Generative work relationships as a source of direct and indirect learning from experiences of failure: Implications for innovation agility and product innovation

Organizations often experience failures when managing complex innovation projects. While experiences of failure can often lead to frustration and create a downward spiral, they are also a vital source for organizations to develop new knowledge and enhance innovation. This, however, depends on their capacity to learn from these experiences. Research indicates that organizations do not learn all they can from failures. This study implemented a micro-relational perspective and examines whether and why generative work relationships help facilitate both direct and indirect learning from experiences of failure and how these learning modes influence the innovation of small organizations. Multi-source data from 63 software firms in the ICT sector show that generative work relationships facilitate both modes of learning from failures. However, only learning from direct experiences of failure facilitates innovation agility, whereas vicarious learning from failure enhances product innovation (patent) outcomes. The implications for a micro-relational view of organizational learning and innovation are discussed.