Failure and Innovation

Innovation requires risk-tolerance, which is to say that it requires an individual or a firm to accept the inevitability that the trial-and-error process of attempting to do things differently involves making a lot of errors and learning from them.   And sometimes, what we learn is “that was a terrible mistake.”   Any individual who boasts about how innovative they are should immediately be asked about the mistakes he has made.  If he cannot name any, then he has not been innovative.

The potential for failure is an anathema in most firms.  An executive who went outside established procedures to attempt to make improvements but failed would likely not be given the opportunity to try again, but instead would be replaced with a new executive who plays by the established rules and never attempts to innovate.  A company led by individuals who “play it safe” and avoid risking failure is a conservative and non-innovative firm.

Of particular importance is that there is much to be learned from failure – to simply dismiss and refuse to give further consideration to a plan that did not work is to overlook the potential that adjusting the plan may have resulted in success or mitigated the negative side effects.   To learn nothing from failure and to retreat to conventional operations is a form of organizational cowardice.  

A firm with a culture of innovation embraces the following principles:

• It embraces failure as a possible outcome, and does not shrink from a plan because there is no guarantee of success.
• It has a high tolerance for failure, regarding it as a learning opportunity rather than a sign of incompetence.
• It plans for failure, allocating budget to risky projects and developing contingency plans so that an innovation can be adapted rather than abandoned
• Projects are undertaken with an understanding that they will not succeed immediately, and are given some latitude to adjust and continue – they are not killed or discontinued immediately if projections are not achieved.
• There is no hesitation to talk about undertakings that failed, and the discussion of any failure does not castigate individuals for taking risks but attempts to appreciate the lessons learned in the attempt.

Espousing these principles enable a firm to embrace failures as learning opportunity, to take a “try, try again” approach, and to be truly innovative.   Chances are that behavior aligned to these principles is already evident in any innovative firm, and behavior contrary to them is evident at firms that fail to innovate.