What can businesses learn when things go wrong?
Failure has long carried costs and stigma, both personal and professional. In some business sectors, though, notably the technology industry, failure has become acceptable, even fashionable. It's inevitable that people who try new things will not always succeed. Fear of failure stifles creativity and innovation, advocates say. Bankruptcy has become a business decision, rather than a cause for personal shame, and it can allow firms to become stronger and more nimble. Nonetheless, critical oversights and bad financial moves still hurt entrepreneurs, shareholders, workers and communities. Among the questions under debate: Is failure good for the economy? Is failure necessary for long-term success? Are there cultural and regional differences in how people react to failure?
Gilson, Stuart, “Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups,” John Wiley & Sons, 2010. A Harvard University professor of business administration examines the process of corporate restructuring using case studies of prominent companies, including Delphi, General Motors and Kmart, as well as the Eurotunnel debt restructuring.
Kindleberger, Charles, and Robert Z. Aliber, “Manias, Panics, and Crashes: A History of Financial Crises,” Palgrave Macmillan, 2011. Two academics detail how poor money management historically has given rise to financial crises.
Sandage, Scott, “Born Losers: A History of Failure in America,” Harvard University Press, 2005. A cultural historian at Carnegie Mellon University explains how the meaning of failure changed from a business term to an identity marker for failed businessmen in 19th-century America.
Schoemaker, Paul J.H., “Brilliant Mistakes: Finding Success on the Far Side of Failure,” Wharton Digital Press, 2011. A researcher and business consultant illustrates how many products, from ATMs to smoke-free cigarettes to penicillin, were initially judged as mistakes yet turned out to be money makers.
Skeel, David Jr., “Debt's Dominion: A History of Bankruptcy Law in America,” Princeton University Press, 2001. A professor of corporate law at the University of Pennsylvania shows the political and economic roles in the United States' unique approaches to bankruptcy, from its inception in 1800 to the 1994 bankruptcy reform.
Tugend, Alina, “Better by Mistake,” Riverhead Books, 2011. Drawing on research and behavioral studies, a New York Times columnist shares lessons from aviation and medicine on how to respond to errors, and why it's important yet difficult to accept and learn from mistakes.
“The Failure Issue—Failure: How to Understand It, Learn from It, and Recover from It,” Harvard Business Review, April 2011, http://tinyurl.com/
Bradley, Ryan, “A Brief History of Failure,” The New York Times Magazine, Nov. 12, 2014, http://tinyurl.com/
Bruder, Jessica, “The Psychological Price of Entrepreneurship,” Inc. magazine, September 2013, http://tinyurl.com/
Elmer, Vickie, “A coming-out party for business failures,” Fortune, Oct. 21, 2013, http://tinyurl.com/
Gillett, Rachel, “What the Hype Behind Embracing Failure Is Really All About,” Fast Company, Sept. 8, 2014, http://tinyurl.com/
Lewis, Geoff, “Failure porn: There's too much celebration of failure and too little fear,” The Washington Post, Dec. 4, 2014, http://tinyurl.com/
Moules, Jonathan, “From failure can come success,” The Financial Times, Jan. 24, 2013, http://tinyurl.com/
Reports and Studies
Altman, Edward I., “Revisiting the Recidivism: Chapter 22 Phenomenon in the U.S. Bankruptcy System.” Brooklyn Journal of Corporate, Financial & Commercial Law, 2014, http://tinyurl.com/
Atkinson, Tyler, David Luttrell and Harvey Rosenblum, “How Bad Was It? The Costs and Consequences of the 2007–09 Financial Crisis,” Federal Reserve Bank of Dallas, July 2013, http://tinyurl.com/
Gompers, Paul A., et al., “Performance Persistence in Entrepreneurship,” Harvard Business School Working Paper, September 2008, http://tinyurl.com/
Lee, Seung-Hyun, et al., “How do bankruptcy laws affect entrepreneurship development around the world?” Journal of Business Venturing, September 2011, http://tinyurl.com/
