Let's Talk About Failure

Costa Michailidis & Stavros Michailidis -
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Innovation holds the promise of growth and progress, but it also introduces a very real risk of failure. How should organizations think about failure with regards to innovation?

Good Risk & Bad Risk

It's a shame that we only have one word, risk, to describe some very distinct things.

The risk that comes from carelessness or recklessness is not the same as the risk that comes from trying to do something new, or innovating.

We want to eliminate the former, and cope as best we can with the latter, but there's a problem.

If we train our emerging leaders to be comfortable with failure, because it stands to reason that to be innovative you have to be comfortable with failure, then we risk that comfort with failure spilling over into the execution portion of leaders' jobs, or spilling over into the culture at large.

What to do?

We Want Efficient Experimentation

What is our goal in the first place if we're trying to be a more innovative organization?

The innovation process is long, can take many forms, and is quite unique from one organization to the next, but inevitably there is a transition from idea to action somewhere in there, and that's precisely when most of the risk becomes real.

What we want is to get from an idea with an uncertain chance of success to a pilot or prototype with a very high chance of success as cheaply, quickly, and safely as possible.

Doing so would be the definition of good experimentation, and that's the skill we want to build.

Do it Cheaper

Many risk management efforts in innovation fall short, because they try to minimize the chances of failure.

Given that you're attempting something new, there's no reason to believe that you can minimize the chances of failure. The chance of failure is always high with new ideas and new ventures.

Instead, what you can do to reduce risk is reduce the price you pay to fail.

Fail as cheaply as possible.

These are a few generic suggestions, but for any specific new project, simply ask yourself, How can I test this, or part of this, cheaply?

Do it Faster

The phrase fail fast is catchy, and so it's become part of how people speak, but it really should have been called learn fast. If you fail without learning, you've done nothing useful.

Good experimentors learn quickly.

Lessons per hour is your metric here.

There are three ways to improve along that metric. Either increase the numerator, decrease the denominator, or do both. In english, learn faster, learn better, or do both!

If there are eight critical assumptions in your business case, start by testing the assumptions that will have the most to teach you, or the ones you can do quickly, or those that satisfy both conditions.

You may also want to test assumptions that are deep dependencies of the rest of your business case. This might seem slow at first, but once those deep dependencies are covered, you can move quickly. Or if your test fails, and those deep assumptions don't hold, you can cut your losses and drop the project or go back to the drawing board.

Teams and individuals that can maximize lessons per hour will innovate the quickest.

This is why Move fast and break things, became popular at Facebook, but the word learn is missing. As usual. It's missing from almost all the major methodologies and frameworks including even some formulations of the scientific method.

Don't let learning be an implied part of your organization's innovation process. Make it explicit, and celebrate it!

Do it Safer

It should go without saying: Safety first.

If you're going to set forth to test your idea, do so safely. Don't risk your best client relationships, or expose your brand directly.

If you're setting out to test risky new product ideas, take the needed legal and ethical precautions. This is especially true with new drugs and other health related products and services.

The skill we're going for is not comfort with failure, but excellence in experimentation. That means testing ideas cheaply, quickly, and safely.

There's a subtle redefinition of failure here. When it comes to innovation, the goal is not to achieve a known result. The goal is to build something new and useful. Much of that is an act of search and experimentation.

Failure in this context would be to run an experiment that teaches nothing, and success is running an experiment that yields useful learnings cheaply, quickly, and safely.

A Word on Fear

Fear of failure is good and bad. It holds us to a high standard, but it can also paralyze us.

The trouble comes when we step from the realm of productivity, which is dominated by problems we know how to solve, to the realm of creativity, which is dominated by problems we don't yet know how to solve.

The latter requires learning, and in order to learn, we must be able to make attempts not for the purpose of achieving a result, but for the purpose of learning.

Once the purpose is to learn, curiosity can be the motive, there are no mistakes (outcomes are just outcomes), experimentation is the skill set to deploy, and lessons per hour is the metric to optimize.

Help your people know which mode they're operating in, productivity or creativity, and they need not end up in paralysis from fear.

The added bonus?

Each time they learn from being in that creative mode, they extend the reach of their productive mode.