What Is “Failure Studies”?

1. What Is “Failure Studies”?

Failure Studies is an academic field that systematically analyzes failures, identifies their underlying causes, and develops strategies to address them. It focuses on defining failure, understanding different perspectives on failure, and drawing lessons from failure. By examining failures that occur in various domains—such as individual life events, corporate management, technological development, and public policy—Failure Studies classifies causes by integrating diverse theoretical approaches. This classification process then informs strategies for prevention and improvement.

Failure Studies does not view failure merely as a defeat or an “end point.” Instead, it regards failure as a catalyst for social progress and individual growth. Behind most success stories lie numerous failures. Researchers in this discipline analyze how such failures happened and the subsequent paths toward resolution. The main goal is to build knowledge and insight so that people do not repeat the same mistakes.

In essence, the core principle of Failure Studies is to “learn from failure.”

Originally, Failure Studies emerged from the engineering sector. It began with analyzing accidents and defects in large-scale systems (e.g., aerospace, nuclear power, and infrastructure) and devising measures to prevent them. Over time, its scope expanded to include personal failures (such as in academic pursuits or career development), organizational failures (e.g., project or startup failures, corporate bankruptcies), and even failures in government policy. This broader scope reflects a growing academic recognition that failures are not confined to a single domain.

Failure Studies is fundamentally interdisciplinary. For instance, when a technical failure occurs, engineers investigate potential physical or structural flaws. Psychologists look into how decision-makers reasoned. Management scholars examine organizational culture and leadership problems. Economists analyze cost–benefit issues and financial structures. By combining these different perspectives, researchers arrive at comprehensive solutions. Such synergy also offers a holistic understanding of failure, which in turn provides critical insights into how to avoid it in the future.

Failure Studies became firmly established in the 20th century. In particular, Japan’s “Society of Failure Studies” is a prominent research institution in this area. Japanese engineer Yotaro Hatamura is well known for his extensive analysis of failure cases. In his book, The Laws of Failure, he distinguishes between technical, institutional, and organizational failures, systematically examining each type. His work has gained wide international recognition.

In the United States, a culture that often considers failure a prerequisite for entrepreneurship and innovation has fostered robust research on Failure Studies in places like Silicon Valley. In Europe, the field has advanced in areas such as safety engineering and disaster management. More recently, Failure Studies has begun incorporating psychological factors, including individual cognitive biases, organizational barriers to critical thinking, and sociocultural implications. In today’s online environment—where information travels rapidly—understanding the details of failures has become even more crucial, thereby boosting interest in this field.

Failure Studies typically involves categorizing failures statistically and assessing which factors are most likely to contribute to them. These insights help decision-makers make more rational choices. In this respect, Failure Studies can be seen as a form of preventive science. While it may be impossible to eliminate every single failure, recognizing repeated patterns and minimizing the scale of damage are attainable goals—and precisely why Failure Studies exists.

 

2. The History of Failure Studies

2.1 The Industrialization Era

he idea of studying failure itself has existed for a long time. As early as the Industrial Revolution, machines and equipment frequently broke down, causing accidents in railways, steam engines, and manufacturing facilities. At the time, engineers primarily attributed these breakdowns to structural defects, materials issues, or thermodynamic constraints. However, these analyses typically took the form of “accident reports,” stopping short of developing an academic framework.

2.2 Early to Mid-20th Century (The Emergence of Safety Engineering)

In the 20th century, warfare, the defense industry, and the aerospace sector all expanded. Large-scale accidents posed enormous human and material risks. In defense-related fields, research on “system safety” became increasingly active. In the United States, organizations such as Bell Labs and NASA created manuals that detailed systematic procedures for investigating accident causes. These documents introduced structured methods for assessing the potential for failure.

During the 1960s and 1970s, techniques such as FMEA (Failure Modes and Effects Analysis) and FTA (Fault Tree Analysis) emerged. These methods logically traced system defects to reduce accident probability. Initially, they were used mostly in aviation, defense, and space industries. This period marked the preliminary steps toward incorporating Failure Studies into academia.

2.3 Late 20th Century (Yotaro Hatamura and the Japanese Society of Failure Studies)

In Japan, Professor Yotaro Hatamura popularized the term “Failure Studies.” He collected an extensive range of technical failure cases from multiple fields, including manufacturing, construction, and materials development, then classified these instances to identify common patterns.

His overarching principle was straightforward:

“In order to design for success, one must first understand failure.”

Hatamura criticized the cultural tendency to conceal failure. He argued that failure should not be treated as a source of shame; rather, it must be openly shared so that others can learn and improve. This perspective had a significant impact on Japanese society, which has traditionally viewed failure in a negative light. Against this cultural backdrop, the Society of Failure Studies (失敗学会) was established in 2002.

