Harvard Business School professor Stefan Thomke says there’s nothing wrong with failure: “Innovators learn from failure: Understanding what doesn’t work may be at least as important as understanding what does, provided these failures are revealed *early* in a project and are swiftly reexamined. Learning from failure is a boon at this point: Few resources have been committed and decision making is flexible, meaning that other approaches can themselves be tested. Thus experiments that result in failure should not be viewed as failed experiments.” Experimentation is an iterative process of understanding what works and what doesn’t, says Thomke, with both results equally important for learning. But because companies tend to emphasize success over failure, the lessons that could be learned from failures are often ignored until much later in the process, when changes can cost millions of dollars. This tendency is exacerbated by today’s obsession with cost savings: Companies sometimes try to save money by clustering experiments into one big test or delaying them as long as possible so that results are more likely to verify “success.” Instead, Thomke recommends taking advantage of technologies like computer simulation, which are only 70% to 80% as accurate as traditional methods but are cheap and can deliver results faster. But the biggest obstacle, says Thomke, is the strong corporate bias against failure: “Failure exposes gaps in knowledge and can lead to embarrassment, and the people ‘responsible’ are unlikely to be promoted within traditional incentive systems. Ask yourself: How often are people rewarded for exposing failure early?” Meanwhile, Thomke says managers should learn to recognize the difference between failures and mistakes. “Failure can be a desirable outcome of an experiment, whereas mistakes should be avoided as they produce little new or useful information and are therefore without value.”

HBS Working Knowledge 11 Aug 2003