How To Fail By Design

As most innovation projects fail, understanding the reasons for failure and learning from them is crucial. Making mistakes is fruitful only if learning are being shared openly with others, to help everyone from making those same mistakes again.

Often however, failure could be avoided already prior to taking any action; just by having a different perspective or process some failures could be prevented from happening. Use the below as a checklist to reflect on your efforts (and change course right away if needed).

#1: Run Open Campaigns

Involving everyone in idea generation is common advice, but if there’s no focus, that leads to more waste. For open-ended campaigns, 40% of ideas were rejected in the first stage, and it took an average of 3,5 years to graduation. For xampaigns aligned with

strategic opportunity areas, only 10% of ideas were rejected in the first stage, and time-to-graduate is only 2 years. So, determine the specific domains and opportunity areas to focus on and then ask colleagues for ideas. With a smaller number of irrelevant ideas to reject, you can move along faster.

Should you resurrect rejected ideas? After all, business situations and contexts change, and what didn't seem like a good idea before may be apt at a different time. In SAP's experience, rarely do ideas become relevant years later. As the company defines opportunity areas and contexts early on, it chooses ideas that fall into those ambits.

#2: Do Not Accept Corporate Boundaries

There was a time when a unit within SAP was making only consumer apps with the idea that if consumers were adopting the apps, then it meant the apps were delivering a good user experience. SAP also contemplated selling the apps to consumers. But stepping outside B2B corporate boundaries would be risky given the company's lack of experience in selling software to consumers and handling smaller transactions, a realization that dawned later. Still, the design principles generated by the unit's efforts proved beneficial.

#3: Focus On The Winners

In many intrapreneurship programs, feedback and support is only provided to the winners or most promising teams of the program, leaving out the rest of the participants who may have benefitted from the same support and ideated more effectively the next time around. When employees feel like they are left unsupported, they are unlikely to rejoin the program. Feedback at the individual level can keep motivation levels up and enhance the quality of ideas.

#4: Be Convicted

Passion and conviction are vaunted terms when discussing innovations and innovators. As SAP learned, being overly convinced of the success of an idea could set you up for failure. A better route is to get the product out quickly, show value fast, and note signals from the market. If you fail to find any real market demand for the product, you can stop working on it early and avoid keeping the product around for long and spending significant time and resources on it. Ignoring data leads to expensive failures.

#5: Deliver A Product, Fast

We often repeat the mantra that it’s all about speed. Even if there’s a strong conviction that *this* product will be a hit, don’t continue investing in product development until there are clear signals from that market that you’re onto something. It’s not about time-to-market, but about time-to-value.

#6: Find Happy Customers

Tell customers about your new idea and most will say they like it. And so you develop the idea and present your new product to customers, who are now on the fence about whether they should adopt it. They generally are happy with the status quo. Budget and change management realities make them think twice, resulting in a rejection for your product. Understanding how customers' minds work and asking them the right questions about their requirements makes all the difference.

#7: Unlock Synergies

Of course, it sounds great (especially to C-suite) that we look for synergies with the core business. Yet often, leveraging internal synergies, for example, integrating your validated idea as a feature in existing software, severaly reduces the addressable market.

#8: Ignore The Corporate Immune System

Any organization has an invisible defense system that by its nature is meant to protect it from change and disruption. By going against this corporate immune system, you stand the risk of invoking mistrust and potential backlash from teams and colleagues across the company. You can’t fight this- rather, work with it and create allies to build support for your ideas.

#9: Scale Early

Going to market and scaling early may seem like a good idea. However, if your product is slow to acquire early customers, you may have to wait a bit longer. With its yet-to-be-released product, SAP is going slow, having only one customer for now. The product allows retailers and consumer product companies to establish a circular business. By waiting to productize until they are ready with a business model that works and is repeatable, the company is in a better position to avoid failure.