The future of innovation is in learning how to fail.
That may sound counter-intuitive, but if you look at several of the recent trends in innovation — everything from rapid prototyping to the common Internet practice of releasing products early in beta — they are all about making rapid, iterative adjustments that uncover tiny failures and then correcting them more quickly than one’s competitors. Small failures are okay, as long as they lead to future success. Consider the "pivot" — surely one of the most over-used terms of the current Internet zeitgeist. How can it be anything other than a tacit admission of failure and an explicit promise to do something better in the future?
With technology and business cycles moving so quickly, companies no longer have the luxury of waiting a year or more to release a product into the marketplace. As a result, companies are embracing new techniques and approaches in an effort to compress their internal product development cycles to match the external cycles of the market. In some cases, they are changing their business models entirely within the space of months. Failure is no longer something to be avoided and criticized, it is something that can propel a company to future greatness.
All of this has enormous implications for entrepreneurs and innovators. If the future is about failing fast, then it is also most certainly about failing early. Companies must find new ways to move failure to the beginning, rather than the end, of the innovation cycle. Put another way: Would you rather fail when your product hits the market after years of hard work and millions of dollars in sunk costs, or fail earlier when you have lessto lose?
The idea of failing earlier rather than later is why concepts like prediction markets — eventually caught on with companies ranging from Google to GE. They leverage the power of the crowd to spot potential costly failures early in the process. Put another way: They can help prevent a product from becoming the latest fodder for the #FAIL meme. Some companies even run internal prediction markets, where employees are essentially able to “bet” on the brightest new innovations and technologies. Corporate executives can take a step back, observe where “the crowd” has the most confidence in future ventures, and re-allocate resources to areas most likely to succeed. Take Kickstarter, for example. If an idea wasn’t good enough to attract up-front funding from the crowd, then it probably needs more time on the drawing board.
Embracing failure must be more than corporate jargon. It must be built into the very DNA of a company. Just as companies must iterate rapidly in bringing products to market, they must be just as adaptable when they encounter failure in the marketplace. Consider for a moment SpaceX, which launched the first-ever commercial spaceflight to dock with the international space station. SpaceX became a great success by first becoming a great failure. Despite numerous re-schedulings and even a last-minute aborted launch, SpaceX iterated rapidly to recover from failure. By the end of the week, with a dramatic space station rendezvous under its belt, SpaceX was being heralded as a breakthrough for commercial space exploration. A potential major failure had been transformed into an historic success.
There is actually a basis for link between failure and innovation success in the whole “survival of the fittest” thesis. (Although Darwin himself never used the term "survival of the fittest," he described the concept as part of his theory of natural selection.) It is not always the strongest of the species that survives — it is the one most adaptable to change. From a Darwinian perspective, then, rapid failure actually has an intended, positive consequence: greater variation and the appearance of positive mutations that may ultimately prove useful to the species via a process of natural selection. For companies, this means the ability to turn small-scale mistakes into productive sources of future creativity. The most successful companies today will be those that are able to embrace failure in all of its forms: They must fail fast, fail early and fail often. Only then will they succeed.
Dominic Basulto is a digital thinker at Bond Strategy and Influence (formerly called Electric Artists) in New York. Prior to Bond Strategy and Influence, he was the editor of Fortune’s Business Innovation Insider and a founding member of Corante.com, one of the Web's first blog media companies. He also shares his thoughts on innovation on the Big Think Endless Innovation blog and is working on a new book on innovation called "Endless Innovation, Most Beautifuland Most Wonderful."
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