Failure may be nobody's fault. It may not even be a learning experience. Sometimes it is just something that didn't work.

There's a game I play with audiences when I speak about risk. Take a pack of cards, and ask someone in the audience to remove the first six black cards. Shuffle the pack, then ask a question. If I offered you a bet, odds of three to one, on the colour of a card drawn at random from the remaining pack, would you choose red or black? The answer is obvious - bet on red. That's what everyone does.

Then I draw a card and,  bad luck, it's black. Now, I ask those who bet on red, did you make a bad decision? No, they say, and they are quite right. You had all the relevant information, and you did the right analysis. You got it right, but luck was against you.

It's easy to grasp the point in this little "toy problem" - that's what a toy problem is for. In real life, though, it can be harder. Imagine you are acquiring a business, or starting a new project. You do all the necessary due diligence and research, and process the results properly. Then you do the deal or start the project and manage it well. Despite all this, you fail. What happens?

There is a post-project review. In some organizations this would be witchhunt; who messed up, who is to blame?  In other organizations the process would be more forgiving; the failure doesn't have to be anybody's fault, but there must be some lessons to be learned. But there is a third possibility - it is nobody's fault, and there are no lessons to be learned. As in the case of the card trick, it is just bad luck. Could your organization entertain such a conclusion? If not, you have a problem.

Innovation involves doing new things that might not work. You need a model which says something like "we try things, and expect one in five (or one in two, or one in ten) to work, but for that one to pay for the others that don't." Whatever your model, you need to recognise the role of luck. Of course look at failures to see if anyone messed up, or if there are lessons to learn, but don't worry if you can't find either of these.

It's very hard for most organizations to recognise that luck plays a large part in the success or failure of what they do; it conflicts with our need to maintain and project a sense of control. But we do need to be realistic. We can't eliminate the role of luck and shouldn't try to , but we can strive to be sure that we only play when the odds are in our favour.