2.4 The Modern Era: Systematic Approaches and Convergence

In the 21st century, Failure Studies has continued to expand, incorporating insights from business management, organizational theory, psychology, and behavioral economics. The discipline recognizes that many failures are not merely technological in nature. Organizational decision-making, leadership styles, communication lapses, and sociocultural factors also play major roles. For example, if a large-scale project fails, it might not be solely due to inadequate funding. A lack of accountability, poor communication, or over-optimism can all be contributing factors.

Harvard Business School has conducted detailed research on “business failures,” studying how and why certain organizations collapse, and proposing strategies to increase the likelihood of success. At MIT and Stanford, researchers have examined why startups fail, emphasizing that setbacks can be a necessary precursor to innovation. For instance, Clayton Christensen, in The Innovator’s Dilemma, analyzes how established market leaders can fail when confronted with emerging, disruptive technologies.

In Europe, various catastrophic incidents—like bridge collapses and railroad accidents—have also spurred investigation. Institutions such as Sofia University, Oxford, and Cambridge have focused on failures in public policy, examining why government programs sometimes fall short of intended outcomes or even produce counterproductive effects. This research has led to the establishment of “policy failure studies.” International bodies, including the UN, OECD, and EU, have collected data on these policy failures as well.

To summarize, Failure Studies originated in analyzing industrial accidents, then grew into a multidisciplinary field that addresses a wide range of failures in technology, business, psychology, and public administration. Scholars share their findings and continue to broaden the discipline’s scope and impact.

 

3. Major Case Studies in Failure Studies

3.1 Technical Failures

1) The Challenger Space Shuttle Explosion (1986)

The 1986 Challenger explosion remains one of the most shocking failures in the history of space exploration. On January 28, 1986, the shuttle launched from Cape Canaveral in Florida but exploded approximately 73 seconds into flight, killing all seven crew members.

Investigations identified defective O-rings on the solid rocket boosters as the immediate cause. These rubber seals hardened in the cold weather, failing to function properly. The day’s low temperatures raised red flags among engineers, but NASA leadership, under pressure from budget concerns and public expectations, proceeded with the launch.

Ultimately, the compromised O-rings could not contain the high-temperature gases and flames, damaging the external fuel tank and leading to a catastrophic explosion within seconds. The post-accident inquiry revealed that NASA’s decision-making process had ignored critical technical warnings. Scheduling, budgets, and political pressures overshadowed safety considerations.

Thus, the Challenger disaster highlighted not just a technical defect, but also deeper organizational and leadership problems. NASA overlooked obvious risk signals due to bureaucratic structures, overconfidence, and political factors. Consequently, the Challenger stands as a quintessential case of systemic failure, underscoring the importance of risk management, respect for engineering expertise, and the development of a safety-first culture.

2) Sony Betamax (Failure in the Competition with VHS)

In 1975, Sony introduced Betamax, a home video recording and playback format renowned for its superior picture and sound quality. However, JVC released the VHS (Video Home System) in 1976, and the two formats went head-to-head in the marketplace. Ultimately, consumers favored VHS, and Betamax declined relatively quickly. This outcome was not just about technical quality; market strategy, corporate alliances, consumer convenience, and content availability all played critical roles.

Early Betamax models allowed for only about one hour of recording time. VHS machines, by contrast, offered up to two hours from the start. Since that capacity was enough to record an entire movie or TV show in one go, VHS was more convenient for users. Despite Betamax’s superior resolution, its limited recording length was a severe handicap.

Sony also maintained strict control over Betamax, granting licenses sparingly and imposing high production standards and royalties. Meanwhile, JVC pursued an expansive licensing strategy, partnering with companies like Matsushita, Hitachi, Toshiba, and RCA. As a result, more manufacturers produced VHS machines, diversifying product choices and driving down costs. In the home VCR market, price competitiveness was crucial. Consumers gravitated toward the cheaper option that allowed for longer recording times—VHS.

Moreover, a robust content library proved vital for widespread adoption. The VHS camp aggressively worked with film studios and distributors, amassing a large library of available movies and other programming. By contrast, Sony’s focus on hardware excellence meant it lagged in cultivating partnerships with content producers.

In the end, this is a classic illustration that superior technology alone does not guarantee market success. Equally—if not more—important are open licensing strategies, ecosystem building, competitive pricing, and consumer-friendly features. The Betamax story remains one of the most frequently cited examples of a format war lost due to misaligned strategy and market realities.

 

4. Causes of Failure in New Business Ventures

4.1 Insufficient Market Analysis

One of the most common reasons new ventures fail is a lack of thorough market analysis. Companies may neglect to investigate consumer needs, market trends, or the competitive landscape, relying instead on the unfounded belief that a “good idea” alone will guarantee success. Without adequately exploring what customers truly want, how industries are structured, and where the competition stands, businesses often face rejection once they finally reach the market.

