Most people realize that failure is necessary for innovation, and failure in innovation is expected. In fact, failure is something increasingly celebrated. Companies around the world now talk about "wearing failure as a badge of honor."
But should companies really celebrate failure? Do these companies know how to deal with failure, and what are they really learning from it?
The idea behind celebrating failure is simple: innovation is an extremely unstructured process driven by countless variables within and outside your control. When a large part of your innovation output is based on seemingly random or uncontrollable events, the likelihood of failure is high. In order to be successful at innovation, organizations need to accept this reality. Failure is not only one step along the way to creating innovative offerings; it also offers valuable lessons that can only be learned from actually attempting the creation of new value.
Even the most innovative companies fail more often than they succeed. Apple, Amazon, Google, Microsoft -- companies widely regarded as the most innovative companies in the world -- have had more failures than successes, more misses than hits. But the most innovative companies have a culture where they learn from failure, not just celebrate it.
Wearing failure as a badge of honor is only good if it helps you succeed the next time. Unfortunately, many companies are notorious for repeating the same mistake over and over again; that is not the badge of honor you want. These companies don’t understand failure or respect it enough to learn from it.
Companies don’t learn from failure, individuals do
Trying and failing at something gives you a significantly greater conceptual understanding of how to do something. It is this deep understanding that converts failure into future success.
As a result, companies don’t learn from failure, individuals do. It's the individuals who have tried and failed that are likely to succeed the next time around. Ironically, at a corporate level, organizations are terrible at supporting individuals who have failed. In many cases whenever there is failure at something, the next attempt is with a different set of individuals. This squanders the institutional value of failure.
The individuals who have tried and failed, and have learned valuable lessons in the process are often not in the same roles the second time around, or even at the same company. Their newfound knowledge from earlier failures lets them create new value in other organizations, while the company that suffered the initial failure is no better off as they have lost the people who have gained the most.
No one wants to relive failures. Consequently, whenever an initiative fails, companies generally do a cursory review documenting why it failed. Companies don’t like to talk about failure: they want to focus on future success. And this mindset takes away one of the biggest learning opportunities in front of them. We can only learn from failures if we treat them with respect. To do this, we must have a neutral and non-judgmental environment to truly understand why an initiative failed.
How to learn from failure
Generally, there are two reasons for an attempt at innovation to fail. The first is the inability to develop the product or offering in the way you desire. The second is the inability to get customer traction.
If your failure is not being able to build a product as desired, the first step is to keep trying. Persistence pays off. Also discuss your roadblocks with people from different teams and with different backgrounds, or even different industries. In many cases, having a fresh set of eyes look at your problem can give you a fresh perspective. The science of innovation has shown that breakthroughs happen when different ideas and perspectives clash and co-mingle.
Or sometimes it may be best to put the development effort on hold and let a different set of individuals take an initiative forward. Throughout the history of innovation, we have seen that ideas that did not work at one point in time found success at a later time with a different set of people.
If your innovation was developed but failed in the marketplace because customers did not embrace it, then take a hard look to see if the customer experience you offered truly provided a marked improvement over the current way of doing things? In other words, did it have a positive experience delta? One of the most common reasons innovations fail in the marketplace is that the advantage they provide over current alternatives is not perceived as high enough. Or were there other blockers, such as a lack of awareness, high cost or other disadvantages that were simply too high to overcome?
You can only learn from failure through a meticulous analysis of why an initiative failed. Failures are likely to result in future successes when organizations have an approach to evaluate why initiatives fail and then disseminate that information so the knowledge becomes institutional. And the individuals who were responsible for the failure? If the efforts to succeed were genuine then they are so much wiser through their flops that it would be a shame to not put their valuable learning and experience into other important initiatives.
While failure is uncomfortable, it is something that is likely to happen during the creation of new value. How you deal with it determines whether the failure is limited to a single short-term initiative or on a longer-term learning opportunity that could lead to a number of future success within your organization.
