Failure Is An Option, Part II

Last week I wrote on failure as a critical component of Innovation and the fact that there are many organization's both large and small which fear failure so much that they automatically relegate their market position to the 2nd or 3rd tier because of their inability to experiment - fail - experiment again - succeed! So the question begs itself, how can firms begin to create a culture that embrace failure as an integral component of success?

A caveat first. It ain't going to be easy. Companies have been cutting costs and employees for years, resulting in growing job insecurity.  So many EE's don't feel like putting themselves in a position to fail and subsequently lose their jobs.   Couple that with increased expectations as to employee job performance and you have a perfect storm keeping employees tied up in the play it safe harbor.

So here are a few tactics that can be leveraged to build a "good failure" culture:

1. Leadership - place leaders in the trenches who not only foster an environment where it is safe to fail but who have failed themselves - and can turn failure into eventual success by enabling the team to learn from it and try again.  This may mean bringing in new blood from outside the team or outside the organization to deliver that new perspective and new methods of doing things.
2. Recognize and Rationalize Performance and Learning based cultures.  Lets face it, if you are bonused on discrete MBO's, there is no way in hell you want to fail, your livliehood is resting on it. But then how do you ever get a chance to learn from your mistakes?  Systems need to be put in place that don't put these two cultural imperatives on a collision course.  At IBM Research for instance, there are two performance and review cycles. A standard one year cycle which accounts for an employee's bonus in that year and a 3 year cycle for performance on salary and rank.  In this way, if a researcher has a year of failures, his rank and salary in the corporation is not affected.  This is especially important as any of us researchers can tell you,  as more often than not the beginning of a project has many more failure points or get results you didn't expect than later in a project. These failures though can take you in completely different yet very serendipitous directions... can you say rubber?
3. Celebrate your failures.  Most companies bury their failures under the rug, move the manager of the team to some insignificant role as a hand slap or pretend the whole thing never happened.  You want to ingrain in your teams that its ok to fail? Celebrate them!  Recount your failures as a team and even party around them, but don't sweep them under the rug. 
4. Examine your past. Where else can you find a wealth of information on your organization's successes and failures. Set up learning sessions for managers and employees to look at projects and initiatives that did not meet internal and or external expectations.  Its the the only way to learn!
5. Co-create with Customers and Partners Early.  Co-creation is one of the key ways in which you can afford to fail early and often because when the rubber meets the road, its your customers and partners who use the solutions you create.  If you bring them into the innovation cycle from the beginning you are more likely to develop services and solutions that meet their needs... from the beginning
6. Hire employees who have failed and learned from their past.  Managers who have failed and failed hard AND have learned from them should be hugely prized. These are individuals who are able to learn from their mistakes and put practices in to place that exploit them for good.

There's a lot of good reading on Innovation that you should digest.   Initial recommendations  include:

• Dealing with Darwin, Geoffrey Moore
• The Innovator's Dilemma, Clayton Christenson
• The Innovator's Solution, Clayton, Christenson
• 10 Rules for Strategic Innovators, Vijay Govindarajan & Chris Trimble
• What Customer's Want, Anthony Ulwick