Sonnenfeld, Jeffrey A., and Andrew J. Ward, “Firing Back: How Great Leaders Rebound after Career Disasters,” Harvard Business Review, January 2007, http://tinyurl.com/
Tian, Xuan, and Yue Wang, Tracy, “Tolerance for Failure and Corporate Innovation,” The Review of Financial Studies, Dec. 5, 2011, http://tinyurl.com/
The Next Step
Gleason, Stephanie, and Ted Mann, “GE Says Quirky Has Hurt Its Reputation,” The Wall Street Journal, Dec. 3, 2015, http://tinyurl.com/
Martin, Peter, “Free to fail in Malcolm Turnbull's new $1.1 billion innovation plan,” The Sydney Morning Herald, Dec. 7, 2015, http://tinyurl.com/
Schram, Lauren Elkies, “To Declare, or Not to Declare Bankruptcy?” Commercial Observer, Nov. 11, 2015, http://tinyurl.com/
Duarte, Daniel, “Journalist Andrés Oppenheimer Tells Latin America to ‘Create or Die,’” PanAm Post, July 15, 2015, http://tinyurl.com/
Nguyen, Hoang, “The entrepreneur teaching Japan how to take more risks,” BBC, Sept. 14, 2015, http://tinyurl.com/
Sheftalovich, Zoya, “EU pushes for business without borders,” Politico Europe, Oct. 28, 2015, http://tinyurl.com/
Guilford, Gwynn, “China's latest refusal to fix its state-owned companies is bad news for the global economy,” Quartz, Sept. 16, 2015, http://tinyurl.com/
Howitt, Peter, “Failures and job losses are integral to economic growth,” The Globe and Mail, Sept. 2, 2015, http://tinyurl.com/
Shane, Scott, “Is Declining Business Failure Holding Back Entrepreneurship?” Entrepreneur, March 11, 2015, http://tinyurl.com/
Griswold, Alison, “Startups With Shorter Names Are More Likely to Succeed, Study Finds,” Slate, Feb. 9, 2015, http://tinyurl.com/
Maney, Kevin, “In Silicon Valley, Failing Is Succeeding,” Newsweek, Aug. 31, 2015, http://tinyurl.com/
Voorhis, Dan, “Can Wichita get its entrepreneurial mojo back?” The Wichita Eagle, Dec. 12, 2015, http://tinyurl.com/
American Bankruptcy Institute
66 Canal Central Plaza, Suite 600, Alexandria, VA 22314
Membership-based institute that connects bankruptcy professionals and provides educational and research resources.
Business Plan Archive
3318 Van Munching Hall, College Park, MD 20742
Online archive at the University of Maryland's Robert H. Smith School of Business that contains business plans and other documents of failed dot-coms and technology companies from the 1990s, with access limited to research and educational purposes.
Conferences for start-up founders and others to discuss and study their past business failures to prepare for later success.
Grand Rapids, MI 49504
Group that organizes storytelling events around personal or professional failures.
International Failure Institute
Durham, NC 27708
Group of scholars, students, activists and artists seeking to understand the productive role of failure in learning and creativity by sharing stories, conducting classes and more.
Historical Bankruptcy Cases Project
4400 Massachusetts Ave., N.W., Washington, DC 20016
A research effort at American University that is working with the National Archives to digitize bankruptcy cases from 1898 to 1978 for scholars; also offers research projects such as the extent to which women and African-Americans were involved in early bankruptcies.
National Association of Consumer Bankruptcy Attorneys
2200 Pennsylvania Ave., N.W., 4th floor, Washington, DC 20037
Membership organization of consumer bankruptcy lawyers providing education, advocacy and some consumer resources.
The Success-Failure Project
5 Linden St., Cambridge, MA 02138
An effort of Harvard University's Bureau of Study Counsel to provide resources aimed at students to discuss success and failure in context and to explore their own definitions of them.
Turnaround Management Association
150 North Wacker Drive, Suite 1900, Chicago, IL 60606
Membership organization of corporate turnaround-industry professionals that provides educational resources and hosts events.
U.S. Bankruptcy Court
E. Barrett Prettyman U.S. Courthouse, 333 Constitution Ave., N.W., Washington, D.C. 20001
One of the 94 federal judicial districts handling approximately 1 million business, individual and other bankruptcy cases filed each year.