What do Michael Jordan, Woody Allen, Thomas Edison and Ingvar Kamprad have in common? Being great risk-takers and self-declared failures, all of them stand good chances of losing their jobs in the average modern corporation.

A number of surveys conducted over the past year with corporate leaders and senior managers indicate that failure is seen as negative in most companies and might have negative career implications. No wonder that most businesspersons are afraid of making a mistake, losing a deal, or trying out anything risky, as failure reflects negatively back on the loser and may lead to serious negative consequences (in a sense of “Make a mistake once, you get a pay cut or a similar form of punishment. Make it twice, you’re fired”). In the Asian context, the fear of losing face both on the individual and organizational level further reduces the willingness to take risks and to possibly fail. “Better safe than sorry” describes the prevalent resulting climate in many Asian firms.

Now realize that risk and chance, as well as failure and success, are necessary complements, are two sides of the same coin. For example, if you want to achieve a higher yield on an investment, you need to choose an asset category with an inherent higher risk, and vice versa. In order to help you understand the symbiotic relationship between failure and success, let’s hear it from our “loser’s parade” featured above.

• Michael Jordan became the most successful NBA player because he planned to fail: “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over in my life and that is why I have succeeded.”
• Another North-American sports legend, NHL-hockey top scorer Wayne Gretzky similarly planned to fail: “You miss 100% of the shots you never take.”
• Moving from the world of sports to the performing arts: Woody Allen is regarded as one of the leading film directors because he planned to fail: “If you are not failing every now and again, it’s a sign you’re not trying anything innovative.”
• Getting back to the world of business: IKEA founder Ingvar Kamprad summarized the paralyzing effects of a risk-averse culture and the necessity to allow his employees to fail as follows: “Bureaucracy complicates and paralyzes. Exaggerated planning can be fatal. Only while sleeping one makes no mistakes. The fear of making mistakes is the root to bureaucracy and the enemy of all evolution.”
• One of the cornerstones of the corporate culture of long-term innovation leader 3M is the so-called McKnight Principle: “Mistakes will be made (by giving people the freedom and encouragement to act autonomously), but the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it is dictatorial and undertakes to tell those under its authority exactly how they must do their job. Management that is destructively critical when mistakes are made kills initiative — and it is essential that we have many people with initiative if we are to continue to grow.” 3M’s long-term chairman William McKnight understood that superior business growth based on innovation flows from a “plan-to-fail” attitude coupled with action-orientation.

Why does planning to fail seem to be such a great recipe for success, in innovation and other areas? Evolution functions on the basis of trial and error and the principle of negative feedback. Being a part of nature, we humans do so, too. Whenever you fail or make a mistake or error, just dispassionately observe the result as a piece of negative feedback indicating that your current approach is not working and that it is time to try a new one. So detach from a bad outcome and simply ask: What can I learn from this? How can I vary my approach? Then try again, and again, until you find the right approach. Similarly, the popular innovation technique of rapid prototyping also uses the same principles, as David Kelley of IDEO explains: “Prototyping lets you fail earlier to succeed sooner.”

The notion of trial and error and the principle of negative feedback were also at the heart of Thomas Edison’s innovation strategy. “I have not failed. I have just found 10,000 ways that won’t work. Many of life’s failures are people who did not realize how close they were to success when they gave up. I am not discouraged, because every wrong attempt discarded is another step forward,” commented Edison on his over ten thousand trials before finding the right design for a scalable light bulb. Adopt the same mental robustness and persistence of the great inventor toward failure.

My food for thought for all business leaders aiming to instigate more innovation inside their companies is: Initiate a cultural shift toward taking initiative and a higher risk-tolerance. Walk your talk by leading in harmony with three messages: Always remember that we grow and learn by trial and error, not by trial and rightness. Thus, plan to fail — and ask others to do so, too. Then fail and persistently try until you succeed.

© Dr. Detlef Reis 2008. This article was published in parallel in the Bangkok Post under the same title on 8 May 2008.