Giving Permission to Fail Motivates Increased Sales and Productivity

Awarding annual bonuses and paying employees based on goal achievement have long been considered the main way to motivate performance, but there could be another way to increase productivity in the office.

Research presented at the 2017 World Economic Forum in Davos, Switzerland, finds that giving employees permission to fail can increase confidence and lead to increased sales and productivity in the workplace. This study, “Cultivating the Confidence Cycle,” was conducted over a two-year period, across genders, and with multiple companies in three different countries (Brazil, South Africa and the United States).

At Davos, Catherine Tinsley, the Raffini Family Professor of Management at Georgetown University’s McDonough School of Business and academic director of the Georgetown University Women’s Leadership Institute, presented the results with Rick Goings, Chairman & CEO of Tupperware Brands Corporation. Cathy and her co-authors collaborated with Tupperware Brands to study data related to companies with a sales focus.

The study shows organizational cultures that re-position workers’ beliefs about failure have, on average, employees who are 30 percent more confident, which leads to performance gains.

“When we punish failure, we dis-incentivize exploring new ideas, which can stymie creativity and limit success,” said Jason Schloetzer, the William and Karen Sonneborn Term Associate Professor of Business Administration at Georgetown University’s McDonough School of Business. “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.”

The research team, which also includes  Matthew A. Cronin, an associate professor of management at George Mason University School of Business, emphasize the importance of organizational culture in cultivating workers’ confidence. Messages to reframe and disempower failure cannot just come directly from a supervisor, but from the organizational culture that conveys and reinforces the confidence-boosting message to employees.

“It is not about personality,” Tinsley said. “Confidence is not a fixed trait, but rather it changes over time. It comes from weathering failure, and the organizational context will either help or undermine this process.”

The study shows setbacks can be a launching pad for success, leading to more productivity and improved problem-solving skills, and inspiring employees to think innovatively and positively. Additionally, increasing employee confidence through such tactics as conveying motivational messages from the organization results in a greater likelihood of individual business success. For instance, the study found that at Tupperware, increasing employee confidence led, on average, to a 22 percent increase in sales. Across multiple companies surveyed, workers who were more confident were also more optimistic about the future, more likely to be innovative at work, and more likely to overcome challenges in the workplace.

“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. 

A press release summarizing the research findings can be found on the Tupperware Brands website.