The Power of Sharing Failures: The Effects of Failure Disclosure on Exploration Performance

38 Pages Posted: 26 May 2023

See all articles by Clara Xiaoling Chen

Clara Xiaoling Chen

University of Illinois at Urbana-Champaign - Department of Accountancy

Xian Huang

Faculty of Business in SciTech, University of Science and Technology of China

Laura W. Wang

University of Illinois at Urbana-Champaign

Date Written: May 11, 2023

Abstract

Creativity-dependent companies often implement failure disclosure programs to encourage employees to publicly disclose failures encountered in exploration activities with a focus on learning. In an experiment in which participants perform a letter-search task by counting the search letters in each question (i.e., exploitation) or identifying an embedded shortcut that applies to all questions (i.e., exploration), we manipulate whether participants are encouraged to disclose their failed attempts at finding the shortcut to future participants and whether they are evaluated for their task-related skills. Drawing on emotion regulation theory, we predict and find that failure disclosure increases participants’ likelihood of correctly identifying the embedded shortcut, and this effect manifests itself in the presence but not in the absence of evaluation. Because evaluation is typically present in natural work settings, our theory and results suggest that failure disclosure is an effective mechanism to increase employees’ exploration performance.

Keywords: failure disclosure, exploration, performance evaluation, cognitive reappraisal, emotion regulation

JEL Classification: M40, M41

Suggested Citation

Chen, Clara Xiaoling and Huang, Xian and Wang, Laura W., The Power of Sharing Failures: The Effects of Failure Disclosure on Exploration Performance (May 11, 2023). Available at SSRN: https://ssrn.com/abstract=4446544 or http://dx.doi.org/10.2139/ssrn.4446544

Clara Xiaoling Chen (Contact Author)

University of Illinois at Urbana-Champaign - Department of Accountancy ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Xian Huang

Faculty of Business in SciTech, University of Science and Technology of China ( email )

Hefei, Anhui
China

Laura W. Wang

University of Illinois at Urbana-Champaign ( email )

601 E John St
Champaign, IL Champaign 61820
United States
4696844455 (Phone)

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