4.2 Technical Problems and Lack of Verification

Tech-based startups frequently stumble by not conducting adequate validation of their technology. They roll out prototypes without fully confirming feasibility and ignore—or only partially listen to—user feedback. While they may have advanced technology, they often fail to address broader challenges needed for commercialization, such as infrastructure, compatibility, and maintenance costs.

4.3 Poor Financial Management

Mismanaging funds can be a critical vulnerability for startups. Even if they manage to secure investment, they may fail to allocate resources effectively, spending excessively on marketing, R&D, and hiring without a sound plan. These misallocations lead to unstable cash flow relative to revenue, ultimately risking insolvency.

4.4 Team Capabilities and Organizational Culture

Dysfunction within the founding team—lack of leadership, conflicts, or divergent visions—can bring decision-making to a standstill and derail the business. In fast-evolving markets, delays can be fatal. A hierarchical or opaque culture also discourages team members from quickly reporting signs of trouble, which then go unaddressed until it is too late.

4.5 Marketing Failures

Even well-made products can flop if they remain unknown to target audiences. Misaligned market positioning, ad spending, or branding leads to wasted budgets. Businesses may pin their hopes on viral marketing that fails to materialize. Some attempt global expansion without having thoroughly tested the product in a local market, leading to costly setbacks.

4.6 Macroeconomic Shifts

Shifts in the external environment—economic downturns, regulatory changes, or intensified competition—may catch firms off-guard. For instance, during a recession, consumer spending slows, and startups’ growth can stall. Stricter regulations may suddenly render an existing business model non-compliant. Without the agility to respond to these changes, failure often follows.

 

5. Responding to Failure

1. Root Cause Analysis (RCA) and the 5 Whys

Go beyond surface-level explanations to identify the fundamental cause. Repeatedly asking “Why?”—often five times or more—helps uncover the deeper issues.

2. Prompt Information Sharing and Clear Accountability

Communicate the problem transparently to everyone involved. Instead of simply assigning blame, treat failure as an opportunity for organizational learning. Where accountability is necessary, use that knowledge to make institutional improvements and prevent recurrence.

3. Documenting Lessons Learned

Draft formal incident reports detailing each problem and solution. These become reference points for handling similar situations in the future. Building a knowledge database helps strengthen organizational learning.

4. Developing Recovery Strategies

Plans may include raising new capital, reorganizing teams, or pivoting the business. Use insights gained from failure to reinforce strengths and address weaknesses. Re-allocate resources to more promising areas.

5. Psychological Support

On an individual level, failure can be emotionally painful. Organizations should avoid burdening those involved with excessive guilt. Emphasizing that failure can be a stepping stone to growth helps foster a more resilient culture.

 

[References]

[Clayton Christensen]

• The Innovator’s Dilemma
• Explores why successful companies sometimes fail to innovate effectively, losing market dominance to disruptive technologies.

[Amy C. Edmondson]

• Harvard Business School professor known for her work on “psychological safety.”
• Stresses that open discussions and a willingness to share mistakes are essential for organizational learning.
• Warns that concealing failures hinders long-term organizational development.

[Sidney Dekker]

• Renowned for his research in aviation and healthcare safety, as well as his books on “Just Culture.”
• Argues that failure arises from complex systemic factors rather than simply individual error.
• Believes organizational structure, norms, and procedures strongly affect the likelihood of failure.

[Richard Cook & David Woods]

• Experts on complexity and system failures, examining them through systems engineering and cognitive engineering.
• Point out that major disasters often originate in a buildup of smaller defects.
• Advocate the view that organizations are perpetually “operating near the edge of failure.”

[Karl E. Weick]

• Organizational theorist who, in Sensemaking in Organizations, explores how organizations identify and respond to signals of failure.
• Suggests that when teams cannot make sense of critical events, errors escalate into larger-scale disasters.

[Nassim Nicholas Taleb]

• Discusses highly unpredictable, large-scale events in The Black Swan.
• Within the context of Failure Studies, a “black swan” can be seen as a failure that is nearly impossible to anticipate.
• Urges organizations to be prepared for extreme, low-probability threats.

 

Collectively, these scholars and works view failure not just as an obstacle to be overcome, but also as a valuable learning resource.

Failure Studies, therefore, approaches failure not as a negative endpoint but as a valid object of scholarly examination, dedicated to accumulating the knowledge necessary to prevent the same mistakes from recurring. This discipline has broad implications in industry, management, and individual growth. It helps prevent large-scale disasters, reduce business risks, and improve personal development. After all, failures happen everywhere; the more pressing question is what we can learn from them.

For entrepreneurs, project managers, or organizational leaders, Failure Studies offers significant benefits. It enables them to predict potential pitfalls, detect warning signs early, and address problems before they escalate. Even when failures do occur, analyzing these setbacks can lead to rapid lessons learned and set the stage for a more successful comeback. Embracing failure constructively is often crucial for innovation and growth in any organization.