Seeking Initiative and Innovation? Reward Failure!
By Jim McCormick
Based on Proprietary Research
"If you want to increase initiative and
innovation, you have to encourage and embrace failure. A culture
that punishes less-than-ideal risk-related outcomes will stifle
both initiative and innovation".
Prevailing in the face of intense competition
requires companies to be nimble and innovative.
An innovative and high-initiative culture helps
an organization respond better to market signals. It can better
exploit opportunities, get new products and services to market
more quickly and more often capture first-mover advantage.
I had an opportunity to conduct some proprietary
research recently that sheds light on how to increase innovation
and initiative-taking in organizations.
I was retained by the research and development operation
of one of the world's largest consumer products companies.
In the past few years, they had acquired another consumer
products company with some well known and highly regarded
brands. The problem was that the acquired company had a risk
avoidance culture in stark contrast to the acquiring company's
more risk inclined culture.
The talented scientist and engineers in the
R&D operation were a valued element of the acquisition. But
the ingrained risk aversion within the R&D staff was resulting
in insufficient innovation.
My task was to help these high value team members
expand their comfort zone and become more risk inclined.
Prior to the time spent on-site at the research labs, I conducted
an anonymous on-line survey for the R&D staff. The survey
addressed the following questions.
- Organizational Culture ‚ How, if at all, has the risk
culture changed in your organization in the last few years?
- Risk Hesitancy ‚ What is your primary source of hesitation
when it comes to taking work-related risks?
- Risk Catalysts ‚ What would make you more comfortable
taking thoughtful, well-considered work-related risks?
Forty four people responded to the survey. The
results of the survey yielded some fascinating insights.
Survey Result Highlights
What is your primary source of hesitation when it comes
to taking work-related risks?
- The Implications of Failure ‚ 59%
- Lack of Permission, Leadership, Support or Organizational
Capability ‚ 14%
- I Have No Hesitancy ‚ 5%
What would make you more comfortable taking thoughtful,
- Less-than-ideal outcomes being commended and not having
a negative effect on career. ‚ 49%
- Leadership Direction and Support ‚ 31%
- Already Comfortable Taking Such Risks ‚ 8%
Note: Responses have been grouped by category.
Respondents were provided an open ended essay format for
their responses with no suggested answers provided.
The great majority (61%) of those responding said they were
being encouraged to take more risks. The balance, in pretty
much equal proportions, said there had been no significant
change in the last few years (21%) or they were being encouraged
to take fewer risks (18%).
Clearly, the leadership of the organization
had sent the message that more risks needed to be taken.
When asked about their primary source of hesitation in taking
work-related risks, almost six in ten (59%) said the implications
The second most common response was provided
by only 14% and centered on a their perceiving a lack of permission,
leadership, support or organizational capability as making
them hesitant to take risks. Five percent said they had no
The balance of the responses fell into many
categories but focused on time and resource constraints.
When asked what would make them more comfortable taking thoughtful,
well-considered work-related risks, fully eight in ten said
either assurances that less-than-ideal outcomes would not
negatively effect their regard or career (49%) or clear direction
and support from leadership to take risks (31%).
Eight percent reported that they were already
comfortable taking risks. As with risk hesitancy, the balance
of the responses fell into a variety of categories but again
focused on time and resource constraints.
The message of the respondents is clear.
The survey data shows that the respondents were
calling out for permission to take risks and a clear understanding
that unsuccessful risks would not hamper their opportunities,
regard or advancement.
The clear conclusion is that people who take
thoughtful, well-considered risks have to be lauded, regardless
of the outcome of the risk.
If you want to increase
initiative and innovation, you have to encourage and embrace
failure. A culture that punishes less-than-ideal risk-related
outcomes will stifle both initiative and innovation.
Increasing initiative and innovation requires five simple
- Clearly communicate the risk profile you are asking your
people to adopt and why it is important to the organization's
- Never allow an unsuccessful risk to hamper a team member's
opportunities and advancement.
- Establish a high-profile award program that rewards BOTH
risks that pay-off and well-considered risks that do not.
Awards need to be announced simultaneously and rewarded
- Establish a formal non-critical process for gleaning the
lessons from unsuccessful risks. Communicate the lessons.
- Provide your people with situation-specific risk assessment
tools to help them make better risk-related decisions.
"A Culture of Screw-Ups"
Increasing the level of effective risk-taking, initiative
and innovation in an organization is not a short-term process.
Risk inclination and risk tolerance are core elements of an
organization's culture. It is part of what defines the organization.
But it can be gradually changed by implementing the steps
above, being consistent in emphasizing the importance to the
organization of taking thoughtful risks and rewarding initiative
If you are questioning the value of a culture
that encourages risk-taking as a path to success, consider
this statement by Scott Bedbury as reported in Newsweek. Bedbury
was head of advertising at Nike for seven years in the 1990s.
He says the key to Nike's success is its willingness to embrace
"a culture of screw-ups. It really does learn from its
mistakes." An insightful comment about Nike ‚ one of
the most successful and innovative companies of our time.
© 2004, Jim McCormick. All rights in all
About the Author
Jim McCormick draws on his experience as the former Chief
Operating Officer of an international design firm, an MBA
and a degree in engineering to help organizations improve
performance. He is co-author of Motivational Selling,
editor of 365 Daily Doses of Courage and author of
the forthcoming book Seize Opportunity ‚ A Practical Guide
to Exploiting Opportunities. More information is available
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