Preface

It is hard to define success and failure easily. This is not only because each person has different criteria for judging success and failure, but also because there are two paradoxes: The first paradox is that failure can beget a success in the future. The second para- dox is that success can lead us to a failure. We encounter and respond to these two paradoxes in our daily lives. If we cannot perfectly avoid living in this paradox and irony of success and failure, how can we respond more actively to these paradoxes?

As an attempt to answer the above question more systemati- cally, this study has been conducted since 2010. The authors used the grounded theory approach to analyze many cases and prior studies, and thereby we wanted to find common concepts and systematic patterns of dimensions in the data. As a result of the analysis, we created and proposed two concepts: Failure Management (FM) and Success Management (SM). In short, failure management is ‘the method of systematically recognizing and using the benefits of failure, and success management can be defined as 'the method of systematically recognizing and preventing the harmfulness of success (i.e., the state in which reality is inferior to the goal or expectation).’

Through the above work, the authors published three articles over the years through Organizational Dynamics, an English aca- demic journal (SSCI) that focuses on the readers such as manage- ment leaders, practitioners and MBA students. This book is a compilation of the three published papers and an additional chapter for readers who have little chance to access academic journals.

The contents presented in this book are common sense that has already been widely discussed by many scholars and front-line managers and experienced by ordinary people. Rather, the biggest advantage of the framework presented in this book would be the words ‘failure management’ and ‘success management.’ Even if you don’t know or remember the specific principles or examples of the framework introduced in this book, it would be beneficial just to remember and live with the two new terms, ‘failure management’ and ‘success management.’ Because these terms provide a new lens or frame for us to look at the world.

This study was conducted mainly on cases in the field of enterprise management, but we believe that the framework of failure management and success management will be applicable in various fields of individuals and society. We hope this book will be a small reference for those who pursue ‘dynamic sus- tainability through paradoxes.’

Acknowledgment

The research in chapters 2 and 3 of this book was conducted with the support of the Ministry of Education of the Republic of Korea, the National Research Foundation (NRF-2016 S1A3A2924956), and the KDI School of Public Policy and Management. The research in Chapter 4 and 5 was conducted with the support of the KDI School.

I would like to express my gratitude to the editors and the anonymous reviewers of Organizational Dynamics and also to Pakyoung-sa for allowing the publication.

I truly appreciate Reverend Kwak Sun-Hee for inspiring failure management and success management, my beloved family members for showing me the model of failure management and success management in real life, teachers, colleagues, and everyone who shared wisdom at many seminars.

Junesoo Lee,
on behalf of the authors

뉴욕주립대학교(SUNY at Albany) 비즈니스 스쿨의 교수이며 사회적 기업의 발전 및 이해를 위한 센터(CAUSE)의 창립 이사이다. 콜로라도 대학(University of Colorado)에서 전략경영 박사 학위를 받았고 사회적 기업가 정신, 환경적 지속가능성 및 기업 지배 구조에 대해 연구를 하고 있다. 최근에는 ‘사회적 기업가 교육: 사례, 연습 및 주석(책임 경영 교육의 원칙)’을 공동 편집했다. 마이싱 교수는 상해 푸단 대학(Fudan University)의 풀 브라이트 강사였으며, 다수의 상과 표창을 수상하고 학술지 심사위원으로 활동하고 있다.

CHAPTER 01

How entrepreneurs can benefit from failure management ··· Junesoo Lee, Paul Miesing

BENEFITING FROM BUSINESS FAILURES 1
Why We Learn from Failure _2
How We Learn from Failure _3
What We Learn from Failure―A Retrospective View _4
How We Use Failure―A Prospective View _5
TOWARD FAILURE MANAGEMENT 6
A FRAMEWORK FOR FAILURE MANAGEMENT 8
Definitions and Concepts _8
Propositions _10
FAILURE MANAGEMENT VS. OTHER MANAGEMENT TOOLS 22
CONCLUSION 24
SELECTED BIBLIOGRAPHY _26
Appendix A. Failure management propositions _29
Appendix B. Risk, crisis, and failure/success _30

CHAPTER 02

Making hindsight foresight: Strategies and preparedness of
failure management ··· Junesoo Lee

