"Failure demand" is better described as wasting resources on handling complaints which would better have been resolved at an early stage, and at a lower management level.
Organisations set up to thrive on this type of failure - e.g. the Scottish Public Services Ombudsman can simply be described as an unnecessary expense.
An "effective and adequate" investigation of a complaint will result in a positive outcome. An "inadequate or ineffective" one will result in a negative one: an unhappy complainant [who is often right] costs the offending organisation more and more.
The very fact of the SPSO's existence is the prime evidence of "inadequate or ineffective" investiagtions in other organisations - public ones.
In Gibralter, with a retired Barrister as Ombudsman, they have a very high satisfaction rate - effectively and adequately closing down complaints to the satisfaction of all concerned with minimal cost.
For more, here are three links into the firm of consultants, whose top man John Seddon, first identified this phenomenon [whatever it is called], and its cause which he says is the [mis]use of "Command and Control".
The links are here:
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One could write a million words on this subject, but allowing adequate and effective decision making at a low level is of the essence. One can only point to the Roman Army, upon which most modern armies base their structure and command mechanisms. It worked for them !
NOTE: This web site is NOT promoting the use of John Seddon's methodology for sorting out this type of problem, just using it to evidence that the problem of inadequate or ineffective investiagtions is very real: Rdyy, Hillsboro, etc etc.