In entrepreneurial circles, to fail is a sign that you are pushing the boundaries sufficiently far, so it has become almost a badge of honor. Researchers from the Turku School of Economics at the University of Turku in Finland delved into how learning from failure influences the internationalization journey of entrepreneurial ventures.
Contrary to common beliefs about success and failure, the study reveals a nuanced connection, proposing a cyclical process where the global expansion of entrepreneurial firms is intricately tied to experiential learning.
Learning matters
This process involves a reciprocal exchange, analysis, and internalization of experiential knowledge. Failures within the entrepreneurial landscape act as catalysts, whether they stem from the entrepreneur or their peers.
Entrepreneurs play a crucial role as custodians of experiential learning, absorbing, digesting, and transferring knowledge within their organizations to amplify the positive effects of learning from failure.
Surprisingly, the research suggests that entrepreneurs don’t necessarily have to experience failure personally to gain valuable insights. Failures encountered by peers, other companies in the same industry, or fellow entrepreneurs, even in different sectors, can serve as valuable sources for long-term learning, guiding the company toward success.
Timing is key
The timing of the learning process regarding failure emerges as a critical factor, with delayed learning leading to reactive decisions without sufficient analytical thinking.
The study presents a dynamic model illustrating the interaction between non-linear internationalization and experiential learning, with feedback loops showing how experience might either fuel or inhibit the internationalization process. The significance of near-failures is also highlighted in this context.
By introducing a conceptual, theory-based cyclical model, the researchers illuminate the role of learning from failure and propose new avenues for future research, emphasizing the subjective and context-dependent nature of both success and failure.
