It’s safe to say that 2020 put company cultures to the test. Strong cultures came out of it stronger; weak cultures struggled to survive. But what is the makeup of a company culture that can endure such massive shifts in the market? What’s the secret sauce to building company culture?

Flexibility? Sure. Support? Yes. Innovation? Absolutely. But these attributes are outcomes of something more important: being unafraid of — and sometimes even encouraging — failure.

In other words, the best work often comes with some risk, yet the tolerance for risk seems to be something the business world opposes. If that weren’t true, golden parachutes wouldn’t be so common.

When there is no risk of failure, then failing is simply the result of incompetence.

Encouraging failure doesn’t mean setting people up to fall short. Instead, it means allowing people to do more — to push themselves — despite a potentially negative outcome. It’s about being unafraid to challenge employees and trusting them to bring their best. Because when new problems present themselves, all you have is your people.

Business leaders who realized that and responded by giving their workforce room to grow — and support along the way — are the ones that were able to reinvent the way they deliver value when the world suddenly changed. By allowing room for failure, they enabled more room for growth.

Unfortunately, many companies tend to be scared to let their people shine. They’re afraid of failure. When this happens, companies miss out on game-changing outcomes — like innovation.

Embrace New Ideas

Last year, Sherwin-Williams lost big when they fired an employee after he brought new ideas to the table on how the company could engage with younger audiences. Tony Piloseno was a college student, and Sherwin-Williams associate, with 1.2 million followers on TikTok.

His feed consisted of videos showcasing his excitement and passion for mixing paint. After gaining a large following quickly, Tony began signposting his account internally to illustrate what the brand could do on social media by marketing to younger crowds.

It seemed like an obvious opportunity for the company to grow its presence with an underserved demographic. But when Tony formally pitched the idea to corporate marketing, he was put under investigation by corporate personnel — accused of stealing paint and making the videos on company time.

Sherwin-Williams headquarters shut Tony down, despite having support from his immediate supervisor. Not only did the corporate marketing team dismiss Tony’s ideas, but they also schemed to get him terminated. Rather than taking a chance, the company sent a signal to the organization that great marketing ideas can’t come from employees outside of the marketing department.

While Tony’s story is a little extraordinary, employees everywhere have had very similar experiences, albeit perhaps on a smaller scale. Too often, organizations and leaders put employees in boxes. They discourage them from bringing unexpected skills or new ideas forward. Because the culture won’t give them room to try — they potentially fail.

So, how do you build a culture that embraces failure?

Do it Strategically

At the end of the day, leaders must ensure that individual productivity progresses the company toward strategic objectives. Allowing room for growth in an intelligent way means giving employees the space and tools to grow in the right areas. The good news? We don’t need to complicate this process.

This is where technology can play a significant role when building company culture.

Employers can achieve strategic alignment with employees through modern performance management tools. These tools make it easy to create challenging goals personalized to employee skill sets. And they help push the needle forward for overall company objectives. The key is to set goals that allow employees the opportunity to stretch themselves, either by sharpening existing skills or developing new ones.

Using a digital platform gives the entire organization insight into the goals set for individuals, how individual goals track with team or department goals, and how departmental goals align with company goals. Therefore, when an employee has a great idea, it’s being applied to tasks that complement overall business needs. Put simply, aligning goals to company strategy enables employees to execute the mutually beneficial vision.

Being comfortable with a little bit of risk — while leveraging technology to help employees to grow with the needs of the organization — gives workforces the ability to improve and perform at the highest level.

Building Company Culture: Fail Fast, Grow Fast

When put under pressure, any company’s ability to pivot determines overall success. Sure, new strategies can be scary. But aligning employee goals with business goals — and cultivating a culture that enables employees to try new things and rewarding risk-taking by not penalizing failures — helps companies find innovation in unexpected places.

Leveraging technology to support goal setting company-wide creates a path for sustainable growth. It also ensures that progress toward the execution of company strategy — even when small failures do occur. In the end, embracing failure is the possible route when building company culture.

Or rebuilding, as many companies will do over the next several months and years.