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Why is failure critical for innovation?

In order to foster innovation within your organization it is crucial to rewire your thinking about failure and create a safe work environment

Raquel Rojas
Why is failure critical for innovation? | Failure Culture

Innovation can be defined as a fundamental change in design or function, resulting in a new product or process. And failure is defined as a temporary misfortune or loss. But isn’t it true that it is often after a mistake or loss that we seek to make changes? And don’t these changes bring new processes as a result?

Innovation and failure go hand in hand. As humans, an attempt to create something new and innovative is more than just about success, it can change our whole outlook in life. However, the same can be said about failure and yet, we learn way more from our failures than from our successes. How does that happen? Let’s dive in!

The value of failure in innovation

"Failure" is an ambiguous term that encompasses many different types of outcomes. One person's failure might be another person's success. But even when we consider only those events that are objectively negative -like a failed project, they can still lead to positive outcomes.

According to psychologist Karl Duncker, people who have experienced failure are more likely to come up with creative solutions than people who haven't had any failures at all. This seems counterintuitive at first but makes sense once we examine why people fail in the first place and what they learn from those failures.

In order for a business to innovate, it must be willing to take risks and learn from its mistakes. This can be difficult for people who have been conditioned by their education or upbringing to believe that mistakes are bad things — something that should be avoided at all costs. Here’s where fear of failure comes into play.

Fear of failure and its emotional impact

Fear is a universal, instinctive, and functional emotion. It’s functional because it’s useful to alert us to danger and prepare our body to run, scream, fight, or stay still. There are two types of fear:

- Factual fear: The one we feel when something really threatens our physical integrity, like an accident or a natural disaster, for example.

- Fictitious fear: The one we feel when we fear failure, for instance. Our brain comes up with hypothetical situations and jumps to conclusions. This is the brain’s way of "bracing" for impact. Our daily life is full of them.

If you are a person who lives in a big city and you have all your needs covered, a large percentage of your fears are fictitious. If you live in a war zone, most of your fears are probably factual.

When it comes to overcoming the fear of failure, two other emotions play a critical role: shame and guilt. Let’s say we calculated the budget for a project and it turned out to be way more expensive than our estimate. 

  • Shame tells us that we are not capable of making calculations. 
  • Guilt tells us that we caused a loss of money because we made a mistake. 
  • Shame tells us we ARE bad people. 
  • Guilt tells us we DID something wrong.
  • Guilt makes us want to repair what went bad.
  • Shame makes us want to hide our mistakes

By recognizing all the emotions at play, and the type of fear we’re experiencing, we can take action accordingly. But no amount of healthy coping mechanisms will change the fact that many organizations still don’t recognize failure as critical for creating innovative solutions. More often than not, the fear of failure can be better managed by exploring how failure propels different types of innovations.

Types of innovations that require failure

Within a Failure Culture framework, we recognize that a change within innovative processes comes from four types of innovations: radical, disruptive, incremental, and sustaining. Each type of innovation requires something different: a paradigm shift (radical), a unique solution (disruptive), focus (incremental), and attention to detail (sustaining). 

Let's examine briefly each type of innovation and how failure is critical for all of them:

  • Incremental Innovation: Gradual, continuous improvements on existing products and services.

As previously mentioned, incremental innovations require attention to detail. This is due to the fact that incremental innovations are versions of the same product or service that are just a tad better than the previous one. By failing on different tasks, goals, or processes over and over again, products and services are improved, and customers or end users feel like their needs are being identified and addressed.

  • Disruptive Innovation: technology or a new business model disrupts the existing market. Think Netflix, Uber, Airbnb…

These types of innovations create a new value network and provide an opportunity to move up into a higher niche level against established competitors. Disruptive innovations are a product of discovering profitable opportunities in processes, business models, products, or services that are currently failing but that may have significant growth potential in the future.

- Sustaining Innovation: happens in the current market and improves and grows the existing value networks.

Sustaining innovation targets more demanding, high-end customers with better performance. Sometimes, disruptive innovations turn into sustaining ones that might seem like they’re failing but actually aren’t. We’re talking about the iPhone. Even though Apple has failed to truly innovate in features, its profits continue to grow.

- Radical Innovation: revolutionizes technology and creates a new business model.

This type of innovation is rare. It causes the emergence of a new kind of system or product with unique qualities and features that are distinctly different from any product or process that has come before it. The personal computer and the Internet are top examples of radical innovation. How many iterations -failures- do you think are there in the history of the PC and the Internet?

The role of leadership in failure-based innovations

Innovation is clearly an expansive process mixing different points of view, conversations, and influences. Great creative ideas happen in spaces that are safe to explore, talk and share. This, as you can imagine, is only possible in spaces of psychological safety, vulnerability, and trust to share all kinds of crazy ideas, problems, and even mistakes. 

Innovation takes patience. And it is not just about one player but requires a diverse team in the right mindset with the right kind of leadership. It is way easier to try, fail and keep on trying when you're in it together with your manager as a team. By encouraging risk-taking within clear margins and a safe space for difficult conversations carried on with vulnerability, managers and other leaders model the appropriate behaviors that trigger innovation instead of burnout. 

Establishing a Failure Culture for innovation

To innovate, it is necessary to follow a series of steps that remind us of the scientific method that you surely already know: Observation, hypothesis, experimentation, analysis, and conclusions. Don't worry, for now, we will focus on the experimentation stage since it is closely related to the importance of trying and failing.

The idea of the experimentation stage is to realize as soon as possible that our hypothesis is wrong. If we fail to find an irremediable flaw, the project can continue more or less safely.

A good example of the experimentation stage is Google's Loon project. The project involved a series of balloons in the stratosphere that aimed to address the problem of Internet access in marginalized areas. The Google team carried out more than 2,100 flights, focused on finding solutions to possible problems. 

Although Loon had many technical advancements, it had slow and somewhat risky commercial viability, leading to its cancellation in 2021. Despite its failure, the data collected in the stratosphere helped fuel scientific studies of Earth's climate. The technologies developed also helped in a new project at Google, and derivative patents are free to the public on similar projects.

Google's culture of taking risks in safe environments allowed them to learn from the failure of Loon and launch more successful similar projects. Innovation requires creativity, time, and space, but also psychological safety and vulnerability.

An open and transparent environment where team members are willing to listen is necessary for building resilient and purposeful relationships with the necessary confidence to take risks, get up and try again.

In conclusion

Success and failure are two sides of the same coin. Innovation is the result of both. However, people, cultures, and organizations typically reward success while punishing failure. People fail to innovate because they fear failure more than they value creativity. 

Fear of failure can stifle creativity and productivity, which leads to a culture where innovation fails to happen. In order to foster innovation within your organization it is crucial to rewire your thinking about failure and you must create an environment where people are encouraged to innovate, even if they fail to do so.

Successful innovators learn from their failures to increase the probability of future successes. In order to have an organizational culture that encourages innovation and doesn’t focus on failure as a negative outcome, leadership must model appropriate behaviors throughout the organization.

Let's work together to help your team break free from its current paradigm of failure. Check out our innovation online course, our innovation workshop or fill out this form, so we can collaborate and find innovative solutions.

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Why is failure critical for innovation?
Raquel Rojas
Marketing & Comms Manager
Neurodivergent, antiracist, queer, feminist, vegan for the animals, mother, sister, lover, Mexican, immigrant. Fan of music festivals by the beach, gin tonics, and annoying people with her unsolicited unpopular opinions.


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