Why Innovation Can Kill Morale

in·no·va·tion

[in-uh-vey-shuhn]

–noun 

1. something new or different introduced

2. the act of innovating;  introduction of new things or methods.

 

Everyone wants innovation these days.  So much so that some companies have created a Chief Innovation Officer position, and kicked off innovation programs.  Being seen as innovative is important for the company image and helps your company attract talent.

But the definition of “something new” means that innovation involves pushing people outside of their comfort zone, and this is not without risk.

By it’s very nature innovation carries with it the potential for failure.  People will be feeling their way, researching new ideas, and learning by trial and error.  And it is that last part – error – that is a critical part of the innovation process…and which creates problems.

Innovation inevitably means some programs will not yield a useful end product.  But even programs that fail provide real world experience and that experience is going to pay big dividends on future projects.  Past failures provide the experience to see problems earlier and deal with them before they get out of hand.

Silicon Valley is successful in large part because of their high tolerance of failure.  As the Economist put it “bankruptcy [in Silicon Valley] is treated like a duelling scar in a Prussian officers’ mess.”  Silicon Valley doesn’t necessarily have better people, but it does know how to fail properly, which includes identifying the useful components of a failure and recycling them elsewhere.

But many companies haven’t grasped this concept.  They ask people to innovate, but then punish teams whose projects fail by marking them down in annual reviews.  This means innovators have less opportunity for advancement, lower pay and, ultimately, poor morale.  Not exactly the mindset companies are looking for in the people creating their future.

Companies rationalize this by saying “We have to continually improve, which means dropping the low performers”, and that makes sense if the low performers are the ones doing the same jobs year after year, but not when people are forging new paths.

If you punish innovation failure then don’t expect people to flock to your next innovation, regardless of how tempting it is.

Companies that are intolerant of failure create a culture that is comfortable with the status quo and, often, actually fight innovation (the corporate antibodies).    In todays hyper-connected world word gets around quickly, and companies suddenly find that the best talent is simply not interested in talking to them for fear of stagnation.  This causes panic in the boardrooms which then leads to…another innovation program…

But it doesn’t have to be that way.  Innovation is risky, but risks can be managed.  Here are a few simple suggestions:

• Learn to identify failures early, before they eat up too much capital and become too big to fail.  Have checkpoints built-in to every project with clearly understood rules about what it would take to get approval for the next step.  Sites like Killer Innovations have great tools for setting programs up the right way.
• Don’t create an environment where a failure means someone is out of a job, as this just about guarantees that early failures will never be identified – at least not by the people close enough to the problem to spot it early.
• Review every project – good and bad – to find what worked, what didn’t work, and see if there is anything that can be reused in other areas.

Above all, understand that without failure you can never create anything truly new, so look for the people who are comfortable with risk and nurture them.  Creativity and innovation can be fun, and if you can create a culture where people have fun at work you will have to beat the top talent away with a stick.