Being OK with failure could be what's needed to take your organization to the next level, new research finds.
A study recently presented at the 2017 World Economic Forum in Switzerland revealed that letting employees know that failing on a task or a project isn't the end of the world can lead to increased sales and productivity.
"Failure, in the objective sense, is an event that happens in the course of trying to achieve one's goals," the study's authors wrote.
The study's authors believe that giving employees permission to fail helps keep their confidence levels high, even when they fall short at times.
"Our data supports the idea that confidence impacts workers' objective and perceived success," the study's authors wrote. "Our results are consistent with a confidence cycle, whereby confidence and success create a positive feedback loop."
The research found that employers that change the way employees think about failure have, on average, workers who are 30 percent more confident. The study's authors said that boost in confidence is what leads to performance gains. [See Related Story: How Successful Leaders Recover from Failure]
"When we punish failure, we dis-incentivize exploring new ideas, which can stymie creativity and limit success," Jason Schloetzer, one of the study's authors and a professor at Georgetown University's McDonough School of Business, said in a statement. "While many corporation executives, managers and team leaders tend to be risk-averse, this research could encourage them to rethink the way they approach business."
It takes more than just bosses telling their employees that it's okay to fail for workers to really grasp that not achieving the success they were looking for on a task is okay. The researchers said organizations have to create a culture around the thinking that failure can be a positive.
"Confidence is not a fixed trait, but rather it changes over time," said Catherine Tinsley, one of the study's authors and a professor at Georgetown University's McDonough School of Business. "It comes from weathering failure, and the organizational context will either help or undermine this process."
For the study, researchers surveyed more than 4,000 employees at multiple companies in the United States, Brazil and South Africa over a two-year period. Among one of the companies studied was Tupperware Brands.
The researchers discovered that at Tupperware, increasing employee confidence led, on average, to a 22 percent increase in sales.
When looking at all of the organizations analyzed, the study's authors found that employees who were more confident were also more optimistic about the future, more likely to think outside the box at work and more likely to overcome workplace challenges.
"Confidence has a specific and concrete impact on workers' economic successes, regardless of gender or country, which is beneficial to the employees, the business as a whole, and stakeholders," Tinsley said.
The study was also coauthored by Matthew Cronin, an associate professor at George Mason University School of Business.