Strategy #16: Celebrate good faith “failures”

When asked to comment on the secret of success, Soichiro Honda (the man whose name is on the car) said that it was 90% failure and 10% introspection (understanding cause of the failure and fixing it). When people are afraid of failure, you will not have an innovative organization; that’s why Dr. W. Edwards Deming made “drive fear out of the workplace” one of his 14 points for total quality management. Creating a culture that honors good faith failure is also a key factor in fostering a loyal workforce. If people are afraid of being punished for failure, you will eventually lose your most creative and talented people. On the other hand, when you have a reputation for standing behind the people even if they have failed spectacularly, you will attract more creative and daring people, and keep the ones you have.

There’s a well-known story from the early days of IBM. A young IBM executive made a five million dollar blunder, and was called into the office of CEO Thomas Watson. “I suppose you’ll be wanting my resignation,” the young man said, hat in hand. "Your resignation!"  Watson thundered. “I just spent five million dollars on your education. Now I want to see a return on that investment.” Is it any wonder that IBM, for decades, was able to attract and retain the best engineers in the country?

Mayo Medical Ventures is the for-profit venture arm of the Mayo Medical Clinic. Every year, they give the “Queasy Eagle” award to the individual who most spectacularly lost money on an investment. It cannot have been a stupid decision, and it’s unlikely that people get repeat awards, but I’m told that having a Queasy Eagle trophy on your bookshelf is a high honor within that company – even better than having one of those cliché eagles that adorn all of the other trophies and posters extolling us to greatness.

What more can you do to encourage your Eagles to fly, and to honor their good faith failures should they crash?

“Nothing undermines innovation more effectively than fear. By the same token, nothing encourages innovation better than finding ways to cope with fear. Real innovation is most likely to take place among those who aren’t hamstrung by anxiety.”

Richard Farson:  Whoever Makes the Most Mistakes Wins

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