Why Failure Can Be Your Greatest Competitive Advantage If You Treat It Right

At Amazon, when the much-publicized Fire Phone ended in commercial disappointment, many people expected heads to roll. Instead, the team responsible was reassigned to work on other major innovations—including what would become Alexa and Kindle projects. While the company took a $170 million hit, CEO Jeff Bezos used the occasion to double down on public messaging: failure that produces useful knowledge drives long-term growth. Not only were careers saved, but Amazon's internal innovation engine was stoked with hard-won insights that set up future hits.

This approach wasn't limited to high-flying startups or mega-corporations. At GE, similar practices began turning isolated losses into seeds for breakthrough products. One GE team ran a low-cost MVP that proved their major product plan wouldn't work—saving the company millions it would have sunk into full-scale failure. Crucially, these teams weren't punished for missing performance forecasts; instead, growing a culture where learning from what doesn't work is seen as a badge of honor.

Behavioral science shows that organizations wired to reward honest, evidence-based learning (rather than perfect performance) end up solving harder problems and adapting faster over time. Removing the stigma of failure opens the door to more frequent experimentation, authentic idea sharing, and the agility to pivot away from costly dead ends. In fast-changing markets, that's where long-term champions are made.

When the next project or idea stumbles, don't sweep it under the rug or assign blame. Instead, call your team together and celebrate what you dared to try, dissect the outcome with curiosity, and log every lesson so no one repeats the same mistake. If you lead others, hand out public praise or even small rewards for those who run bold experiments and share back what they’ve learned—regardless of the results. See failures as a treasure map: each one points to something critical you didn’t know before. Next time something falls flat, remember—this is where your advantage begins. Take a deep breath, write down what you discovered, and decide as a group how you’ll use it to get stronger.