| || ||Satyamoorthy Kabilan |
National Security and Strategic Foresight
It is generally accepted that innovation is risky business. Not everything new that you try will succeed. What is not always appreciated is how risky innovation can be. If you are trying something new and truly innovative or ground breaking, then, by definition, it has to be very risky. The oft-quoted success ratio for venture capital firms is about 1 in 10—that is, one company that does so well it can repay the entire investment portfolio and generate a significant return. There is a lot of debate around the exact ratio of success, but it is low.
So, if we essentially have low success rates for innovative ventures, that means we have an awful lot of failures. What happens to the failures? And is there value in them? We rarely ever hear about the failures as they do not make for a good story. It’s the successes that are constantly exalted and publicized in the media and even business school case studies. Are we missing something here by not building a better understanding of our failures in innovation?
I was lucky enough to study and then work within one of the most innovative biotechnology environments in the United Kingdom. My PhD and subsequent post-doctoral position was at the University of Cambridge’s Institute of Biotechnology. One of the great things about working in this department was the constant sharing that occurred, particularly around our struggles and failures. The teams and individuals I worked with found it very useful to share what didn’t work alongside the successes. Sometimes this stopped other researchers from going down dead end paths. Other times, by sharing the failures, someone within the multi-disciplinary environment in the department would come up with a potential solution.
This process of sharing was formalized through a number of regular events, with students as well as established researchers sharing triumphs and struggles. Basically, we had a knowledge management process for sharing failures.
My department and my team had one of the best records for patents and subsequent spin-out companies at the University of Cambridge. In hindsight, as I look back with the benefit of experience and my MBA training, sharing failures and having a knowledge network across the department for doing so played a key role in the success we enjoyed.
The literature on creating safe environments in which people can take risks and fail as part of encouraging innovation has been growing. More importantly, we are starting to see a lot of work on “failing smart” and learning from our failures. It is inevitable when we try new things that we will encounter failure. What we need to recognize is that truly innovative ventures will have more failures than successes. That means that we will have a lot of knowledge on failure—more than we will on success.
In a previous blog, I mentioned the link between knowledge management and innovation, and how important it is to leverage the knowledge within organizations to help drive innovation. That knowledge base needs to cover failure as well as success. Knowing where the dead ends are is very important if we want to keep moving forward with successful innovation, and effective knowledge management has a big role to play in this. This is one of the themes that we hope to continue to explore through our work with the Council for Innovation and Commercialization and the Council on Information and Knowledge Management.
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Intelligent Failure with Ashley Good, September 26, 2014 at 2:00 EDT