Project breakdowns, marked by contingent events and often accompanied by negative emotions, present opportunities for cultivating a learning culture within organizations to effectively manage such challenges. An empirical analysis of six cases in the manufacturing industry demonstrates how managerial cognition plays a pivotal role in facilitating project learning from failure, devising coping strategies, and fostering innovation. This paper contributes by framing the sensemaking of breakdowns as either reinforcing existing capabilities or transforming them. In the latter cases, shared managerial cognitions are shown to facilitate decision-making, allowing for the reframing of current routines and the strategic choice of new capabilities.