Innovation Failures Isn’t Always Bad

Failure is a fact of life for innovation teams, and rates of 80% or more are not uncommon. But not all failures are bad. Some can have extremely positive consequences. A good failure is one which teaches an organisation something. Usually, these lessons will have been learnt after a certain amount of investment has been made.

The best failures are those where the lessons have been bought at the smallest possible cost.

In other words, the innovation team has cancelled a project early.

In a culture that celebrates good failures, the money spent on the stopped project is seen as an investment that can usefully support the innovation team in their future endeavours. On the other hand, of course, there's bad failures. Usually these are typified by failing to reveal any new information whilst simultaneously costing a huge amount of money because they weren't stopped early enough. For many organisations, its hard enough to celebrate good failures. So you can imagine how very difficult things become for innovation people when they have to explain a series of bad failures. Most of the time, a series of bad failures will be all it takes to kill an innovation programme once and for all. On the other hand, many organisations are great at accepting failure.

They've recognised that they need sophisticated innovation processes to ensure their failures are directed into new unique things that work. Let's examine the math of this.

If (on average) only one out of every five things tried succeeds, that one thing has to be good enough to pay for the four things that went wrong. Otherwise, the innovation programme will never be able to justify itself financially. What is the best way to ensure this doesn't happen? Obviously, by concentrating attention on maximising the number of good failures – those which don't cost much.

The natural corollary of this, of course, is that you should delay investment in new things as long as possible – certainly long enough to ensure you've removed as many risks of failure as possible.
For more on management of innovation programme will help.

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