Reaching and Falling

Is failure really the root of success? On one hand, failure may spur the firm to action and provide new information that leads to future success.  On the other hand, failure experiences tend to be difficult to encode in that they are often ignored and responsibility is not always clear. Fortunately there’s another way of looking at this issue, as J.P. Eggers and Jung-Hyun Suh of New York University’s Stern School of Business point out in their research paper,  “Reaching and Falling:  Why Failure in Exploration Differs from Failure in Exploitation.” They set out to examine two hypotheses built around the idea that the effect of prior success and failure on future performance hinges on the nature of experience —...

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