Five by Five / 5×5: The Tension of Failure

by | Friday, September 27th, 2013

Every Friday RE:INVENTION’s team reviews a recent news article or research study and provides analysis and insights from each of our cross-functional perspectives. We call this weekly blog feature, 5×5.

UP THIS WEEK: A DISCUSSION ABOUT FAILURE

Innovation is a buzzword, but an even bigger buzzword is “failure”. While the notion that one needs to fail in order to succeed is not new, in the last few years it has taken on a life of its own. Both in the startup world and inside corporations. Startups, by definition, are in experimentation mode from the outset. Corporations, long past their startup days, are not. But, recent news reports indicate that executives leading companies of all sizes accept innovation as an instrument of growth and consider it a top priority.

This is important, but another report shows that executives are showing considerable fear in making a commitment to invest in growth through innovation. While the reports don’t state it directly, it seems the reason why executives are blocking innovation comes down to fear of failure and indecision about success rates.

This Week’s Reference Articles:

• “Fail Fast“, a September 2013 WIRED magazine article.
• “An Attempt at Failing to Innovate“, a September 2013 WIRED magazine article.
• “The Case for Breakthrough Innovation” a September 2013 WIRED magazine article.
• “Risk Readiness and Failure,” a September 24th blog post from Paul4Innovating’s blog.
• “What Really Fosters Innovation“, from Huffington Post.

THIS WEEK’S QUESTION

Beyond the ROI, outside pressure, and other distractions, what can business leaders do to nudge closer to eliminating fear of failure and following through with their stated desire of growth through innovation?

OUR TEAM’S RESPONSES

Kirsten Osolind (“Ms. Operations”)

Today’s “even the losers get a trophy” world romanticizes failure — describing it in glowing terms, calling it a rite of passage to success, a lesson that forces you to rethink assumptions, an experience that builds character and puts hair on your chest. The reality: failure can be a crappy teacher (and chest hair gets gross if it grows too long). Losing is not always good for you.

Fear of failure can be warranted. Some failures are just bad, catastrophic, and meaningless. Failure can be costly, prohibitively so. Failure after failure after failure? Permanently fatal. Failures don’t help you succeed. Success doesn’t have to start with failure. Success breeds success.

It’s not JUST about winning; it’s what you LEARN from winning. The most important thing you learn? HOW TO WIN.

In the words of brilliant Chicago braintrust, Jason Fried (founder of 37Signals):

The authors of PwC’s recent “Breakthrough Innovation and Growth” Report recommend that companies “should adopt a ‘Play to Win’ strategy to accelerate innovation.”

I agree.

Executives who want to accelerate innovation should focus on playing to win and increasing their company’s likelihood of home runs — boosting capabilities (swing, timing, coordination, speed, practice), using the right bats (the right resources, tools and technologies), playing the right team members (in the right positions), discovering (and eliminating) obstacles in the ballpark or playing field. The difference between success and failure is sometimes very small. The best leaders use dogged determination to enable future success. They leverage their previous successes and debrief on “what works” to guide what comes next. They create an archive of learnings/knowledge that can be shared across their organizations.

Experimentation is great (necessary for high growth companies); it increases the likelihood of multiple wins. But the goal of any experiment should be success — to figure out what you did right, adapt accordingly, and improve upon it. You may fail, but the goal should always be success — to progressively increase the accuracy of your next hypothesis. Follow-up testing helps you build on the successes of each previous generation solution or prototype.

Innovation is not about GUESSING. It’s about DOING, LEARNING, ADAPTING, EVOLVING, and IMPROVING. You learn more by focusing on what went right, then by focusing on what went wrong.

When companies understand how to adapt, evolve, and commercialize products successfully rather than merely invent them — they SURVIVE AND THRIVE. Innovation implementation is hard — and the pressure to execute flawlessly is increasing. Don’t let failure paralyze you, but remember that your best bet for success is to strive for success.

Joe Barrus (“The Technologist”)

Outside of immediate and real financial risk, the ability to overcome the fear of failure is primarily a cultural issue. Different companies have different appetites for risk. Companies that operate on thin profit margins will necessarily have a low appetite for risk as any failure could have a direct impact on continued viability. However, as we move into the future with the expectation that the value of your offerings, regardless of profit margins, will be threatened as the windows of opportunity shorten, all companies will have to increase their risk tolerance as the alternative to do nothing is sure to bring about real failure.

Given an assumption that a company has authorized taking bigger risks, the issue will remain on how to transform your workforce into one that embraces change, risks and yes, the occasional failure. Your workforce has been conditioned that failure is bad, not only at work but possibly outside of work as well. People are afraid that a failure will reflect poorly on their performance record and put their job at risk or it will impact their reputation within the company and their peers.

Leaders must find ways to overcome this fear of failure and transform their company into culture of learning that accepts failure as a natural part of the process. Leaders must unite in this message to their employees and then practice what they preach. This needs to be reflected within a company’s employee performance evaluation and succession planning policies and processes. If a company actually had an employee performance plan that rewarded an attempt to try something new that may fail, that certainly would shake things up!

Probably one of the most effective ways to transform a culture using modern techniques and technologies would be to establish an internal employee social network that encourages discussion and collaboration. This way people won’t “fail” alone. They will have plenty of collaborators joining them. Throw in gamification, reputation scores, contests, rewards, etc. and you now have the ingredients necessary to change a corporate culture to one of learning that embraces change. However, one must remember that simply turning on a social network will not magically result in the desired outcomes. There are established practices that must be applied to attend to and grow the community to achieve these outcomes and these practices and technologies need corporate wide backing and funding.

