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The Daily Sabbatical/Rotman | Feb 26, 2014 | 10556 views

Embracing Intelligent Failure

Leaders can reinforce acceptance of failure by publically celebrating projects that didn’t quite meet expected results, but that were successful in providing new learning
Embracing Intelligent Failure
Theodore Forbath is the global vice president of innovation strategy at frog

F

ailure is an inevitable outcome of operating in an uncertain environment, which is why so many attempts at innovation go awry these days. However, some of the most successful organizations have embraced this fact—and the opportunity to learn from failure, thereby improving their innovation track record.

Leading organizations, from Apple to Google and beyond, have learned from early-stage failures. A classic example is Apple’s Newton PDA tablet in the 1990s, a flop whose core concept eventually found its way into the iPad. Or the predictable user furor over nearly any new Facebook feature, which eventually gets re-cast by the company as ‘market research’ or ‘design validation’.

Learning from failure isn’t a new idea. A decade ago, when Henry Chesbrough of the Haas School of Business at UC Berkeley wrote his groundbreaking book Open Innovation, he showed that corporate failure can lead to fresh opportunities.  Still, in today’s business culture—where the predominant goal is often to avoid failure and reward success—it can be difficult to view failure as something that adds value.

A new breed of organization is emerging that embraces failure as an actual goal. For example, the Generic Infusion Pump project, a collaborative effort between the University of Pennsylvania and the Food and Drug Administration, recently designed a drug-delivery system ‘in reverse’: they initially concentrated on brainstorming as many potential failures as possible, and then pivoted to designing ways to avoid them.

Harvard Business School Professor Amy Edmondson—one of the world’s leading researchers on the topic of organizational failure—categorizes it into three types:

•    Preventable
•    Complexity-related  
•    Intelligent

In this essay I will focus on intelligent failure and show that it is an essential component of the R&D process.

Experimentation for the purpose of learning and innovating—a  mandate central to the concept of intelligent failure—allows for the intentional allocation of resources for exploring product and service opportunities.  Failure in such cases can be seen as an acceptable by-product of innovation, and businesses that are able to quickly assess and learn from these failures will be more innovative than those that don’t.

Intelligent failure was originally described by Sim Sitkin of Duke University as a process akin to the scientific method. Other academics are finding that failure is often a key element in the innovation process. Edward Hess and Jeanne Liedtka, professors at the Darden School of Business at the University of Virginia, report that in their combined 17 years of innovation research, organizations known for their successful inventions understand that failures are a necessity “up to 90 per cent of the time.”

In most organizations today, various facets of the product development processes manifest the concept of intelligent failure.  However, they are often re-contextualized outside the sphere of failure as ‘pilot product launches’, ‘beta software releases’ or ‘customer feedback sessions’. For its part, the company I work for [frog] has embraced the concept of ‘intelligent design’, frequently using rapid prototyping as a mechanism for validating product or service concepts so that failures can be identified and addressed iteratively and early in the product definition process.

Recently, we have been rapidly prototyping new mobile money services in Africa and Asia. This process involves bringing an interdisciplinary team of strategists, user/design researchers, designers and technologists into the field in the earliest part—the generative stage—of the innovation process. The team uses ethnographic and immersive research methods to gain insights about user needs, behaviours and motivations that inspire new ideas. These are translated into low-fidelity prototypes that can then be evaluated with end-users. With an interdisciplinary team, this process of insight generation, concept ideation, prototyping and evaluation is transformed from a sequential process into an iterative process repeated on rapid, daily cycles.

The key problem in encouraging intelligent failure is this: human nature is highly averse to the feelings of shame, embarrassment and low self-worth associated with failure. Employees also often fear repercussions to their salary and status within the organization. As a result, common reactions are to deny failure or point fingers and blame others. Based on my work at frog, following are several recommendations for overcoming the psychological barriers to risk-taking in your organization.

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Comments (1)
Dr.a.jagadeesh Mar 2, 2014
Excellent article. Good Judgement comes out of Experience but Experience comes out of Bad Judgement. In any enterprise success and failures go together. Duality is part of nature.
Dr.A.Jagadeesh Nellore(AP),India
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