There has been considerable debate over organizational learning strategies as a worthwhile endeavor. This paper examines the issue within the context of High Reliability Organizations (HROs) through a recent ethnographic study that focused on organizational learning and its role in understanding of the dynamics of operational reliability. A review of the literature examines factors that influence organizational learning effectiveness within the context of the Sullivan-Beach model (Sullivan & Beach, 2009), which provides a conceptual framework from within which the dynamics of High Reliability Organizations (HROs) can be explained. Empirical data was gathered over a six month period in a high reliability environment supporting US Navy operations. An operational failure and the organization’s response are analyzed using the Sullivan-Beach model. The analysis assisted in identifying factors that led to the operational failure and the remedial action that ultimately resulted in a dramatic improvement in operational reliability. The findings of the study support the notion that effective organizational learning strategies are critical to operational reliability, particularly in recovering from operational failures or preventing them altogether (Sullivan, 2007). In addition, the discovery of the Organizational Learning Loop within the Sullivan-Beach model suggests that success and failure with organizational learning depends on the same set of interrelated factors. Critically the paper provides insights into how organizations can learn from failure.