Saturday, November 20, 2010

The Bedrock of Innovation

I was combing through my backlog of HBR blog posts recently and came across this one from shortly after Google pulled the plug on their Google Wave experiment (remember that?). I think it was way back in August 2010. The blogger, Karim R. Lakhani, is reacting to the hue and cry that followed Google's "failure."

Failure of course is always a possibility with any attempt at innovation. Indeed the bedrock of innovation is failure. Unpacking the history of most innovative products and services will reveal a long track record of failure where innovators attempted many different (failed) ideas and approaches on their way to create high-value solutions. These failures are a necessary on the path of innovation and executives and managers need to build an organizational culture that has a high tolerance for failure so that that their staff don't second guess big risky ideas and instead propose incremental bets.

This really hit home for me. As I've written before, I'm chairing the WSAE Innovation Task Force, and we recently identified the freedom to experiment and fail as one of the core principles of innovation the for-profit sector has embraced that the non-profit sector still needs to work on.

As Lakhani points out, I believe it is incumbent on leaders to build organizational cultures with high tolerances for risk. To shrink from this challenge, to allow risk aversion to dominate our culture, is to relegate our best efforts to little more than incremental improvements. Nothing else can survive where risk is feared. The perceieved price of failure in these environments is too high to attract the necessary champions for innovation.

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