Tuesday, January 05, 2010

Innovation Fail

I've been thinking a lot about the linkages between innovation and failure.  Too often we in the innovation space want to dumb down failure, make it seem safe and reasonable.  And too often many in the corporate space draw up scary creatures dressed up as the possibility of failure, to avoid having to innovate at all.  So, herewith, a rambling diatribe about innovation and failure.

First, let me start out by saying that too often innovation is a game of chicken.  A team generates some ideas and under significant pressure for speed and success picks one to champion.  At that point anything other than a resounding success is a failure, since a true failure (the wrong idea, the wrong market, the wrong time) is pretty easy to diagnose, and a marginal success (fast follower, wrong pricing, wrong channels) doesn't seem worth the effort.  Failure in many organizations is based on a catastrophic incident, where the ONE idea that had been championed and worked on didn't succeed.  This means all the investment is lost, and, what's more, there aren't any other viable ideas in the hopper.  This kind of failure is easy to modify.  We simply need to reduce the COST of failure.  That can be done by keeping more viable ideas in the hopper and by finding simpler, less expensive ways to test ideas before we commit to them fully.  After all, it's not likely that every idea in an organization will be a winner - some ideas will not succeed in any case - but choosing a needle in a stack of needles is a high risk game.  If we can find ways to reduce the cost of failure, or perhaps spread the cost over more ideas, then innovation seems less risky.

Another thing about "failure" is that we try to kid ourselves that failure is a "good thing" a learning opportunity.  Well, not in most cultures.  When I was first coming along, one or two big failures in any organization was considered a "career limiting move".  I doubt that most corporations have evolved into coddling individuals who consistently fail at what they do.  These tendencies, of course, fly in the face of experimentation and limit the range and scope of ideas.  Too much penalty for failure will result in only very plausible ideas, which really isn't innovation, just incremental improvement.  For real innovation, someone sooner or later will need to swing for the fences, and while home run hitters are exciting, they are also the ones most prone to strikeouts.  So this leaves us on the horns of a dilemma:  for successful innovation, we need spectacular ideas which may also lead to spectacular failures.  On the other hand, spectacular failures often lead to the opportunity to seek new employment.  Again, we can't kid ourselves that failure doesn't matter or is always a "learning experience", but we need to find ways to reduce the cost of failure and increase the ability to experiment.  After all, if there were no risks then everyone would want to innovate.  And perhaps that's what puts the lie to "everyone can innovate" because many people simply can't stomach the fear of failure.  But what's interesting is that they actually hold the reins to many of the monsters they fear.

Another remedy might be to seek the causes of innovation failure.  Often, many of the causes or symptoms are under our control.  Some factors we can control or at least understand.  Probably the most important factors that firms ignore or misunderstand are trends and unarticulated needs - in other words, the context and opportunities for innovation.  Typically we start with a problem and generate ideas, ignoring the environment, the strategy and the context for the idea, or simply assuming they remain the same over time.  Then we are surprised when the ideas don't align to needs in the customer base, or that someone else has beaten us to the punch, or that we've solved a problem that has been solved before (also known as being late to market).  Many causes of failure in an innovation context are within our understanding, if not our outright control, and the fact that too little strategic thinking, plannning and foresight is part of an innovation effort is often the cause of the failure.  Just as you wouldn't start a climb of Everest without careful planning and strategic thinking, why would you kick off a disruptive innovation project without the same investment?  That can only lead to failure, and that is failure that you could have foreseen and avoided.

Much like the monsters in "Where the Wild Things Are" we build up FAILURE as a terrible monster, but with careful consideration we can understand that failure can be tamed, if not eliminated.  It is important to understand that many of the causes of failure lie within our understanding and possibly within our control, and that failure is an opportunity to learn something new.  But with any opportunity for great rewards come some risks, and we shouldn't discount failure but use the threat of failure to sharpen our actions and our thinking.  Find ways to reduce the cost and the impact of failure in innovation.  Educate your management team to the costs of innovation and the realities that some ideas will fail.  Understand the factors within your control to reduce the likelihood of failure, and build in communication mechanisms to communicate what was learned or what can be reused when failure occurs.
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posted by Jeffrey Phillips at 5:48 AM


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