How do you reward failure?
There is a vast literature on fostering innovation within the enterprise (Christensen, Moore, Kim & Mauborgue, etc, etc) but actual innovation can be elusive.
Many organisations give much eInk to innovation in their strategic materials – but it doesn’t take much on the ground experience to understand how easily good intention is lost against the immediate pressures driving behaviour and outcomes.
Here’s a really simple test to see how commited an organisation is to the concept:
How are failed innovations rewarded?
Seminal works on Innovation
Innovators Dilemma – Clayton M Christensen
Crossing the Chasm – Geoffrey Morore
Creative Destruction – Schumpeter
Blue Ocean – Kim & Mauborgne
Everyone is in favour of innovation that works. New products, processes or systems that reduce costs, increase revenue or provide new capabilities are welcomed and celebrated – because of course they are. But that’s not how innovation works. If there is a quantifiable, straight-line path that is guaranteed to deliver success, well that’s not innovation.
Innovation comes from trying, failing, learning and trying again.
Behaviour follows incentives – what are you and your people rewarded for? If your risk appetite is ‘low’ in all areas then there are no pockets that allow experiments to occur.
Low risk is a perfectly reasonable strategy – it’s what you do if you are diligently shepherding the interests of your stakeholders – but don’t confuse things by wishing for innovation at the same time – pick a lane.
If you want to move your organisation, here are some suggestions:
Add uncertainty to your business cases.
When projects are being proposed encourage people to articulate which costs and benefits are well understood, and which are best guesses. Uncertain factors can be targetted for discovery during the development. Anyone claiming certainty should be held accountable, anyone admitting uncertainty should be given lots of leeway.
Project should be given room to re-examine cost/benefits as they go. Project methodologies (like Prince2) have this built in, but dynamics and cultural issues normally discourage the project participants from this kind of naysaying. There should be no shame in knowing that the goal posts have shifted, as costs and benefits appear and evaporate along the way. A ruthless ‘push through at all costs’ attitude is not fostering innovation. If a project is doing something new, then changes in direction should be expected.Rethink ‘Lessons Learnt’.
Most organisations have some version of Post Implementation Reviews embedded in their processes – with obligatory outputs focussed on ‘Never again’ process changes. Ie how can we avoid the same mistakes in the future.
This is all good, necessary and to be applauded.
But make sure you are encouraging a much more positive, externally focused framing as well - what discovery did this project allow? Not meet its original goals may not reflect any fault in the project. What did we learn about the market, the technology or our own organisation? Properly handled these insights on their own might fully justified the project costs.
The histories of Microsoft, Google, Facebook, Amazon etc are littered with ridiculous failures. But a common pattern with these behemoths is that you can trace subsequent triumph to these disasters.(Failures of the rich and famous
Microsoft – Zume, WinFX, Windows Me
Facebook – Facebook phone, Facebook Places, Horizons, Credits
Google – Google Plus, Waves, Glasses
Etc, etc)
Look at your risk appetites.
These tend to be sacred territory within enterprises, but your risk profiles should be clearly identifying where you are prepared to take risks to foster innovation. And a risk is a risk, what are you prepared to lose, in terms of cost, reputation or operational effectiveness, in order to discover the new ways? Organisations find this a very uncomfortable conversation, but if you are not prepared to put something on the line then don’t expect innovation
You don’t need to go as far as celebrating failures – but if you have the words ‘Innovation’ in your strategy, then you probably should.
Failures of the rich and famous
Microsoft – Zume, WinFX, Windows Me
Facebook – Facebook phone, Facebook Places, Horizons, Credits
Google – Google Plus, Waves, Glasses
Etc, etc