Chris Lathrop (“The Digital and Social Media Thinker”)

So many buzzwords, so little time to address them all! So I’ll focus on “risk” and “failure” and their relation to each other. Often, business leaders are averse to the first because of a fear of the second. But when they add another word, “calculated,” before “risk,” they greatly reduce their chances of “failure.”

This is the gist of Erika Hall’s WIRED article: Plowing ahead with unresearched initiatives in a rush to be the first to market with the latest whiz-bang idea is bad; incrementally forging ahead with due diligence into whether a product or service fills a need in the marketplace is good.

From a digital marketing perspective, using social media both for internal collaboration and external crowdsourcing is key. As Sven Gerjets points out in his WIRED article, employees and customers alike are much more willing to speak openly on a social platform and offer valuable insight that simply can’t be gleaned by any other means…certainly not via Office Space-esque sitdown meetings with the Bobs or focus groups (a.k.a. “research theater,” as Erika puts it), two environments where people know they’re being prodded for their opinions and often feel compelled to give answers they think others want to hear instead of being brutally honest.

In other words, they’re more inclined to shoot from the hip, which is great. Let them do that in the research stage so you don’t have to later in the development stage. Of course, you first have to get over your fear of having to share the credit (as Erika said in her article) and be able to handle the truth (as Jack Nicholson famously said in A Few Good Men). These are two essential characteristics of the innovator and yes, the “entrepreneur,” another buzzword that I could go on and on about how it’s consistently misused and misunderstood in the modern world. But that’s a discussion for another day!

In sum, use social media to turn blind risks into calculated risks, which should reduce your failure rate and increase your ROI. Because failure for failure’s sake and wearing it like a badge of honor — as my colleague Kirsten agrees above — are vastly overrated concepts for everyone involved.

Jorge Barba (“The Culture Guy”)

The problem with falling prey to buzzword mania, is that it you don’t really try to understand what these words mean. Innovation can be referred to as a change for the better. And, of course, any change means risk. Failure, also, means many things. But we can reframe it as learning from our mistakes. This makes more sense.

Any strategy is a hypotheses. That is a fact. With that said, the act of strategizing/innovating is in essence “guessing”. Sure, there are best practices that have been replicated endlessly, these are no brainer mirages. But, any true leader understands, and expects, that mistakes will be made. There is no way around this fact of business and life.

People are afraid to make decisions because it implies making a guess. On top of that, there is also the abstract concept of luck. Which is out there, by the way.

Taking the last point further, even though we have some idea of how things might change, much of strategic planning still focuses on lagging indicators. The way to reduce risk, is to stop guessing. And the way to do this is for executives to get out of the office and do fieldwork and experience things with their own eyes.

This is the reason why startups place better innovation bets than big companies. They get out of the office, and try to reduce risk by doing fieldwork. Of course, this isn’t the job that a typical business analyst does.

With all this said, I advise three things executives can do to achieve some clarity and get closer to committing:

  • Widen your options. There are many ways to skin a cat. Consider multiple scenarios, not just one approach.
  • Reality test assumptions. As stated above, stop guessing by putting some part of your strategy to the test. There is no innovation without experimentation.
  • Prepare to be wrong. That’s right, you might be wrong. To better deal with that, conduct a pre-mortem by thinking about how your project failed, before you actually do it. Of course, this exercise won’t prevent failure, but it will prepare you for it.

Dennis Jarvis (“The Marketeer”)

Even when not a specific agenda item, financial return is the elephant in the room for those in the C-Suite as they debate, consider, re-assess, and often delay innovation strategies that represent the lifeblood of their very future. I have experienced what I refer to as the “innovation stall” at many times during my career, all because of the elephant. This doesn’t necessarily occur as a result of leaders lacking belief or passion with regard to growth through innovation – in fact, I think it is just the opposite. So, if that is the case, how do those in the C-Suite get over the hump to protect and enable innovation to flourish?

Certainly, leaders need to create a culture with innovation as the cornerstone. It starts at the very top, with a clearly articulated vision of innovation that is embraced by shareholders and employees, as well as vendors. Vision is so much at the heart of innovation. I would also like to recommend a very practical approach to support the vision.

Erika Hall’s recent WIRED article offers marketing research as a means to not only identify innovation opportunities but also how to provide sufficient proof of concept viability to build momentum. Unfortunately, as she notes, research is too often viewed as uncool. I agree with Hall that the business world has become over focus grouped – a technique that is over used and abused. Research exists in a variety of shades and flavors, and when used appropriately will lead to valuable insights from concept, to design, to commercialization.

As Hall suggests, you can’t drive innovation (which is about the future) by asking customers what the want or need; they will think in today’s terms and cannot envision beyond. But, there is a very substantial arsenal of social and behavioral observation, attitudinal and trade-off tools that I encourage the C-Suite to gravitate towards that are actually “cool” and enlightening. There is also a body of documented techniques (known as simulated test marketing) to evaluate the viability of an innovation and put it in financial terms well before an organization has bet the ranch and unnecessarily risked failure. This perspective does not suggest that leaders become shackled by research, but rather be smart in its deployment to reduce risk and keep innovation moving forward. I do believe well conceived research will help the C-Suite to manage the elephant in the room.

THE FINAL WORD

So. What’s your take on the tension of failure? Beyond the ROI, outside pressure, and other distractions, what can business leaders do to nudge closer to following through with their stated desire to growth through innovation? We look forward to hearing your thoughts in comments below.

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