Innovation is a Risky Business

I have heard many, many senior executives talk about failure. "We have to become more tolerant of failure", they say, or "we have to learn to fail" or "fail often, fail early". And yet, when things do go wrong their first questions are often "who is responsible for this? Who's accountable? Who is to blame?". Well intentioned project post-mortems turn into blamestorming sessions.

And I don't blame them!

It's human to think like this. My first reaction when things go wrong is to blame myself. I've tried telling myself that I should be more tolerant of my own failings but somehow I don't listen to myself.

Nowhere is this struggle more intense than in innovation. You must try new ideas out to see if they work. Sometimes, despite all the research, you only know that the idea will work after launching. Innovation is a risky business.

I don't think we have to learn how to fail. I think we have to learn how to understand risk and how to mitigate it, how to manage it.

Here's an example. Some years ago I was working with someone from Accenture. His previous assignment had been as a Product Manager with (if my memory serves me correctly) Vodafone. He had headed a new product development that upon launch was not as successful as had been hoped and was discontinued soon afterwards.

Vodafone had been very clever. They had assessed the risk of this particular idea and decided that it was high. Too high to risk assigning one of their own Product Manager's to lead the development. If it was unsuccessful then it would be highly career-limiting for that person. In their company culture, a track record of success was important for building a career. So they hired a contractor instead.

It turns out this was the normal practice for their product development group. Risky new projects were handled by contractors. Less risky ones by their own staff. If a risky product ended up being successful they either hired the contractor or replaced them with one of their own staff to take it forward in the life cycle.

This was how they managed innovation risk. It seems to me to be a lot easier than trying to change their passion-for-winning culture.