'Failure parties’. Not something you’d expect an accountancy firm such as Intuit to be holding. But since 2011, they’ve been doing just this in an attempt to stimulate innovation. The idea of an accountancy firm applauding failure might be a chilling prospect for some, but Intuit is not alone. Companies like TATA, P&G and Google all ‘reward failure’ in some way. That idea is that doing so encourages the risk-taking and experimentation central to market-leading innovation.
And this is an approach we found the most successful innovators taking in our new research. As Hugh Hale, CIO for the State Of Tennessee Health Care Finance And Administration, says: “Failure is not a problem. Failure can lead you to a better solution as long as it’s not repeated, so we don’t punish people if they have been trying to be innovative. We reward the attempt, and learn from it.”
Innovation is critical if you want to compete successfully. Stimulating ideas, developing concepts and testing them in the market will create at least as much failure as success. But many organisations still punish failure – either directly or indirectly – by reallocating resources or reducing the reward for those involved. So what’s the best approach to take?
Can old dogs learn ingenious new tricks?
Shorter, faster and agile
If you want to stimulate creativity, encourage innovation and take risks on bold new ideas, you need to become more comfortable with failure. Of course, the goal isn’t to sit back and allow capital-intensive, time-consuming projects to die slowly. For failure to be a success – for it to stimulate innovation – it needs to be part of a series of short, focused initiatives.
So instead of pursuing a small number of big long-term goals, you should target activity on a large number of smaller, incremental goals. To find the ideas that work, you need to create the space to fail.
Out of the few, the many
An agile approach to innovation means keeping several options in the air at once. That helps you innovate more quickly. Through rapid prototyping, you can quickly work an idea into a physical model, design or simulation that users and customers can ‘play with’ and feedback on, enabling further iterations. You can rapidly correct your approach and direction as you gather information about what resonates and what leaves users cold.
Approaches like this are finding many applications – such as the rapid development of the UK Met Office’s multi-award-winning Weather Observation Website, and in the run-up to the launch of person-to-person mobile payment platform Pingit, which involved rapid prototyping by small, agile teams.
Fail at the micro…
Through agile innovation, any failure that occurs happens at the micro level. This means the impact of failure is much lower, and each failure gives insight into what’s needed for success. As Albert Einstein said, “Innovation is saying no a thousand times.” Not only does failing often become acceptable, new ideas are generated – and improved – rapidly as part of the process.
...to win at the macro
At the macro level, you achieve success more quickly because more and better options are generated quickly. Simply put, you’re more likely to find the innovation you need.
The healthcare sector, where product innovation takes up a large proportion of R&D investment, is one of the pioneers of agile innovation. Faced with rising costs, increasing regulation and budget cuts, the pressure to develop leading-edge products faster and at a lower cost is intensifying. Accepting that not all variables can be accounted for, and that success comes from small rather than large projects, is helping companies develop new products faster.
The Health Innovations Alliance, for example, is an initiative aligned with the NHS in the UK, which aims to capitalise on new ideas from NHS staff rapidly and effectively, encouraging innovation to create better patient outcomes. The results have been impressive: several new cancer-focused technologies, improved diagnosis methods for stroke-related conditions, and high-quality products for the disabled.
For many companies, adopting a more agile strategy will demand changes to culture, design and business model. If you embrace it you’ll strengthen your capacity to innovate – which isn’t just a nice-to-have in today's marketplace.