Innovation Failures Isn’t Always Bad
Failure is a fact of life for innovation teams, and rates of 80% or more are not uncommon.
This high rate sounds terrible, but the fact of the matter is that not all failures need to be bad. Some failures are extremely positive.
A good failure has the characteristic of teaching innovators something they didn’t know before. Usually, such lessons will have cost a small amount of money in development before a project is killed. And the best failures are those when this amount is the smallest possible. Good failures tend to be those when the team has cancelled a project early.
In an organisation that has a culture of celebrating good failure, the money that’s theoretically been wasted on a stopped project is seen as an investment that’s useful in teaching a team how to make something happen the next time.
In contrast, a bad failure is one which fails to create new lessons at all. Bad failures are also typified by wasting large amounts of money.
For many organisations, its hard enough to celebrate good failures. So you can imagine how very difficult things become for innovation people when they have to explain a series of bad failures. Most of the time, a series of bad failures will be all it takes to kill an innovation programme once and for all.
Conversely, though, organisations that are excellent at celebrating failure are ones which have developed sophisticated innovation processes which recognise failure as inevitable consequence of doing new things.
Let’s examine the math of this.
If (on average) only one out of every five things tried succeeds, that one thing has to be good enough to pay for the four things that went wrong. Otherwise, the innovation programme will never be able to justify itself financially.
So what’s the best way to ensure financial results from innovation? Clearly, by focussing attention on maximising the number of good failures – which are those that don’t cost very much.
The thing that follows from all this, of course, is that big investments in new things should be delayed as long as possible. The delay should naturally be used to eliminate as much risk as possible before big money is spent.
If you’d like to read more about innovation failure, you can go to James A Gardner’s free online book which explains how to start an innovation programme.
