Managing for failure is the plan that you will have should the project fails. Clearly, very rare are those project managers that will actually take the time and manage for failure (there are some project managers who don't even manage the project at all!).
In short, managing for failure means:
- What should you do if the project fails? Should you quit your job?
- What should the company do should the project fail? Should it try to re-incarnate the project under a different name and with different requirements? How should it account for the loss? (can the company afford the loss, and if it can't, then what should it do?)
- Should the client/customer be charged if the project fails?
- On which project should the team members be allocated to?
- What are the documents that should be produced in case of project failure?
And, more importantly, who to scapegoat? (now we wouldn't want you to be the scapegoat, would we?)
Personally, I have never managed for failure but I can tell you for sure that you don't include the above in your project management plan or your RMP. The answers to the questions above (and others that you can think of) should be in a secret document that is shared by you and the project sponsor only (if you trust the project sponsor enough, that is).