NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

In business, failure is part of the game, but this reality is often taboo in the social sector. At Root Cause, Phil Buchanan of the Center for Effective Philanthropy, provided his thoughts on the importance of “learning from history” from successful philanthropic cases. But just as importantly, it is critical to learn from failures where examples are often more difficult to identify. Read about learning from philanthropic failures on Phil’s post.

The idea of embracing failure emerged in several discussions across the 2011 Harvard Social Enterprise Conference. Rebecca Onie, Co-Founder & CEO of Health Leads spoke about the need for leaders to have “an appetite for failure.” The process of learning, according to Ms. Onie, invariably entails accepting mistakes and actively questioning the validity of your venture model.

In the panel, Survival of the Fittest: Leadership and Scaling Up, participants zeroed in on the key attributes of leaders who drive scale in the social sector, and often agreed that embracing failure is critical. Moderated by David Ager, a faculty member at Harvard Business School, the panel hosted entrepreneurs including Sadaffe Abid, a former CEO of Kashf Foundation in Paksitan, Rebecca Onie, Co-Founder & CEO of Health Leads, and Caleb Shreve, Executive Director of Global Fairness Initiative (GFI). In addition, Mandy Taft-Pearman of Bridgespan Group brought her wealth of expertise as a management consultant assisting organizations and initiatives to achieve scale.

As they are all leaders themselves, the entrepreneurs initially shifted the focus from leadership to discussing the concept of scaling and the operational challenges associated with it. The distinction between scaling organizations and spreading ideas made by panel members reflected the spectrum of scaling mechanisms from dissemination, affiliation, to branching, all articulated in Greg Dees’s 2004 SSIR article on Scaling Social Impact. (Read the latest book on Scaling Social Impact released by P. Bloom and E. Skloot at Duke University).

As the discussion dove deeper into the qualities of successful leaders to grow organizations, a consensus emerged among the diverse panelists. All participants emphasized the importance of creating a moment of reflection to capture the learnings, both from successes and failures. Mr. Shreve recounted how a hastily launched initiative driven by external pressures “diluted the organization for a moment,” and he had to “eventually resell the message that we are an economic empowerment organization.” The rebranding effort forced GFI to reassess its core competencies and form partnerships in areas outside of their core strength. This type of reflection is not as easy as it seems. For an entrepreneur managing a growing organization, “the hunger to be action oriented is insatiable,” emphasized Ms. Onie. Despite the urge to execute, all panelists agreed that moments of reflection like Mr. Shreve’s were critical to their organizations’ success.

As we think about successful entrepreneurs in the BOP context where economic and political instability often disrupt the organizations, persisting despite headwinds and challenges is even more critical. Blair Miller from Acumen Fund describes this resiliency in a post; “the leaders of our time must handle this complexity both in its beauty and in its sadness.” Amid hardship and failure, the true leader reflects and persists.