How Fast Are You Failing?

Tucked at the end of a Business Week profile of the challenges facing Merck (full disclosure: client) are details of a "kill fee" incentive for scientists to declare certain initiatives as failed. Reaching critical "no-go" decisions sooner means those lessons can be shared with others -- potentially heading off other unproductive efforts -- with resources shifted to more promising projects.

This shows why unit sales, income or new product introductions are flawed metrics in determining innovation success. Mean-time-to-failure or mean-time-to-action can be just as valuable in identifying whether process and projects are effective. Imaginatik Research has seen incentives for participation prove as motivating as recognition for leading an ideation event.

Management consultants say rewarding misses as well as hits is the right idea, and one that the entire industry will need to adopt. "The earlier you determine when something should be killed, the better," says Charlie Beaver, vice-president at consultant Booz Allen Hamilton Inc. Still, he warns, changing a corporate culture from one that thrives on success to one that also accepts failure "is a very large hurdle to overcome."