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 Charles Schwab
is a world's leading financial services firm.
The company
revolutionized the way stocks are bought and sold.
David Pottruck,
a former CEO of
Charles Schwab, says: "The idea that
failure
is okay is ridiculous. I am
not going to go around the company and reward someone for failing. But here
at Schwab we differentiate between noble failure and stupid
failure."
Noble Failure
Charles Schwab has a set of
criteria for defining noble failure.
Noble failure occurs when:
-
you have a good plan and know
what you're doing, you've thought everything through carefully, and have
implemented with sufficient management discipline, that if you look back
in review, you'd conclude it was thoughtfully done
-
you have a reasonable
contingency plan to deal with any initial failure and the contingency
plan must have been implemented
-
you need to debrief yourself and
ask what you can learn from the experience that will lead your company
to be smarter next time.
Institutionalizing Celebration of Noble
Failure
Charles Schwab journals their
failures and lessons they've learned. They maintain also a display of failed
innovations and created a videotape for employee orientation. "When
celebration of noble failure becomes institutionalized, people within the
organization are more willing to reassess earlier decisions" and
take corrective measures.
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