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Marketing Creativity Innovation

When successful companies fail better

By Uri Baruchin |

October 5, 2017 | 5 min read

There’s no innovation without failure, so why do organisations find it so hard to let people fail?

when successful companies fail better

With the uncertainty of the current economic climate, it has never been more important to innovate and be open to change. It’s a universal archetype that change often goes hand-in-hand with destruction. It harks back to the myth of the great deluge: for the new to emerge, the old must die. Such a theme seems just as relevant in our age of business disruption, in which new models and paradigms are coming to the fore, disrupting and destroying what came before them.

Of course, this isn’t the first time such disruption has happened – just think of the weavers and horse-drawn carriages during the industrial revolution. But it’s happening today in multiple sectors. In travel, through compare-and-book engines. In hospitality, through Airbnb and other new models. In transport, via Uber, electric cars and, in the not-too-distant future, autonomous cars. In professional services, where technology replaces and repackages service elements that used to require people. And all this even before AI truly emerges and potentially disrupts the notion of work, if not humanity, as we know it.

There’s no change without destruction and no success without failure. Which is why the internal quest towards change and innovation will be, by definition, intertwined with failure.

Innovation causes disruption. But innovation also requires disruption to be innovative. Creativity is an exploratory process that is bound to yield a lot of wrong ideas before you reach the right one. And so, on the way to discovering those breakthrough changes which are useful and sustainable, a lot will simply fail. Even the breakthroughs that do succeed, could still cause your old products and services to fail – by disrupting them, cannibalising them or making them obsolete. Well, better your own work than that of your competition.

New opportunities almost always contain the potential for failure, and there are many stories about the failures which precede breakthroughs. Thomas Edison famously tried hundreds of materials while searching for the right filament for his lightbulbs; apparently he knew “definitively over 9,000 ways that an electric light bulb will not work”. Dyson apparently went through 5,126 failed prototypes for his vacuum. The indispensable WD40 spray is famously named that way because it was the 40th iteration of the formula.

My favourite failure and innovation story is Post-It notes. Maybe because to this day they are widely used to capture ideas – some will succeed and many will fail. It’s a story of time: the adhesive used for Post-It notes was created by accident and then took 12 years to become a product. Time well spent, as 3M now reportedly sells 50 billion Post-It notes across 100 countries every year. It’s a company that values experimentation, and famously lets its scientists and engineers use 15% percent of their time pursuing their own project. And that story contains, in a nutshell, all you need to know about failure and innovation.

But failure can cause disruption and cost to a company and there’s always a risk that it would be unsustainable. That’s why failing isn't enough. You need to fail better. Think of it as ’sustainable failure’: going after worthy opportunities, exploring valuable concepts, and in a way that allows continued experimentation.

To fail better you need time, resources and agility. Failing faster is crucial, allowing you to learn and move on to the next attempt quickly – until you get it right. Iterative design is highly suitable for this approach, and our world of digital environments and tools, where the blueprint and the solution often exist in the same medium, is highly conducive for better, faster, failure.

But the things organisations need to be able to fail better are the very things that hold most organisations back. Time and resources are always expensive for businesses who watch the bottom line carefully, and the bigger and more complex an organisation becomes, the more that speed becomes a challenge. That’s not to say that small organisations fair better: even if they have more agility, time and resources can be even more restrictive and risky for them to play with. Their stability is more easily threatened.

Everybody wants to be Apple or Google but few organisations are willing to make the investment and take the risks. Like 3M, Google is estimated to give people 15-20% of their time to freely explore projects outside their job (although, apparently, in a more closely managed manner). There’s a sweet spot where a culture of innovation allows defined spaces for risk-taking and failure. Some of the most successful innovators today are big technology companies who manage to create pockets of experimentation where they can be as innovative and agile as startups.

As Mario Andretti once said: “If everything seems under control, you're not going fast enough.”

You can start with a small step rather than a giant leap, creating opportunities for idea generation or processes that allow for rapid prototyping and trial. But whatever you do, you can’t get away from the need to innovate. And you can’t innovate without failure.

If you want to innovate, be ready to fail. Just learn to fail better.

Marketing Creativity Innovation

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