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

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