It’s OK to Fail. Really?

Large organizations often don’t embrace failing as an integral part of the innovation process; they’re too focused on optimizing operations and scaling “business as usual”.

But if failing is accepted as integral to innovation strategies, the opportunities to explore uncharted territories expand. In conversation with Dr. Simone Ahuja, Andy Cars talks about how companies can take smart risks and reframe failure within their companies to build new opportunities for long-term growth.

Support risky innovation early on

Begin by investigating your organization’s present innovation-related conditions and strategies. Only then can you begin to think about introducing new tools and methods and start shifting people’s mindsets around failure.

Start an organizational shift by asking:

• To what extent is the company culture risk-averse and why?
• How do we define innovation? Do we have a common language to discuss innovation? What do we mean when we talk about incremental, transformative or disruptive innovation?
• How do we measure innovation?
• How do we work with innovation on a daily basis? Who is involved on different levels and what innovation processes are already in place?

Move on to questions about strategy:

What are the core values and purposes that drives our vision and mission?
What trends are relevant to us?
Which areas hold opportunities and which pose threats that are relevant to us?
How ambitious or “hungry” are we to do this?
Are we prepared to earmark long-term budgets for innovation?
Who should be on the teams and how do we select our intrapreneurs?
How can we best support and incentivize our intrapreneurs?
How will we measure innovation?

Put discovery processes in place

Asking teams to innovate and deliver financial results right away doesn’t work. Take it slowly at the beginning; it will help you to move faster later. The more unknowns, the greater the need to adopt processes for discovery such as Lean Startup, Design Thinking and Outcome Driven Innovation.

Reward failure intrinsically

Successful intrapreneurship relies less on extrinsic rewards, such as financial incentives, and more on carefully designed intrinsic rewards that give people a sense of purpose and meaning.

Build an incentive structure around intrinsic rewards. We like the framework developed by Daniel Pink that focuses on autonomy, mastery and purpose.
Keep motivation high by giving teams trust, control and ownership rather than micro-managing them.
Allow teams to build their capabilities, knowledge and understanding of how to work with innovation and how to be data-driven.
Implement tools, methods and processes to manage and measure innovation.

Build innovation culture that’s willing to fail

“Smart failing or “failing forward” should be an integral part of everyday activity and directly linked to what organization’s measure and report.
Identify people who want to be on an innovation team by their eagerness to learn, sincere desire to develop customer empathy and insatiable curiosity.
Track the direction of the innovation team to ensure it is aligned with the overall strategy, purpose, values, vision and mission of the company.
Give people the time to work with innovation rather than expecting them to innovate on top of other responsibilities. Aim for full-time innovation teams.
Introduce support through training and coaching. Take a long-term perspective and build strong incentives.
Establish trust between leadership and innovation team members. Include the legal department early on to help remove barriers to innovation and HR to hire and train for innovation.

“Let’s not just talk about making failure something that is okay; let’s embrace it as an integral part of the innovation process.”

Look to the Lean Startup model

• Start with a business idea
• Identify the most risky assumption
• Convert the most risky assumption into a measurable hypothesis
• Design and run an experiment to test for the hypothesis — let the data inform your next move
• Employ funnel metrics to measure user acquisition, activation, retention, revenue and referral
• Keep each sprint short and focused. Rather run many small experiments than one “big-bang” experiment.
• Integrate failure as integral to the innovation process, draw insights from your failures and only then decide to pivot or proceed.