How do the best leaders, and the best organizations, manage failure? What systems do they have in place to analyze mistakes and improve in the future?

Things don’t always work out the way we expect. And in fact, many of AFIRE’s institutional investors mark their resilience as leaders in terms of how many downturns they’ve weathered. So how do the best leaders, and the best organizations, manage failure? What systems do they have in place to analyze mistakes and improve in the future?

Donald Sheets, lecturer in real estate at the Harvard Graduate School of Design, studies failure as an academic discipline. In this conversation with AFIRE CEO and podcast host Gunnar Branson, Sheets describes what separates successful, resilient investment funds, and how they deal with failure, from those who keep making the same mistakes over time. 

Note: This podcast is being posted in conjunction with Donald Sheets’ essay on organizational judgment in AFIRE’s latest Summit Journal, which will be distributed at our Annual Member Meeting on Sept. 15-17, 2026, in New York City.   

LINKS

Donald Sheets writes about organizational judgment in the latest Summit Journal. 

He’s also speaking on distressed investing, capital markets and leadership at the upcoming Annual Member Meeting in New York City on Sept. 15-17, 2026. Register for the AMM.

Learn more about Donald Sheets here.

Donald Sheets is on LinkedIn. 

KEY MOMENTS

00:00 Predicting the future
01:44 Introducing Donald Sheets
02:53 Industry silver linings
05:51 Defining failure neutrality
09:34 The medical precedent
10:38 The aviation example
12:08 Retrospective business analysis
13:51 Reframing for success
13:42 Analytical evaluation tools
14:12 The garbage analogy
16:48 Evaluating radical success
15:07 Managing analytical bias
24:23 Incremental organizational steps
31:13 Secondary vs primary
32:29 Deepening sensitivity analysis

DISCLAIMER

The publisher of the AFIRE Podcast is not engaged in providing tax, accounting, or legal advice through this publication. No content published in the AFIRE Podcast is to be construed as a recommendation to buy or sell any asset. Some information included in the AFIRE Podcast has been obtained from third-party sources considered to be reliable, though the publisher is not responsible for guaranteeing the accuracy of third-party information. The opinions expressed in the AFIRE Podcast are those of its respective contributors and sources and do not necessarily reflect those of the publisher.

The AFIRE Podcast with Gunnar Branson is the official, multiple-award-winning podcast of AFIRE, the association for international real estate investors focused on commercial property in the United States.

Hosted by AFIRE CEO Gunnar Branson, the podcast features informative and in-depth conversations with experts across the full spectrum of real estate, investment, sustainability, economics, geopolitics, and urbanism with a focus on helping each other become Better Investors, Better Leaders, and Better Global Citizens. To learn more, visit afire.org/podcast