basic failures are preventable. They result from oversights, miscommunication, or lack of attention to detail.
- Complex failures happen in unpredictable systems with many interacting parts.
- Intelligent failures occur when we try something new in a thoughtful, informed way, and provide opportunities for learning.
Scientists know this. In science, intelligent failure is how breakthroughs happen. Every ‘failed’ experiment provides useful information. However, in business, companies often penalise failure, which stifles experimentation, discourages initiative, and punishes curiosity.
Building success through failure
Business leaders often say they want more innovation. However, innovation involves risk, and that means failure is possible. Edmondson’s framework gives leaders permission to encourage experimentation without always expecting success. Companies like Amazon or Google use this approach. Many product launches are intentionally small-scale, designed to test hypotheses, and most will ‘fail’. However, those failures are not wasted because they provide information for the next iteration. To foster a culture of intelligent failure, you should ask teams to document what they have learned from projects, celebrate bold thinking and not just safe wins, and frame initiatives as experiments.
A cornerstone of Edmondson’s work is the concept of psychological safety. This means creating an environment where individuals feel safe to speak up, admit mistakes, and challenge ideas without fear of blame or embarrassment. This matters. Edmondson’s studies have shown that teams with high psychological safety make more errors. However, they also catch and correct them faster, and their performance is better overall. Teams that suppress or hide mistakes fall behind because problems fester and learning stalls. Leaders can model psychological safety by admitting their mistakes, encouraging questions, and responding to bad news with curiosity, not blame.
The other aspect of intelligent failure is to rethink success metrics. Most businesses reward outcomes. However, Edmondson says that it is also important to reward process and learning. If teams are only given credit for results, they avoid risk and go for safe wins. Instead, metrics should include whether the risk taken was calculated and justified, and whether new insights were obtained. This encourages a learning culture, and motivates teams to improve, iterate, and explore, not just preserve the status quo.
Preventing the wrong kind of wrong
Not all failures should be embraced. Basic and preventable failures—caused by neglect, carelessness, or a lack of proper systems—require attention and correction. Edmondson is clear: psychological safety is not an excuse for sloppiness.
It is therefore essential to differentiate the type of failure before reacting to it. This helps avoid blanket blame or unproductive fear, and instead promotes a more strategic, nuanced approach. For basic failures, you can fix the system or improve training. For complex failures, you should analyse the contributing factors and improve resilience. For intelligent failures? Capture the lessons and keep experimenting.
One of the most powerful things business leaders can do is normalise failure as something expected in the pursuit of excellence. In industries like healthcare or aviation, where the stakes are high, encouraging people to speak up early often prevents bigger, costlier disasters. That mindset saves millions and keeps quality high. Elsewhere, normalising intelligent failure can support creativity, build resilience, and attract and retain curious, ambitious people.
Leading from the top
Leaders set the tone in businesses. When they talk openly about their own failures, praise team members for trying something new, or show they’re more interested in progress than perfection, they can transform organisational culture. Organisations that thrive in uncertainty do not get everything right the first time—they just learn the fastest.
Failure is not the opposite of success, it’s part of it. In a rapidly changing world, if you’re not failing intelligently, you might not be trying hard enough.