Fear of failure in a team drops when leaders treat mistakes as attempts to find the right way, and live that in everyday work. People in that kind of environment report problems earlier, because they don’t expect to be punished. That tolerance for mistakes is what makes decisions under uncertainty possible in the first place.
The term describes an organisation’s willingness to use errors as information, as long as they’re reported openly and analysed. With the constant change in companies, the need for it grows: Leaders have to take risks and decide without knowing beforehand whether the decision was a good one.
In many companies, a setback still counts as a personal failing. So the first thing after a mistake is uncertainty: How will the team react, and what will customers or business partners say? People dread pity or, worse, Schadenfreude.
Fear of failure makes people careful. Problems reach the table late, and ideas that might flop stay in the drawer. The error rate then looks good, while the pace quietly drops.
In my experience, leaders and employees alike want a more open way of dealing with mistakes. The wish alone changes little as long as the structures punish them. A lot depends on reputation here, because it rests on how others perceive you, and a competitive mindset that notes every misstep makes people cautious.
Put precisely: An openly reported mistake leads to analysis, and sanctions are kept for clear cases. Someone who gets sloppy with the accounts needs a different response from a team that tests a new product and gets it wrong.
Harvard professor Amy Edmondson distinguishes, among other things, between preventable failures in routine operations and intelligent failures in new territory. She does so in her Harvard Business Review article “Strategies for Learning from Failure” (2011). Preventable failures are the ones you want to stamp out; from intelligent ones you want to learn as much as possible. Treat both the same and you either punish experiments or tolerate sloppiness.
The limit lies where duties of care are breached or mistakes are covered up. If you name that limit clearly, the tolerance inside it becomes more credible.
In a cockpit at 10,000 metres, talking about mistakes is part of the job. Pilots reflect on how they behaved in critical situations and speak openly about wrong decisions. That improves the crew’s performance and helps avoid disasters.
For decades, aviation has had reporting systems that record errors and near misses without anyone being pilloried. The learning comes from the sum of the reports.
An office needs an adapted form, since lives are rarely at stake there. The principle stays the same: Anyone who reports is protected, and skill grows out of critical moments. A project team, for example, can set aside half an hour after each milestone in which mistakes and near misses come onto the table without blame.
The culture forms in everyday work, in small moments. Four levers sit directly with you as the leader.
Your own mistakes first. If you raise one of your own wrong decisions in the team meeting, the threshold for everyone else drops noticeably. It works especially well when you add what you’re changing as a result.
The first reaction. Anyone who reports a mistake watches your face. A “Thank you for raising this early” stays in people’s memory longer than any presentation on error culture.
Debriefs without blame. Ask first what in the process made the mistake more likely. The question of who was responsible comes later, if at all. Usually the cause lies in unclear responsibilities or in time pressure that leadership created itself.
Feedback as routine. You need a feedback culture with positive, solution-focused conversations. Short reviews after each milestone turn talking about mistakes into a habit.
Setbacks are part of how leadership grows. They force you to rethink and open paths you’d overlooked before. Without a good error culture, little works in teams.
In coaching engagements I often see executive boards demand tolerance for mistakes while taking every deviation from the budget personally. Teams read that double signal reliably and go by what they experience.
My doubt concerns the pace. Building this takes years, and one employee shown up in public is enough to damage trust within a week. I doubt that a single leader can turn it around alone when the culture of the wider group pulls the other way. Still, a lot is possible in your own area, and good examples travel fast in organisations.
Openly reported mistakes get analysed and used as a chance to learn. Sanctions are reserved for negligence and cover-ups. That way employees know honesty pays off.
They do. The first consequence is an analysis and a change in the process. Anyone who hides mistakes or breaches duties of care still has to expect consequences.
In 1999, Amy Edmondson studied how psychological safety affects learning in teams. It means the shared belief that you can ask questions and admit mistakes in your team without losing face. That safety is the precondition for tolerance of mistakes to be felt in everyday work, and for fear of failure to shrink.
In my observation, years more often than months. You can spot progress by small signs: Problems come up earlier, and people ask more critical questions in meetings. A single public reprimand can set the process back by months, though.
Further reading on hofmann.coach: Conflict management: What leads to a constructive conflict culture · Team collaboration: How individuals become a leadership team · Setbacks: Why leaders should talk about them openly · Learning organisation: What defines it and how leadership sustains it
Note: This article was first published on 17.12.2018 and was revised and expanded in October 2026.
Cristian Hofmann is an executive coach in Zurich and Schaffhausen (MAS Coaching & Supervision BSO, Forbes contributor). Over more than 20 years he has coached more than 1,500 leaders: CEOs, executive boards and leadership teams in Switzerland, with measurably agreed goals and, on request, pay-for-results. More about Cristian Hofmann.
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