Why The Ability To Fail Leads To Innovation

8 August, 2017 / Articles
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As the founder of Honda, Sochiro Honda, once said, “Success is 99% failure.” What is the relationship of failure to innovation and why do so few organisations have a culture where the ability to fail or experiment is a valued part of innovation? What are the organisational barriers to this?

Innovation often stems from a botched experiment and many a product such as Viagra and the Post-It note has been a result of a failed experiment. For example, the adhesive for Post-It notes was created by accident and then took 12 years to become a product. “3M, the company who reportedly sells 50 billion Post-It notes across 100 countries every year famously lets their scientists and engineers use 15% of their time pursuing their own projects,” remarks Uri Baruchin, head of strategy of The Partners.

Innovation comes from failure, comments Severine Leloarne, full professor in innovation management and entrepreneurship at Grenoble graduate school of business. “All big product innovations and process innovations come from failure.”

Failure itself doesn’t lead to innovation but it’s how you deal with failure that matters, argues Laurence Lehman Ortega, affiliate professor in strategy and business policy at HEC Paris Executive Education. “Rather than abandon a failed initiative, if you’re able to understand and learn from what went wrong then you’ll be able to improve your offer, product or service and try again and in turn make yourself more creative and thus innovative.”

The connotation associated with the word ‘failure’ is extremely negative both in society and in the workplace. Saku Tuominen, founder and creative director of HundrED believes that the moment the word‘failure’ is uttered in the workplace, it’s a mistake. “Even thinking about failure is a core mistake either individually or in a company,” he remarks. “As humans we react to the word ‘failure’ extremely strongly.” The essence of creativity and innovation is the ‘will to improve’, adds Tuominen.

One of the barriers to an innovative work culture is the gap between ‘thinking up the ideas’ and the implementation of them, argues Tuominen. “In many companies, you have an idea and it’s polished in a workshop with Post-It notes. One of the best ways to innovate is to implement the idea. There is a problem when you over-think and under-do. When you have a creative culture there is no gap between thinking and doing.”

Organizations often declare that they are willing to experiment, comments Professor Joseph Lampel, Eddie Davies professor of enterprise and innovation management at Alliance Manchester Business School. “But the reality is that such experiments must be championed by individual managers who support products that end up failing, often pay a price in terms of promotion or worse. This has a chilling effect on their motivation and that of their colleagues.”

Mok O’Keeffe, founder of the Innovation Beehive believes a culture to experiment is far more likely to happen in start-ups than in large corporate cultures. “In the start-up community in Silicon Valley, they don’t call it failure.

Instead they call it ‘pivoting’. Failure is such an energy sapping word with an awful lot of judgement whereas ‘pivoting’ means you’re still rapidly moving towards your goal but your shifting occasionally and learning before ‘pivoting’ back on track. We see it more in start-ups over corporate because we believe that some of them are a bit naive and don’t understand the challenges they are going to come up against. But this is a really positive thing as it means they’re not afraid to experiment, something which large organisations should do more.”

However, O’Keefe believes the tide is turning and there are some great examples of innovative thinking from big business. “For example, Lloyds Banking Group have adopted a process called a 30-day hack kit which is essentially innovation in a box. It helps their teams rapidly prototype, experiment, fail and learn to solve customer problems. Adobe are doing something really interesting with their Red Box scheme. Anyone in the organization can develop an idea and receive a ‘red box’ which includes the tools and techniques, plus a $500 credit card to just try new things even if they don’t work.”

Why do so few organizations have a culture where the ability to experiment and fail is a valued part of innovation? Lehman Ortega believes that the culture of experimentation in the workplace is unusual as only success is celebrated. “It’s a learned behavior pattern. As children we’re told that we need to succeed and are rewarded only when we do so. Managers in firms are only recognised and incentivized on their success and as a result are reluctant to take risks. Very few companies such as Google actively incentivize managers if they admit early on that they’ve failed or reward the time spent on failed exploration projects.”

Leloarne believes that a culture of creativity must first be developed in order to create a culture of innovation. “We know that creativity comes from intrinsic motivation of individuals and small groups. Innovation is an output of creativity. If you want to enhance innovation then you need to enhance team creativity. You need the right amount of time pressure and mixed teams to be creative. You need to mix teams in terms of profiles and also socio-economic backgrounds. Creativity refers to individual ways of thinking.”

One way of creating an innovative culture is by allowing employees to come up with great ideas and ways to improve their own jobs, advises Tuominen. “So many companies concentrate on innovative techniques, I would concentrate on how organisations make people excited about improvement. You have to create an environment of trust where people have a passion to improve and they are excited about finding out how things work.”

Lehman Ortega believes that established firms should both exploit their existing business models and improve them through incremental innovation and have the courage to explore new business models that could be disruptive.

“Failure can be detrimental in day to day business but only allowing for experimentation can lead to disruptive innovation.”

Tips for large corporates to foster a sense of innovation:

  • Organizations need to create an innovation ecosystem. Those organizations who are successfully and sustainably innovative have a living, breathing innovation ecosystem. And right at the core of this is a strong clear vision of what they are trying to achieve and how innovation fits within that.
  • Organizations need a leadership team which can motivate, inspire and bring the organization along with them to deliver on that vision and the innovation part of it.
  • The third part of that ecosystem is having people with the right skills and capability who are trained on how to have ideas and who know what their remit is and have the tools and resources to prototype, test and learn from their customers
  • Underneath all of that is a structure and process which encourages, enforces and empowers innovation. All of those together create a culture of innovation.

The science man and innovator, Fernando Fischmann, founder of Crystal Lagoons, recommends this article.

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