Sounds unconventional, doesn't it - rewarding a corporate employee for failure especially in the current economic climate? In fact surely it seems more likely that when an employee fails supervisors tolerate the mistake at best and, at worst, fire the employee. But to become the next breakthrough innovation, companies and their employees need to do a much better job rewarding employees for the innovative ideas that they submit and pursue, regardless of whether they succeed.
Rewarding failure is one of several interesting findings to emerge from an extensive piece of research that Accenture carried out on corporate innovation around the world. In addition, the research revealed that innovation remains a top priority for companies seeking to grow but flaws in managing innovation, such as not rewarding failures, are resulting in poor return on investment.
As oxymoronic as it may seem, the survey highlights that the best innovators not only know how to reward failure but, crucially, back this approach up when failures actually happen. If an employee's idea fails, they are reminded that it is not the employee who failed but the idea itself and employees are reassured that they will survive intact. Furthermore, these employers are sensitive when they decide to stop pursuing or reject an employee's idea, underlining that the creativity and value they bring to a team is not tied to a specific idea.
This approach is crucial because the risk of failure is an all-too-frequent innovation killer. Given this reality, companies are now often guilty of dreaming too small. By not rewarding failure, companies run the risk of having a product and service pipeline that is too conservative because employees are too timid about taking chances.
Accenture's research found that approximately 60% of respondents said their organisation has become more risk-averse regarding new ideas. And 73% agree that their company tends to pursue product line extensions rather than new, groundbreaking products or services. Furthermore, 53% said that their companies fail to learn from past mistakes.
To overcome these hurdles, companies need to focus on putting in place a mechanism to learn from past mistakes. Too many companies don't do this and are doomed to repeat them over and over again. They need to be more disciplined in how they track their innovation initiatives to make sure they know what failed previously so they don't go down that same path.
To improve the quality of ideas submitted, companies need to break down organisational silos that limit creative thinking. In the research, Accenture found that too many companies are compartmentalised into discrete, insular groups that don't co-operate with each other often enough. This lack of cross-pollination of ideas between different departments prevents the company as a whole from benefitting from the best ideas. Companies guilty of this behaviour are shortchanging themselves and thwarting any efforts they might have to achieve substantial growth through innovation.
Companies also need to realise that the existence of ideas alone will not suffice to achieve growth through innovation. There also needs to be sound structures for managing these ideas to ensure that they reach fruition at a commercial level.
Companies also need to embrace open innovation and collaboration and take advantage of external resources such as local universities. By opening the innovation process to a wide range of ideas, companies can benefit from a more robust and innovative idea pipeline that complements the creative thinking taking place within the organisation itself.
Becoming more open in innovation endeavors - in pursuit of the best possible ideas - also means relying less on traditional market research reports and more on suppliers, start-up companies, industry peers, and online forums and message boards. New social networking technologies provide the potential to locate ideas and encourage the kinds of dialogue and knowledge-sharing from which good ideas naturally emerge. Mass collaboration tools can be beneficial; once the initial idea is developed, it can be passed electronically to a set of participants, each of whom can add their individual insights and perspectives. Those responses are then read and enhanced by successive waves of participants, with each stage helping to take the overall ideas in new, diverse and potentially high-value directions.
The management of corporate innovation needs an end-to-end overhaul. The central goal should be to create a disciplined process in which a company systematically pursues breakthrough innovation without the fear of failure. For companies looking to drive high performance in the long term through innovation, the message is one that has been heard before: ‘Nothing ventured, nothing gained.' And it's key for companies to develop systematic 'machine-like‘ processes to bring more discipline to their management of end-to-end innovation initiatives.
Wouter Koetzier is global managing director for Accenture's Process & Innovation Performance Group
