Silicon Valley so successful as the engine of high-tech growth is the
Darwinian process of
Commentator and author Mike Malone puts it like this, 'Outsiders
think of Silicon Valley as a success, but it is, in truth, a graveyard.
Failure is Silicon Valley's greatest strength. Every failed product or
enterprise is a lesson stored in the collective memory. We don't stigmatize
failure, we admire it. Venture Capitalists like to see a little failure in
the résumés of entrepreneurs.'
3 Strategies of
Charles Schwab journals
their failures and lessons they've learned. They maintain also a display of
failed innovations and created a videotape for employee orientation. When
noble failure becomes institutionalized, people within the organization
are more willing to
reassess earlier decisions and take corrective measures...
innovation is all about
taking risks and learning from failure," writes
Michael Dell in his book
Direct from Dell. "To tap into this kind of
innovation, we do our best to make sure that people aren't afraid of the
possibility of failure, and we do a lot of
experiments. For instance, one
of our managers in the consumer group came up with the idea to offer
installation service to consumers in order to reach people who might be
apprehensive about setting up a new computer. The idea seemed like it would
help out a group of customers, and it made a lot of sense from a cost
standpoint as well. We knew from our experience with business customers that
when our staff installs a computer, the incidence of set-up failures is
almost zero. The consumer team threw around the idea, did a pilot with one
salespeople, and found out what worked and what didn't. Within two
weeks, we'd made this service available to every consumer in the
States. I actually found out about this by accident – it wasn't something
that we had a bunch of meetings about in boardrooms.
Incremental improvements and experiments happen all the time."
"Mobilize your people around a singe goal. A
company of self-reliant "owners" sounds great in theory, but it can be chaos
if the goals aren't clear to all," says Michael Dell. "At Dell, it's worked
for us because we came up with a consistent
strategy and well-articulated
Johnson & Johnson
"If you are not
won't succeed. If you can't succeed, you can't grow," said Robert Wood
Johnson, former chairman of Johnson & Johnson. "Companies with a high
awareness of culture's importance to
innovation have visible, tangible, and frequently humorous reminders
that it's okay to take risk – that a person won't be beheaded for sincere
attempts that fail."
10 Rules for Building a Successful Business, Sam Walton, the Founder of
"Find some humor in
your failures. Don't take yourself so seriously. Loosen up, and everybody
around you will loosen up. Have fun. Show enthusiasm –
always. When all else fails, put on a costume and sing a silly song. Then
make everybody else sing with you.
Don't do a hula on Wall Street. It's been done. Think up your own stunt. All
of this is more important, and more fun, than you think, and it really fools
competition. "Why should we take those cornballs at Wal-Mart seriously?"...
Sheryl Sandberg, a vice president in charge of the company's automated
advertising system committed an error that cost Google several million dollars.
When she realized the magnitude of her mistake, she went to inform
Google's co-founder and unofficial
Thought Leader . "God, I feel really bad about
Sandberg told Page, who accepted her apology. But as she turned to leave, Page
said, "I'm so glad you made this mistake, because I want to run a company where
we are moving too quickly and doing too much, not being too cautious and doing
too little. If we don't have any of these mistakes, we're just not taking enough
"Golden Turkey Award"
One company interested in addressing a serious
deficiency in risk taking established a “Golden Turkey Award” that was given
quarterly, with a light-hearted yet serious spirit, to the individual or
team with the greatest “innovation failure.” Given publicly by the CEO, the
award became a symbol of the importance of accepting and proactively
learning from failure as an essential element of the
message from the top that failure is part of the
something that, CEO and Chairman of Coca-Cola, E. Neville Isdell, did at
their annual meeting in April 2006, where he declared: “You will see some
failures. As we take more risks, this is something we must accept as part of
the regeneration process”. Isdell wanted Coca-Cola to take bigger risks,
tolerate failures and change Coke’s traditional risk-averse culture. Failure
is so important to the
experimental process, without it there is no learning. The key is to
intelligent failures, and preferably those that happen early and
inexpensively, which then lead to new
insights about customers.
Punishing for falling short of a
stretch goal is counterproductive. "If the company aimed at 15 and made
12, celebrate. What's critical is setting the performance bar high enough;
otherwise, it's impossible to find out what people can do," says
Jack Welch, the former legendary CEO of