“A productive failure is one that leads to insight, understanding, and thus an addition to the commonly held wisdom of the organization(Nadler, 1989).” When organizations face a situation where they don’t know where to turn, productive failure can be a process of narrowing down that answer. If one strategy or approach fails, that may get the organization closer to the best fit solution. A productive failure would not be something that was recognized due to laziness, inorganization, or misconduct.

A company I have worked for in the past created a new division that had a focus of sales that included dealing with clients personal information. The organization was going to allow employees in charge of the sale to work remotely. That change initiative was a failure because the target market of clients did not want to provide their information via telephone or via WebEx. Things like bank account information, social security information, 401k accounts, as well as personal contact information were all included and in hindsight I realize I would not want to go through with a transaction like that myself unless it was in person. The way that organizations bounce back from a failed organizational change initiative will determine whether the organization fails or recovers. Since the first-hand experience I witnessed was with a large organization, this one new department wasn’t going to be the downfall of the organization. That organization actually made efforts to make that new division an in-person role so clients would feel more comfortable. I assume that division has completely dissolved by now unless there was a change in success in that department. In this situation, I would say the organization failed in this division but became stronger overall. They were able to check that new division off the list of trial-run divisions while most likely being able to allocate what money would have been spent in that department, to another.

References

Nadler, D. (1989, April).BUSINESS FORUM: MAKING CORPORATIONS SMARTER; Failures Can Be Productive.Retrieved from The New York Times: https://www.nytimes.com/1989/04/23/business/business-forum-making-corporations-smarter-failures-can-be-productive.html