My series on failure continues with a recent article by James Surowiecki in the May 19 issue of The New Yorker, "Epic Failures of the Start-Up World."  Surowiecki's brief piece -- in which he references research showing that failure doesn't predict future success, it predicts future failure -- was picked up by Inc. magazine's Ilan Mochari.  In "Are You Celebrating Failure a Little Too Much?" Mochari points out that the research Surowiecki cites is based on VC-funded start-ups, which account for only 0.0005% (300 of 600,000) of new businesses.  Other researchers argue that the experience gained by failure among the 99.95 percent of business start-ups that aren't venture-funded can indeed be invaluable going forward. What do you think? Drop me a line.
“The Courage to be Second” – a panel at the Clinton Global Initiative event at Arizona State University in March 2014 – is about “failure” if you believe – as so many aspiring social entrepreneurs do – that success requires developing a new methodology to attack your chosen social problem.   But why start a new initiative or organization when proven solutions to many of the world’s most seemingly intractable problems already exist?  Coming in second – adapting for your context what is known to work elsewhere – isn’t as sexy as the prospect of fame and glory for developing a hot new methodology, but it’s often smarter and more effective. 

This panel, moderated by Chelsea Clinton, Vice Chair of the Clinton Foundation, with Bill Drayton, Founder and CEO of Ashoka; Katie Smith Milway, Head of Knowledge for the Bridgespan Group;
Deogratias Niyizonkiza, Founder and CEO of Village Health Works; and Rosario Pérez, President and CEO of Pro Mujer, explores how social innovators can better recognize opportunities to join forces with established organizations, and examines the challenges, costs, and benefits of scaling up successful solutions.  They also consider whether recognition for doing an extremely good job coming in second can ever match the social rewards of being first. 

Former President Bill Clinton summed up this topic for the assembled university students this way:  “All of you young people, you have to decide whether the only way you can win is for someone else to lose.  That’s the core of this question.”

What do you think?  I hope you’ll let me know.
The InnoCentive paper by Stefan Lindegaard I wrote about earlier, “Embrace Failure to Build a Stronger Innovation Culture,” is excellent.  Another useful discussion of failure occurred at the Clinton Global Initiative’s 2012 university gathering (CGI-U), held at George Washington University.  Kathryn Schulz, author of Being Wrong:  Adventures in the Margin of Error, moderated a panel entitled, “The Wisdom of Failure:  Building a Culture of Creative Problem-Solving.”  

Panelists were Robin Chase, Founder & CEO of Buzzcar; Cheryl Dorsey, PhD, President of the venture-capital firm, Echoing Green; Biz Stone, founder of Twitter; and Ashifi Gogo, PhD, CEO of Sproxil and holder of the first PhD in Innovation from Dartmouth University. 

This group of experts in failure and success offered three major lessons, all of which resonate with Lindegaard’s paper.

First, all agreed with Buzzcar founder Robin Chase that you need to face mistakes fast, and move on.  It might be (will be) embarrassing, but, as Chase drily observed, “It’s not the worst thing that ever happened in humanity.”  Getting stuck in the hole is far worse than making a mistake in the first place.  

Biz Stone railed against the cultural attitude that admitting mistakes is a show of weakness, even professional suicide.  Stone maintains that, in fact, failure look great on a resume:  if you can show a high level of learning from a smart effort that didn't work out, you're showing brains, courage, and resilience, all attractive qualities to worthy employers. “To succeed spectacularly you have to be willing to fail spectacularly,” he argued.  Cheryl Dorsey, the President of Echoing Green, agreed.  The surest route to permanent failure, she noted, is being afraid to start.  Success in innovation requires a high level of comfort with uncertainty, complexity, and screwing up. 

However -- and this is lesson #2 -- all also agreed that mistakes are often costly, and all mistakes are not equal.  Some mistakes are inevitable when you’re trying something truly new, but stupid mistakes are not inevitable.  The panelists’ strong advice:  learn as much as you can from others, do not replicate their mistakes, and never make the same mistake twice. 

Finally, they agreed that another hallmark of a successful innovative culture is iterative speed.  Robin Chase stressed that perfectionism is the deadly enemy of forward progress.  The successful innovative culture not only tolerates but anticipates failure:  it gets out good drafts quickly, and revises in response to community feedback.  Iterative, speedy releases of “minimal viable products” shorten the product development cycle by eliciting critical information, which is used to improve the final product. 

These lessons are as valuable for the non-profit in the process of developing new programs as they are for businesses developing new products.  Precisely because our work is intended to significantly improve human life, mistakes in judgment and design can be costly indeed, especially if they are not quickly acknowledged and addressed.  Using design thinking principles – beginning in empathy to thoroughly understand clients’ experience, and proceeding with rapid iteration and learning – can help the non-profit create a culture that tolerates the “honorable failures” that, well-used, result in greater effectiveness.

My brief summary of this CGI-U panel captures some of the major points but little of the flavor of this lively exchange.  I hope you’ll take a listen yourself and let me know what you take away from it.

I’ve been thinking a lot about “failure” lately –

·         about how powerhouse innovators valorize “failure” as necessary learning (“fail faster,” “fail forward”);
·         about how curious it is that the English language offers no adequate word that encapsulates this positive view of failure (the multitude of alternatives for “failure” include blunder, fizzle, flop, flounder, catastrophe, bomb, fiasco, be ruined, and hit the skids); and 
·         about how failure in some contexts is, in fact, disastrous. 
This is a topic widely discussed these days in both for-profit and non-profit businesses.   My next few posts examine three interesting discussions of failure.

“Smartfailing” – essential learning from a smart try

InnoCentive is the global leader in crowdsourcing innovative solutions to important business, social, policy, scientific, and technical challenges by inviting tens of thousands of people to compete to provide ideas.  The organization’s recent white paper, “Embrace Failure to Build a Stronger Innovation Culture,” authored by Stefan Lindegaard, is smart, efficient, and thought-provoking. 

Lindegaard argues that one of the biggest failures a business can make is failing to learn from “failures.”  He cites author Paul Sloane’s distinction between “honorable failure” – in which something new has been tried unsuccessfully – and “incompetent failure” – which results from lack of effort or competence in standard procedures.  Lindegaard offers the term “smartfailing” to capture both honorable failure and an organization’s success in learning from it.

Lindegaard builds on entrepreneur Steve Blank’s observation that successful innovators go through six stages when faced with failure.  Blank’s first five stages mirror Elizabeth Kubler-Ross’s five stages ofgrief in response to death:  1 – shock and surprise; 2 – denial; 3 – anger and blame; 4 – depression; and 5 – acceptance.  Blank adds a 6th stage – insight and change – to capture the potential creative outcome of failure.  Unsuccessful innovators – and most businesses Lindegaard has surveyed – never get past stage 4: depression.  And, he found, way too much time is wasted in the anger and blame of stage 3.  In fact, failing to get past stage 4 is a determinant of real failure, as opposed to “smartfailure.”

Lindegaard’s prescription for successfully getting past stage 4 and into stages 5 and 6 requires serious emotional and intellectual discipline on the part of innovators and organization leaders.  Lindegaard’s Rx includes -- 

.            taking responsibility; 
.            understanding what went wrong; 
.            being transparent and communicating better; 
.            rewarding behaviors, not just outcomes;and
.            educating up and down.  

I don’t think any organization can succeed in such rigorous practice without having undertaken – consciously or in a very rare natural developmental course – an experience something like the expressive change (or “inscaping”) process described by Tana Paddock and Warren Nilsson.

I hope you’ll read Lindegaard’s paper and let me know what you think.