Guest post by Edward D. Hess, Professor of Business Administration and Batten Executive-in-Residence at the Darden Graduate School of Business

Unless a CEO has his or her head in the sand, increasing one’s innovation capacity is a consistent theme in the fight against the globalized commoditization of products and services. Innovation has become the “flavor” of the year in business media and everyone has their view of how to make it happen more frequently in more companies.

Most of these prescriptions while well meaning are not founded in the science of how innovation occurs. Innovation is the result of iterative learning processes as well as environments that encourage experimentation, critical inquiry, critical debate, and accept failures as a necessary part of the process.


Entrepreneurs understand the importance and necessity of failure. So do many of the disrupting technology-based companies like Amazon, Facebook and Google.  These examples though are not the norm because we as a society have a strong anti-failure bias.  Many people and organizations have as their primary objective the avoidance of failure.

How many companies celebrate the learning that comes from failure? How many organizations encourage learning by continually doing small experiments? How many parents ask their children what they learned as contrasted to did you get an “A”? Businesses managers everyday go to work with the goal to eliminate failures (variance).

Employees and people in general define themselves by whether they make mistakes or not. All of this leads to behaviors that minimize trying new things in order to avoid failure. That can lead to avoidance of new situations and avoiding uncertainty and ambiguity- the place where many innovation opportunities reside.

My colleague Professor Jeanne Liedtka and I have spent combined over 17 years studying innovation leaders, systems and processes. What we found is that innovation requires a mindset that rejects the fear of failure and replaces that fear of failure with the joy of exploration and experimental learning. We also found that innovation organizations understand that failures are a necessity (in as much as 90% of the time) so long as the learning comes from small risk experiments. As one innovation leader stated: “we celebrate success; we console failure; and we get rid of those who are afraid to try”.

Innovative organizations build the right culture and enabling internal system that drives innovation behaviors. Along with mindsets and system come the right experimental processes. But underlying all of this is one key concept: you must be willing to accept failures as a necessary part of the innovation process.

Why do many large companies buy their innovation? Because their dominant culture of 99% defect-free operational excellence squashes any attempts at innovation just like a Sumo wrestler sitting on a small gymnast. They cannot accept failures. The reality is that failures are a necessary part of innovation.