Hack:
Failure is an option

The solution lies in building an entrepreneurial and experimental organisational culture which is failure tolerant, in demonstrating that failure has its benefits, in rewarding failure, and in changing the perception of failure to encourage risk-taking.

The key elements of this culture might be the following:

• A culture of collaboration rather than control;
• A competitive exchange of ideas and information, brainstorming sessions, informal gatherings;
• Instilling confidence in sharing ideas in groups and reducing pressure to succeed;
• Listening to employees’ ideas;
• Being open about mistakes at all levels. Encouraging leaders to admit and demonstrate their mistakes to employees. Expected benefits are that employees perceive their managers as more human which helps to foster closer relationships;
• Creating a risk-friendly environment where people are comfortable with failure;
• Nominating “Innovation managers” who specifically care about the systematic generation of innovation.

Another solution to change a conservative company’s culture might be to set-up a separate wholly-owned venture for experimenting with new projects and ideas or partition the company into divisions with different governance regimes with regard to failure management.

Innovation managers should look into finding more high risk and high return projects and experiment more. The meaning of success and failure should be clearly defined with a differentiation made between “good” and “bad” failures (namely failures notwithstanding good preparation and organisation and those resulting from sloppiness) and ways of praising “good” failure found. The lessons learnt from an unsuccessful project should be documented and shared.

Whether or nor a failure is “good” or “bad” can only be assessed by management engaging directly with employees.