The Key to Innovation Success - Fail Fast, or Learn Fast From Failure?

For a while now, tech leaders and big businesses have been promoting the idea that failure shouldn’t be just accepted, it should be actively encouraged.

If you walk into Meta’s offices, you’ll see the words “move fast and break things” emblazoned on the wall, whilst serial entrepreneur Elon Musk proudly states “Failure is an option here. If things are not failing, you’re not innovating enough.”

It’s certainly a positive step forward that failure is no longer chastised as it once was. Creating a culture of fear, squashing alternative thinking, and discouraging risk-taking is a sure way to kill innovation. We all acknowledge that the best new ideas are born out of experimentation and pushing the boundaries, which requires a level of failure to ultimately succeed.

So, how can being ok with failure be applied in innovation and in particular new product development within consumer goods companies where new novelties are the lifeblood of growth?

Well, the stats suggest that failure has been ubiquitously embraced, but not in a good way. Current estimates state that of the 30,000 products launched annually, 95% fail to meet their objectives.

That’s a woefully low launch success rate. Failure on such a gargantuan scale indicates something is going fundamentally wrong and isn’t a sustainable practice in any form.

Product failure is demoralizing for innovation teams, harmful to brand reputation, costly to the business and detrimental to the planet.

But still failure rates remain stubbornly high…

This is something that defies all sense of logic. It’s akin to Albert Camus’ famous story of the Myth of Sisyphus, who’s condemned to rolling a rock up a mountain only to see it roll down the other side every time he tries – what is the point of doing something to reach a goal, for it simply to not succeed, again and again.

To understand why this continuous loop is happening, looking at the most common reasons for failure is illuminating. These include:

• From the get-go, there’s no real consumer need identified, addressed, or solved.
• Consumer testing occurs too late in the process, so the product is fit for a hypothesis rather than being fit for purpose.
• There’s brand naivety (or ego!) in assuming their brand equity will guarantee consumer adoption.
• It’s innovation for innovation’s sake, usually because the concept of innovation is pushed downwards in an organization, and it becomes ‘innovation theatre’ with attitudes that are passive rather than dynamic.
• Without any sense of the innovation journey, the product which is probably clear to fail isn’t stopped in time - there is too much invested into the product that halting it becomes scarier than realizing it just won’t work.

Sadly, and painfully for some businesses, this is a common thread, repeated time and again, which indicates that the underlying issue is in fact, a failure to learn from failures.

It’s An Organizational Mindset Thing: Why Failure to Learn From Failure Is Commonplace

This lack of learning stems from the way companies are set up for innovation.

Innovation is often siloed and operates independently across lots of different areas of the organization, brands, business units and markets.

It is thought about in terms of ad hoc projects as opposed to holistic processes. The approach to consumer testing tends to be token gesture validation, rather than agile and iterative at every stage. This means in the process important learnings and data are not captured and testing can’t be modified to gain the best outcome. This is compounded by the fact that what data exists is fragmented, with insights scattered all over the organization; in excel sheets, PowerPoint slides, and with outsourced agencies, making it extremely difficult to draw meaningful conclusions and provide actionable insights and recommendations.

Ultimately there is no system of record in place to capture, store and share failures so they can be learnt from and used to inform future innovations to avoid the same errors.

Establishing a systematic, consistent, and aligned approach to innovation is a challenge for many large CPG companies. – Test early, test often and learn fast is a sound mantra to adopt.

Strategies for CPG Companies to Reimagine Their Innovation Process

For businesses looking to radically transform innovation success rates from abject failure to up to 73% success rates, Innovators must draw inspiration from the agile practices of innovative startups and leverage their scale of product launches to create a data moat of innovation intelligence.

Here are the three key strategies to focus on:

1. Low tolerance for failed product launches – For a start-up, launching a product that succeeds is business critical. For a large CPG, failed product launches are not existential, but are rather compounding missed opportunities that can harm brand reputation. A strong focus on driving innovation success rates must be a core metric at the forefront of innovation and insight leaders’ minds to remain competitive.
2. Build with consumers – Whilst CPG start-ups can co-create directly with their first consumers, large CPG’s must make consumer insights fundamental to the innovation process to launch successful products.
3. Unlocking the value of data with AI- Innovation processes need to evolve with past failures and successes – at start-ups, the founding teams have the benefit of being able to see all innovations across the company and can apply learnings from past failures to improve the innovation process. At a large CPG, a different approach is needed due to the scale of product launches. Centralization of data is key. Rich and consistent pre-launch data, together with post launch evaluations are required, and they must feed back into future innovation cycles to drive innovation success rates. AI should be leveraged to operationalize these learnings and ensure they are shared across the business.

Whilst failure is of course a crucial part of the innovation process, it needs to happen in a safe environment, behind closed doors, not ‘live’ in the marketplace. Let’s stop focusing on the F-word and concentrate more on the indispensable learnings that failure offers.

As Henry Ford once put it “the only real mistake is the one from which we learn nothing”.

The Approach at Cambri

Failure is an essential part of the innovation process, but failures must be learnt from. It’s about learning quickly to tweak your approach and keep testing and tweaking until you’ve nailed it. At Cambri we provide our customers with a safe environment in which to fail. We think of our innovation and insights platform as a laboratory for innovators, where they can play, experiment, iterate, and test and learn before launching to the real world.

Because all the testing happens within our platform, we generate lots of valuable data. We convert both pre and post launch data into learnings with the help of AI and surface them to our users. Users receive a predictive score as to their likelihood of launch success as well as AI generated advice that offers suggestions for improvement.

In this way the platform becomes a knowledge hub, the central repository for all learning to ensure insights are not lost and forgotten about. More importantly, these learnings provide longitudinal insights, innovation memory if you like, that help inform all future innovations. By centralising testing, the more data that is fed into the Launch AI™ model, the smarter it becomes, leading to more accurate predictions and prescriptive advice.

It’s the perfect virtuous circle where ongoing testing and learning from failure continuously drives up launch success rates which has to be better for business.