Why Failure is the Secret Sauce of Innovation

Just about every company I’ve ever consulted in or worked for has expressed the desire to “be more innovative” at some point or another. But very few achieve it. Why?

It’s because, I believe, in their drive for competitive advantage most companies do everything they can to avoid the one thing certain to deliver success: failure.

Failure, as most adults know, is probably the most powerful learning mechanism on the planet. Anyone who’s achieved anything meaningful collected a few bumps and bruises along the way. And while they hurt at the time, we look back on those moments with nostalgia and gratitude. Most of the successful people I know acknowledge: “I would never have achieved what I did had I not made some mistakes.”

We talk about it at business school, too. Every MBA knows that Thomas Edison had a thousand failed attempts at creating the electric light bulb. Unfazed, Edison apparently said, “I haven’t failed. I’ve just found one thousand ways that don’t work.” 

More poignantly, the creators of the Saturn V rocket that took men to the moon said they would not have succeeded in that epoch-defining adventure without the horrific failure of Apollo 1, in which three astronauts were killed in training. True, that failure carried a terrible price. But it bore fruit that has shaped our world in ways most people do not know.

So, if most of us understand the importance of failing in order to succeed, why do so many companies fear and resist it so much?

One insight is that the word (failure) itself is largely responsible for the uneasy relationship we have with it. It’s loaded up with judgement and negative connotations no one wants to be associated with. Moreover, we are inclined to conflate failing at something with ‘being a failure’. When this label is given, it sticks. 

Even more importantly, most executives I know think of success and failure as binary. If you didn’t succeed you must, by definition, have failed. Having failed once makes people suspect you might be a failure, doomed to fail again; your career pathway veers sharply in a sideways (and not good) direction.

Interestingly enough, organizations that are innovative don’t see it like this at all.

“There’s no ‘secret sauce’,” said the head of supply chain for a well-known American sportswear brand. “The only thing we might do a bit differently is that we don’t think in terms of success or failure. Instead, we think in terms of outcomes that give us different types of feedback.

“If we try a new design and people love it, we put it straight into production and hopefully make some money. Alternatively, if a new design doesn’t work for some reason, we don’t see it as a failure. We just see it as a different type of outcome; one that teaches us something different but no less valuable. In fact, once we’ve analyzed what didn’t work and put it right, we often end up with a product that’s more innovative and desirable than if it had worked out first time.”

I should admit that this is an organization with innovation in its DNA. But the reason is because they don’t understand the concept of failure or fear it in the way most organizations do. They see it not as something to be avoided, but to be embraced; a gift that helps them discover new and unexpected sources of value.

The same executive told me, “If my people aren’t trying and failing a lot, I know they aren’t pushing hard enough on the boundaries of what we know and what we can do. This means we aren’t advancing our understanding of what’s possible, and it will only be a matter of time before we’re overtaken by companies that are.”  

All this makes me wonder: what would an organization be like if, instead of talking about decisions in terms of success and failure, its leaders talked about them in terms of ‘different outcomes’ without judging or labelling them?

And what would it be like if, instead of a person being labelled a failure when a decision didn’t work out, he or she was recognized for discovering something new, unique and potentially valuable?

I can tell you what it would be like. The fear of ‘getting it wrong’ would evaporate. Consequently, people would ‘swing-out’ more, take more risk and experiment at the edge of what they know. And as a result of that, the organization would almost certainly become one of the most innovative in its industry.