INTRODUCTION OF FAILURE MANAGEMENT 33
ABOVE AND BEYOND FAILURE MANAGEMENT 34
Q1. WHAT STRATEGIES CAN WE CREATE TO USE FAILURE
RETROSPECTIVELY AND PROSPECTIVELY? 36
Factor One: How Do We Respond to Failure? _36
Factor Two: What Opportunities Do We Get from Failure? _37
Spectrum of Retrospective and Prospective Strategies of Failure Management _40
Four Strategic Options for Dealing with Failure _41
Q2. HOW CAN WE ASSESS HOW WELL WE ARE PREPARED TO
USE FAILURE? 46
Five Common Stages for Learning through Failure _47
Factor One: Do We Anticipate Failure in Advance? _48
Factor Two: Are We Aware of the Benefit of Failure in Advance? _49
Three Types of Preparedness of Failure Management _49
Contexts in Which the Three Types of Preparedness are Used _54
FAILURE MANAGEMENT: WORKING WITH A BLESSING IN DISGUISE 56
SELECTED BIBLIOGRAPHY _58

CHAPTER 03

Success management: Dynamic sustainability beyond harms of success ··· Junesoo Lee, Seung-Joo Lee

SUCCESS, AN IMPEDIMENT TO SUSTAINABLE MANAGEMENT 61
HARMS OF SUCCESS I: INTERNAL DECISION-MAKING BIAS 62
Cognition _63
Aiming _65
Reasoning, Attribution _66
Internal Network _68
Investment _70
HARMS OF SUCCESS II: EXTERNAL BACKFIRE 73
Customers _73
Intermediaries (suppliers, partners) _74
The General Public _75
Adversaries (regulators, competitors) _76
TOWARD REMEDYING THE HARMS OF SUCCESS 77
Organization-based Objectives of SM _78
NOUNS of Organization-based Management : Strategy and Validation (S&V) _79
ADJECTIVES of Organization-based Management : Characteristics/Directions of S&V _80
SUCCESS MANAGEMENT THROUGH FAILURE MANAGEMENT 90
SELECTED BIBLIOGRAPHY _93

CHAPTER 04

Balanced SWOT: Revisiting SWOT analysis through failure management and success management ··· Junesoo Lee, Seung-Joo Lee, Kwon Jung

REVISITING SWOT ANALYSIS 95
FAILURE MANAGEMENT & SUCCESS MANAGEMENT 97
Failure Management (FM) _98
Success Management (SM) _101
MAKING SWOT ANALYSIS BALANCED THROUGH FM & SM 104
FAILURE MANAGEMENT & BALANCED SWOT ANALYSIS 105
Dealing with the Positive Impacts of Failure _105
Case 1: iPhone 4S _107
Case 2: Post-it Notes _108
Case 3: Space Race _109
Case 4: Judo Management _111
SUCCESS MANAGEMENT & BALANCED SWOT ANALYSIS 113
Dealing with the Negative Impacts of Success _113
Case 1: CVS _114
Case 2: Tesla _115
Case 3: Costco _117
Case 4: Winston Churchill _118
BALANCED SWOT ANALYSIS FOR WINDOW OF OPPORTUNITY 120
SELECTED BIBLIOGRAPHY _122

CHAPTER 05

Paradox Management: Challenges and alternatives of
organizations’ failure-success management
··· Junesoo Lee

INTRODUCTION 123
MANAGING ORGANIZATIONAL PARADOXES: FAILURE-SUCCESS MANAGEMENT 124
Failure Management (FM) _124
Success Management (SM) _125
CHALLENGES OF ORGANIZATIONS’ FAILURE MANAGEMENT 127
Failure Is Not an Option _128
Failure Is a Virtuous Evil _129
We Have Diverse Definitions of Sustainability _130
We Have Diverse Definitions of Justice _130
CHALLENGES OF ORGANIZATIONS’ SUCCESS MANAGEMENT 131
We Lack Organizational Learning _132
We Overdo Organizational Learning _133
Your Success Management Is None of My Business _134
My Success Management Is None of Your Business _136
ALTERNATIVES FOR ORGANIZATIONS’ CHALLENGES OF
FAILURE-SUCCESS MANAGEMENT 137
Alternatives for the FSM Challenges: 5W1H Approach _137
FSM Platform for Knowledge (Holistic) Creation _141
FSM Platform for Knowledge (Passive) Sharing _143
FSM Platform for Knowledge (Active) Transfer _144
FSM Platform for Knowledge (Systematic) Application _146
CONCLUSION: DYNAMIC SUSTAINABILITY THROUGH PARADOXES 148
SELECTED BIBLIOGRAPHY _150

Epilogue _153
Index _155