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Rewarding Failure: How Udacity Separates Truth From Nonsense

Andy Cook on March 7, 2018 · 2 minute read
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The leadership team at Udacity takes the idea of instilling a growth mindset based on experimentation quite literally. Co-founder Sebastian Thrun, for example, hands a bottle of wine from his personal wine cellar to anyone who tries out a good idea that fails. And Udacity’s “champagne fridge” opens not only to celebrate big launches but also to celebrate un-launches of products the team decides to sunset before they see the light of day.

In this episode of Org Uncharted, we talked to Kathleen Mullaney, VP of Careers and People Ops at the online education company Udacity, about how the company has implemented a culture of growth through failure and learning.

We discussed the details behind the process, actual applications and examples of rewarding failure to encourage growth, and an approach to getting naysayers onboard with a culture of failure and growth.

If you want to succeed in business or life, Kathleen advises, you must adopt an important growth-mindset motto:

“Screw up, don’t freak, and learn.”

In theory, it sounds good. But when it comes to practical application, can you really screw up without freaking out about it? Can you really afford to make mistakes in your business or work on the expectation that you’ll learn something new that may help you grow?

The answer is yes, but only if you take a strategic approach to this growth-learning by rewarding failure.

“Rewarding failure means reassuring people that they’re not going to be penalized for mistakes.”

Udacity’s unusual celebrations with wine and champagne highlighted above are only two tactics in a much larger plan that supports and nurtures a growth culture at the company. The team’s overall strategy for rewarding failure rests on three foundational principles that encourage experimentation and failure (through the right channels and with appropriate risk management) as a part of learning and growth:

  1. Show a culture that rewards failure. Simply telling your team that you applaud experimentation isn’t going to help build the level of trust needed for people to try and fail. Especially if, despite what you say, you reprimand failed attempts either verbally or through actions. To earn your team’s trust, you first need to demonstrate a culture that values learning from mistakes.
  2. Establish a common shared vocabulary around risk-taking. Not all risks will deliver great lessons. And some risks can simply be avoided through discussion of past experiences. By creating a common vocabulary around risk-taking, you create a mechanism that your team can use to explore new ideas fully before jumping in. What’s the protocol or ritual for your team to evaluate new opportunities?
  3. Recognize small improvements. The worst thing you can do is not experiment. The second-worst thing you can do is set up an experiment that puts your entire business in jeopardy. Experiments should be small and serve specific goals. If the experiment works, you can expand accordingly. If it fails, you can take the lesson and add it to your collection of “things learned” to keep building your growth trajectory.

Click play to listen to Kathleen’s insight and advice, and don’t forget to subscribe to Org Uncharted on your favorite podcast player for more insightful conversations with innovative business leaders of all walks and stripes.

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👋🏾 CEO at Tettra. Tall & bearded. Loves cooking, reading, learning new things and helping others. Previously worked at HubSpot and cofounded Rentabilities.