The Effects of Failure and Success

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Academy of Management Journal
2010, Vol. 53, No. 3, 451–476.

FAILING TO LEARN? THE EFFECTS OF FAILURE AND
SUCCESS ON ORGANIZATIONAL LEARNING IN THE GLOBAL
ORBITAL LAUNCH VEHICLE INDUSTRY
PETER M. MADSEN
Brigham Young University
VINIT DESAI
University of Colorado, Denver
It is unclear whether the common finding of improved organizational performance with increasing organizational experience is driven by learning from success, learning from failure, or some combination of the two. We disaggregate these types of experience and address their relative (and interactive) effects on organizational performance in the orbital launch vehicle industry. We find that organizations learn more effectively from failures than successes, that knowledge from failure depreciates more slowly than knowledge from success, and that prior stocks of experience and the magnitude of failure influence how effectively organizations can learn from various forms of experience.

On the morning of January 16, 2003, the Columbia lifted off from John F. Kennedy Space Center in the National Aeronautics and Space Administration’s (NASA’s) 113th space shuttle launch. Eightytwo seconds into the launch, a piece of foam insulation broke free from the left bipod ramp area of the shuttle’s external fuel tank and struck the leading edge of Columbia’s left wing. As the orbiter reentered earth’s atmosphere at the conclusion of

its 16-day mission, damage sustained from the
foam’s impact compromised the orbiter’s thermal
protection system, leading to the failure of the left
wing and to the eventual disintegration of the orbiter. None of Columbia’s crew of seven survived. Within minutes of the break-up, the NASA Mishap Investigation Team was activated; within two hours, the Columbia Accident Investigation Board

(CAIB) was established to “discover the conditions
that produced this tragic outcome and to share
those lessons in such a way that this nation’s space
program will emerge stronger and more surefooted” (CAIB, 2003: 6). The 13 members of the board, assisted by a staff of more than 120, “examined more than 30,000 documents, conducted more than 200 formal interviews, heard testimony from

dozens of expert witnesses, and reviewed more
than 3,000 inputs from the general public” (CAIB,
2003: 9). Seven months after Columbia’s demise,
CAIB issued a six-volume, 4,000-page report on the
findings of its investigation. The CAIB Report included 29 specific recommended changes that NASA should undertake prior to the space shuttle’s
return to flight. The space shuttle program was

suspended during the duration of the CAIB investigation and the time required by NASA to implement many of the CAIB recommendations. The space shuttle returned to flight with the launch of
Discovery on July 26, 2005.
The massive CAIB investigation stands in stark
contrast to the minimal investigation that followed
a similar loss of foam insulation from the left bipod
ramp during the launch of the Atlantis on October
7, 2002 (the 111th shuttle launch). Thirty-three seconds into the ascent, foam from the left bipod ramp broke free, impacting and damaging a ring holding
the shuttle’s left solid rocket booster to the external
fuel tank (CAIB, 2003). The damage did not interfere with the launch and did not prevent the safe return of the Atlantis orbiter. The foam loss and
resulting damage were addressed after the return of
Atlantis in a NASA Program Requirements Control
Board meeting in which it was determined that
investigation of the cause of the foam loss was not
a serious enough issue to warrant delays of future
shuttle launches (CAIB, 2003). The investigation
into the incident had not been completed by the
time of Columbia’s launch.
The CAIB Report notes that despite significant
similarity between the foam loss events experienced during the two launches, one dissimilarity explains the vast difference in NASA’s responses to
them and attempts to learn from them:...
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