Its widely proposed that to succeed and be innovative you have to had plenty of the failure experience. Therefore failure should be acceptable facet of innovation.
While acceptable, this is far from desirable, not because we dont think there is much to be learned in the process of failure and that consequential outcomes are valuable, but that by implication innovation should be a free-spirited and spontaneous process and what will be, will be.
Failure would be fine, if it wasn’t so expensive. Because failures cost money (and time), high failure rates can cause corporations to become very gun shy about innovation.
Of course, one way out of this problem is to increase the innovation success rate. A noble aspiration for sure. But be careful. Following that seemingly sensible path can lead to some perverse behavior.
A company can almost always “succeed” by introducing “new and improved” products that cannibalize what they already sell. A company can confidently state that all of its revenue comes from products launched within the past two years, feel good about its innovation efforts, and actually be falling further behind competitors.
In fact, when we look at the numbers it is estimated that only 10% of our ideas are worthy of testing, and only 10% of them will be winners. Thats 1%! . So, we are not managing a programme of success, we are actually managing a programme of failure; therefore the real answer is to dramatically decrease the cost of failure. Here are 3 ways…
- Lower the costs of experiments. Running experiments need not be expensive. There are tons of low cost ways to test critical assumptions. Be creative, imagine you hadn’t a budget, imagine this was your business and you dont have the cash. Beg, borrow, steal, collaborate, even postpone expensive testing until the project has been de-risked.
- Prioritise your unknowns. Many companies spend a lot of money answering the wrong questions. They’ll seek to perfect a technology without understanding whether there’s a market need. Assess strategic risks first, because they are often what sink an idea. Chances are someone else has already thought of your idea.
- Increase the pace of decision making. Entrepreneurs with clearly bad ideas typically don’t have the luxury of spending money on those ideas for too long. Companies, however, can let bad ideas linger for inordinate amounts of time because of slow decision-making processes. Shutting down flawed projects early avoids needless spending — and focuses resources on the best ideas.
Projects are often expensive because companies seek perfection in their own eyes before they run any sort of test. Remember, the less you’ve spent, the more freedom you have to change your approach.
As Seth Godin says ‘ Stop being perfect and start being remarkable’. Good enough will be good enough
And finally, remember that failure is not a dirty word. The odds are pretty high that your first idea is wrong along some meaningful dimension. If you fail fast and fail cheap, you can accelerate discovering a winning idea.
Of course, it’s one thing for companies to say they embrace the right kind of failure. It’s quite another thing to create a culture that rewards low-risk failures and savors surprises.
In fact why shouldn’t we succeed cheaply too.
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Focus on what you can do, not what you can’t. As Dave Daniels at Launch Clinic says ‘don’t put lipstick on a pig’; it’s too transparent; but there is value in your portfolio you can mine and repurpose to gain new revenue. It’s up to you to find the value and share it with your customers.
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