How Failure Impacts Innovation

Let’s face the facts: failure is becoming a trendy thing due to the ever-increasing speed of innovation. More and more we hear entrepreneurs say “It’s OK to fail” or “Failure is a must for success”. Though the word failure has more of a negative connotation, it seems that the word has lost a lot of its adverse context and our current work culture tries to normalize failure and highlight its importance. The irony nevertheless is that no one wants to fail.

In fact, failure itself doesn’t lead to innovation, it’s more about how you deal with failure that matters. We will certainly not tolerate if the engineers who build our city bridges or doctors who treat us fail in what they do. But if you are breaking new ground, it is inevitable to fail at some point and often it’s part of the experience. So, a failure culture is not an excuse for delivering poor quality of known territory. Instead, it is linked to new ideas and approaches to do things differently. After every failure, it’s necessary to dive deep into their reasons and figure out how to avoid the misstep next time. Changing the corporate language from "risk and failure" to "experiment and learn" becomes indispensable. Below we present approaches to how failure can be used as a lever for innovation.

Find a Way, not Excuses

In some companies, excuses seem to be their core business – true to the motto: “If you don’t do anything, you can’t do anything wrong“. There are many excuses that employees make about why they can’t innovate. Due to the fear of failure in professional reality, own ideas are not implemented, opportunities are left unused and people start practicing finger-pointing. The bigger a company is, the easier it becomes finding reasons why a project should not be started. Of course, coming up to excuses is easier than producing results on time. Being conscious of these excuses is a good start to get rid of them.

Companies are challenged by an enormous innovation pressure and ongoing digitalization since both are accompanied by a change in behavior. Employees must live this cultural change with a high degree of responsibility for results and be enabled to implement changes without the fear of making mistakes. If someone takes personal ownership of the failure, that person is more likely to learn from that mistake. A cultural shift from no credibility or integrity to accountability, execution, and honesty becomes imperative. Nevertheless, due to the actual working environment that involves complex systems, dealing with many different colleagues and ambiguous factors, it is hard to reduce the uncertainty around failures. For this reason, managers should push forward a common understanding of types of failures that employees can expect to happen at work. In return, employees must proactively and hands-on dare to take the step of personally accepting risks and being willing to make a change.

Company culture should be intolerant towards excuses, otherwise, a working environment will lack honesty and integrity. Building a sustainable “no excuse culture“ in your company will not be done overnight. There needs to be a complete knowledge of job roles and performance expectations, that no one blames the other for not getting things done.

The bottom line is that “If it is important to you, you will find a way. If not, you’ll find an excuse”.

Learn from Failure Stories

We always strive to teach and learn from success stories, but it is equally important to learn from failure stories. Those struggles can turn out to be valuable learning experiences. Why do people fail? What was the reason that all the people that wanted to innovate in this or that specific field lacked success? The founder and executive chairman of the Alibaba Group Jack Ma says “Our MBA programs teach a lot of success stories making people believe they can easily be successful. But when you share a lot of failure stories, people learn”.

Any mistake is a costly lesson for the company, and this cost is significantly reduced by avoiding to fail at things that others already did. Would you have thought that Dyson Ltd. founder Sir James Dyson went through 5,126 prototypes before coming up with the final idea that made him a multi-billionaire? Or did you know that in the 90’s Google co-founders Sergey Brin and Larry Page had the idea to start a pizza delivery service via fax (which obviously became a hopeless attempt)? Luckily failure story sharing is becoming an esteemed way of acquiring knowledge. Moreover, there is a global movement called Fuckup Nights that began in Mexico in 2012. In more than 250 cities around the globe, these events gather entrepreneurs to share sincere stories of professional failure. A few years ago Johannes Haushofer, Princeton University professor, published online his “CV of failures”, where he included all the degree programs he didn’t get into, research funding he didn’t receive and rejected papers for publication. His non-standard CV and the format went viral as typically prominent professors and entrepreneurs are regarded as people who succeed at what they do. It showed people that most of the things he tried actually failed, but all those failures were mostly invisible to others, while his achievements were well known.

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Do it like a Scientist

Researchers in science have the mindset that the experiments they run will periodically succeed, yet more often their experiments will not produce any meaningful results, or in other words, they will fail. But scientists have the mindset that failure is not optional in their research; instead, it’s an integral part of experimentation that sometimes leads to cutting-edge discoveries in science. On the contrary, entrepreneurs and managers typically start a project with too much focus on succeeding and having the perfectly polished results rather than concentrating on experimenting. This is why managers and entrepreneurs lack the knowledge about the things that won’t work. Managers must actively push themselves and their staff to test theories because only relying on experience and intuition can result in many lost opportunities.

Experimentation is the way to test assumptions and theories, and it should be continued even after an achievement. This is what happens in scientific research. Experimentation is the panacea of innovation. In their innovations, scientists pay attention to a balanced relationship between curiosity, intuition, and skepticism. Their work is driven by curiosity and guided by intuition and previous knowledge – an approach that should also find more application outside the laboratory in corporate decision-making processes.

Failure as Part of the Innovation Process

Yes, failure is a necessary part of innovation management. Innovation is the result of iterative learning processes and environments that encourage diversity, unconventional thinking, critical inquiry, debate and teams with complementary capabilities. By giving people the freedom to innovate and experiment, you automatically also give them the freedom to fail. But if you think about it, usually most of us fail at making failure a learning experience. It is essential that as a group or organization you take the time and reflect on the reasons of failure and celebrate a culture of productive mistakes, the kind that can stimulate thoughts and generate new successful paths.

If you want to learn more about the key habits of innovation, read our article “7 Habits of Highly Innovative Companies“.