How do I let my team take on challenges that might fail?

You avoid giving your people stretching work because if they fail, it reflects on you and you would have to manage the fallout. So you keep them safe and small — and quietly cap the growth of the very people you are meant to develop. You can feel the contradiction, which is why it sits uneasily with you. Growth only happens at the edge of what someone can already do, and the edge always carries the risk of falling. By protecting your people from that risk, you are also protecting them from the only thing that makes them better. And the failure you fear is rarely fatal — a stumble on a stretch assignment, handled well, teaches more than a dozen safe successes. What actually reflects badly on you is a team that never grows because their leader was afraid on their behalf. So give one person one real stretch. Something a size too big, with your support behind them and permission to struggle. Make clear that you have their back if it wobbles. When they rise to it — and they usually do — you will see that developing people means letting them risk the edge, not keeping them from it. Their growth is worth more than your comfort.