Post‐Failure Success: Sensemaking in Problem Representation Reformulation

Abstract

Failure is an inevitable feature of innovation, and management research promulgates the importance of learning from it. Key to excelling at an innovation-based strategy is understanding the processes that can turn failures into successes. However, post-failure success remains elusive. Although failure signals that the innovation journey is off course, shifting trajectory is difficult, because it may require revising assumptions and reformulating the project's problem representation. Using comparative case studies, this study set out to understand how problem representations are reformulated. Employing case method and comparing data versus theory iteratively, the important role of sensemaking and of leadership behaviors in driving post-failure success became salient. Findings show that problem representations post-failure require a process of problem formulation characterized by sensemaking and that innovative solutions are enabled by the reformulation of problem representations that spring from prospective sensemaking. Furthermore, this article identifies leadership change behavior as the linchpin driving a problem formulation process characterized by prospective sensemaking that catalyzes innovative solutions and explains why some projects thrive post-failure and others do not. This article provides empirical support to the theoretical work of the literature on problem formulation, while extending the learning-from-failure literature by emphasizing and demonstrating the process driving post-failure success. The major implication of our study is that different leadership behaviors may foster different types of sensemaking (retrospective or prospective), and that, in turn, the type of sensemaking matters for how a problem is reformulated. Ultimately, this article concludes that in the context of project failure, problem reformulation that springs from prospective sensemaking enables innovative solutions post-failure. Practitioner Points • Managers must learn from and capitalize on innovation failures because the penalty for not doing so can be high. • Turning failure into success requires first, a culture of normalizing of failures when innovating, and, second, a process of problem formulation characterized by sensemaking that is both retrospective and prospective. • A project's problem representation post-failure must be socially constructed and creatively reformulated to help turn failures into success. Leadership behavior that emphasizes change is particularly important in this process.

Project managers' reactions to project disruption: sponsor actions versus environmental uncertainty

“…Our study suggests that project sponsors' non-collaboration creates negative responses from those in charge of managing the project. Importantly, however, we caution senior management not to assume that established post-disruption techniques like learning from disruption or problem reformulation (Morais-Storz et al. , 2020; Shepherd et al.…”

“…, 2013), we know relatively little about post-disruption attribution processes. The literature has focused on learning and recovery, implicitly assuming that staff will be sufficiently motivated (Howick and Eden, 2007; Morais-Storz et al. , 2020).…”

“…We positioned the scenario in an innovation and product development project setting, similar to many project management studies (e.g. Morais-Storz et al. , 2020; Shepherd et al.…”

“…We positioned the scenario in an innovation and product development project setting, similar to many project management studies (e.g. Morais-Storz et al, 2020;Shepherd et al, 2009;Shepherd et al, 2014). Second, we developed a series of vignettes, including one common module and four experimental cue modules that capture different levels of uncertainty.…”

The human side of innovation management: Bridging the divide between the fields of innovation management and organizational behavior

“…Integrating these areas of inquiry is important, though, given the many and decisive challenges today's organizations and the people working for them experience in the pursuit of innovation. This relates to aspects such as increasing pressure to innovate due to global competition (Schubert et al, 2018), enhanced time pressure due to shortening development cycles (Baer & Oldham, 2006; Griffin et al, 2019), an increasingly diverse workforce (Weiss et al, 2018; Zhan et al, 2015), increased blurring of industry and project boundaries (Mortensen & Haas, 2018; Whalen, 2018), as well as a higher probability of the occurrence of errors, setbacks, and failures (Lei et al, 2016; Morais‐Storz et al, 2020; Todt et al, 2018).…”