Why Failure Is the Foundation of Innovation
Whether you believe it or not, mistakes can often be used to create insights and stimulate innovation.
Honda’s founder, Sochiro Honda, said it well: "Success is 99% failure." Many winning products have their origin in failure. McDonald’s Hula Burger (1962), Apple’s Lisa (1983), Coca Cola’s New Coke (1985), or Corning’s DNA Microarray (1998).
Mistakes allow for variation far beyond what was expected--you make a wrong turn but find a better road to your destination. Thanks to mistakes, we now have such medical innovations as penicillin, smallpox vaccine, pacemakers, Viagra, and many others, all well documented in the book Happy Accidents. It shows that half the advances in medicine had an accidental origin.
This is why it’s so crucial for companies to foster a culture that celebrates productive mistakes, the kind that can stimulate thoughts and generate new paths. If leaders do not allow failure, they also kill innovation. But as my latest book, Brilliant Mistakes, emphasizes, to get those productive failures, you need to tolerate some silly and even stupid ones as well in your mistake portfolio. As with stocks, if you want to get a few big returns, you need to be willing to accept losses as well.
The Truth About Failure
James Joyce noted rather poetically that “mistakes are our portals of discovery.” They stimulate us to look beyond our narrow cocoon and encourage lateral thinking. They invite a fuller exploration of the periphery, that vast domain outside our area of focus where treasure may be hidden. Thomas J. Watson, Sr., who founded IBM, understood this deeply when he said: “So, go ahead and make mistakes. Make all you can, because that's where you will find success: on the far side of failure.”
But these great examples are the exception to the rule.
Research shows that most organizations are not very good at accepting failure. Most just want to eliminate errors altogether. This is because most managers pray at the altar of results rather than innovation.
Think about it: Do you promote your employees on the basis of results or on their process, even if the outcome isn't so good? I know a very successful options trading company that evaluates its traders not on how much money per week they make for the company but on how good their reasoning was going into the trade.
Successful companies must strike a balance between performance and learning cultures.
A key obstacle is our deeply ingrained aversion to failure. Your psyche registers pain more strongly than loss. So we need to work on reframing failure as perhaps “time-released” success. Just view it as the bitter medicine that we need for innovation, and then take a few gulps.
So, honestly, what is your typical attitude toward mistakes? I have listed five mutually exclusive responses below. Select the one that comes closest to how you actually feel and behave when confronted with setbacks or failures. If you doubt your ability to be honest about this sensitive matter, just ask others which answer most closely describes you.
1. I hate mistakes, hide them quickly, learn little from them, and will likely repeat the same error again in the future.
2. If I can’t hide the mistake, I do try to analyze what happened and whom to blame; so, some learning occurs, but it is mostly finger pointing and ego protection.
3. I generally welcome well-intentioned mistakes in myself and others; I strongly feel we should give recognition awards at work to people who failed for the right reasons.
4. I rank long-term learning higher than short-term results and fully accept that embracing mistakes is part of the package; I try to celebrate insights gleaned from errors.
5. I have actually made mistakes on purpose at times, by trying things that went against my best judgment, just to see if my thinking was perhaps flawed in this case.
The higher the number you circled, the better you are in dealing with failure in a positive way. To provide some benchmark data from a survey we conducted at Wharton Executive Education, people’s choices were distributed as follows: 3%, 32%, 42%, 22%, and 1%. Most people (74%) circled answers near or below the middle of the scale, namely 2 or 3. Clearly, many managers still have some ways to go, with few having reached the highest plateau of making mistakes on purpose to learn something really new.
Visit our survey page if you want to score yourself on-line and get some benchmark data in return about where you fit. The survey takes less than 5 minutes.
Note: Our Wharton survey asked people to score their organization, not themselves.
PAUL SCHOEMAKER | Research Director, Wharton School
Paul J. H. Schoemaker is the founder and chairman of Decision Strategies International. A speaker, professor, and entrepreneur, Schoemaker is research director at the Mack Institute for Innovation Management at Wharton, where he teaches strategic decision making. His latest book is Winning the Long Game: How Strategic Leaders Shape the Future.