"...in a world where companies budget by week - let alone by quarter - is it really surprising that only certain industries and categories happily invest in R & D (or should I call it 'adventures in failure')?"Rob's point is that having the confidence to fail comes with an attached cost to business that has to be understood and appreciated by all stakeholders (the company, shareholders, clients) in order for this kind of culture (for it is a cultural thing) to really succeed.
It's a great point. And one that I've talked of before. Business model innovation is a very different type of innovation from product or process, and one that established competitors find difficult because when they're chasing the next quarter's number, it often doesn't make economic sense. To paraphrase Costas Markides the real issue is not discovery, it is organisational.
If you're sitting in a small, agile business that embraces failure, it probably seems like the most natural thing in the world. If you're not, you'll appreciate the scope of the challenge that this presents.
It's about challenging toxic assumptions - the kind of assumptions that are deeply inherent in a business and deeply unchallenged. It's about understanding the difference between technical change (focused on process, providing solutions, clarifying roles, restoring order, maintaining norms) and adaptive change (identifying the challenge but resisting the urge to clarify, asking the right questions rather than providing the solution, challenging current roles and unproductive norms). It's about being comfortable with ambiguity, something that big business is not good at. It's about admitting that you don't know all the answers (something else that big business is not good at) but that instead it is often enough just to frame the question. And it's about understanding that what works, and what doesn't, is often counter-intuitive.
I read a great example of this yesterday in this post by RSA CEO Matthew Taylor describing a TED Global talk by Dan Pink, the central theme of which was that crude incentives (like big financial bonuses) damage performance in complex tasks. He goes on to describe an example given by Pink in his talk - the famous candle problem:"In this exercise subjects are shown a picture of a table next to a wall. On the table is a candle, a book of matches and some drawing pins in a box. The task is to attach the candle to the wall over the table, light it, but not let it drip wax on the table.
Matthew goes on to make a great point in relation to the banking crisis ("why is it that powerful people in important jobs don't want to discuss research showing that being given big rewards might damage their performance. The answer, of-course, is in the question."), but as I said in the previous post, acheiving change of this type has a lot to do with how you define and reward success. To quote Sir Ken Robinson: "If you're not prepared to be wrong, you'll never come up with anything original"On average it takes people about ten minutes to identify the solution. This is to take the drawing pins out of the box, pin the box to the wall, then stand the candle on the box so the wax drips on to it rather than the table. This requires the subjects to make the lateral leap of seeing that the box holding the pins is not just a receptacle for another object but an object in itself.
In this test those who are offered a cash prize for completion perform less well than those who are simply asked to solve it as quickly as they can. Fascinatingly, if the test is made easier - by taking the pins out of the box so it can be seen from the start as an object in play - then those offered incentives perform better than those not."
Indeed. Failure is a really complicated thing. I always think there are lots of different types of failure, mostly defined by cost. For example, drawing your design solution out on paper and testing it with stakeholders and having it torn apart is the exact same failure as launching a web site costing hundreds of thousands, testing it 3 months after launch only to have it torn apart. In both examples, it's only the design solution that fails but in the latter the cost is enormous compared with the first. The first is a kind of micro-failure which has been managed like a controlled explosion.
Posted by: Mike Laurie | July 28, 2009 at 02:56 PM