Wednesday, August 08, 2007

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."

4 comments:

Anonymous said...

Tenacity is also important. Many of the great innovations listed in the 101 Innovation breakthroughs (http://www.innovation-management.com/101) would have been killed except for the persistance and passion of individuals.

As a company, the killing of bad projects is important to reallocated resources to the right projects but has risk that it becomes a linear stage-gate process without the flexibility of incorporating options, enabling technologies and learning.

H. Martin Calle said...

position failure as an opportunity to begin again, more intelligently.

H. Martin Calle said...

Position failure as an opportunity to begin again, more intelligently.

Amit said...

While killing of bad products may be best for reallocating resources, I think that the fact that why unfruitful projects are taken is also important. Obviously higher-ups felt the project was prudent, or workers are given a lot of freedom to pick projects (and possibly fail). Google's current method of 70/20/10 (70% of time spent on working on the core, 20% of time spent on own projects, 10% of time spend on others projects) is great because employees can police themselves on the projects. Obviously, in an industry like healthcare, more responsibility should be put towards quickly finding why projects failed in order to minimize those.

Brilliont