In a sophisticated and hyper-connected business world, certainty is hard to come by. This affects businesses in various ways, especially the leadership of those organizations that must constantly innovate to differentiate themselves and achieve and maintain success.

In this context, it is strategically important to understand how to practically deal with failure, which is a common and natural phenomenon in the daily life of any business.

When it comes to failure, time is an important variable. "Failing fast" means learning faster. This is because by quickly recognizing that you are going in the wrong direction, you can stop the process, interrupt the generation of waste and redirect your energy, time, work and resources to seek a new, better path. Such a turnaround can optimize results and provide highly relevant lessons.

"Fast failure" should be encouraged (and never punished) if it is followed by course corrections and lessons learned. But there is a caveat: For this to really work, leadership must lead by example. They must be the first to not mind taking responsible risks, and make it clear that it is fine to make mistakes if they produce "smart failures."

For this to really work, the relationship between leaders and followers must be based on a great deal of trust and mutual respect. This is not so easy to achieve in daily practice, which is often fraught with stress and personal disputes. Yet it is the only way to create an environment in which exposing and solving problems becomes natural - the basis of Lean Thinking. Conversely, when the environment is characterized by blaming, punishing and attributing mistakes to people rather than processes, trust cannot be achieved and the organization begins to experience a climate of fear.

Such excessive focus on hierarchy and command-and-control is one of the biggest mistakes of companies that follow traditional management thinking. It will result in problems being swept under the rug and employees lacking psychological security (which, in Timothy Clark's model, consists of four elements: feeling included, learning, contributing and challenging the status quo).

From the perspective of innovation, a traditional fear-based organization will not be able to reap the benefits of diversity, safety and transparency. Team engagement will be lost, their full potential will go untapped and "more of the same" will be produced.

In light of all this, we believe there is a need to rethink failure within organizations. It should be seen as a real and powerful opportunity to learn, improve and innovate both individually and collectively. This, for example, is the experience of Isao Yoshino (as told by Katie Anderson in her book Learning to Lead, Leading to Learn, recently published in Portuguese by Lean Institute Brasil): during his 40 years at Toyota, his failures became a source of knowledge and management evolution. As Yoshino says, "failure is not failure if you learn something important that you could never have learned otherwise."

Toyota's practices - which are the foundations of a Lean system - have always moved in this direction. At Lean , a leader believes that no one goes to work with the idea of doing a bad job (quite the opposite, in fact). However, processes (which people probably did not create themselves and have little to no power to change) can quickly go from good to problematic, from stable to unstable, and this is what generates failure.

In their daily practice, leaders should ask "why" more often than "who." This not only avoids the dangerous habit of blaming people, but it also helps the team understand the root causes of the problems or mistakes that mar the process. A lean attitude encourages people to be open to spotting and solving problems and promotes learning. This in turn enables more improvements and more innovation, gradually involving more and more people. It is what makes organizations that are lean at their core competitive in their respective markets.

So how is lean leadership different? The mindset of a lean leader is almost like that of a student, in that it is based on the idea of "knowing that I don't know everything." Therefore, it inherently encourages them to try to understand problems and find solutions, to be vulnerable (they fail just like everyone else) and to always strive to learn from mistakes without blaming people.

Lean leaders are both learners and teachers. They are responsible for challenging their people to develop their competencies by solving problems, supporting them in doing so, and tapping into their potential to continuously improve their work. This is done by giving teams a full understanding of their purpose, goals and objectives and by encouraging collaboration and teamwork.

The prerequisite for lean leadership is active and enthusiastic listening, always being present at the gemba and developing an understanding of the work.

In short, a lean leader "sets the tone and invites participation," in the words of Amy Edmondson. Their humility (putting themselves in the position of learners and acknowledging their own shortcomings) encourages the team to contribute, to dare and to learn, to break new ground in the pursuit of ever greater challenges and higher goals, and ultimately to contribute to the success of the organization.

In 2024, as in any other year, structural challenges will be part of your daily life at work. We encourage you to think during the vacations about your relationship with your people and how to improve it. This is your path to leadership success in the future!

The authors

Flávio Battaglia is President of Lean Institute Brasil

Luciana Gomes is project manager at Lean Institute Brasil