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Copyright 2004 ã weLEAD, Inc
Seeking
Initiative and Innovation?
Reward
Failure
By Jim McCormick
Based on Proprietary Research
"If you want to increase initiative and innovation, you have to encourage
and embrace failure. A culture that punishes less-than-ideal risk-related
outcomes will stifle both initiative and innovation".
Prevailing in the face of intense
competition requires companies to be nimble and innovative.
An innovative and high-initiative culture helps an organization respond better
to market signals. It can better exploit opportunities, get new products
and services to market more quickly and more often capture first-mover
advantage.
I had an opportunity to conduct some proprietary research recently that sheds
light on how to increase innovation and initiative-taking in organizations.
The Situation
I was retained by the research and development operation of one of the world's
largest consumer products companies. In the past few years, they had
acquired another consumer products company with some well known and highly
regarded brands. The problem was that the acquired company had a risk
avoidance culture in stark contrast to the acquiring company's more risk
inclined culture.
The talented scientist and engineers in the R&D operation were a valued
element of the acquisition. But the ingrained risk aversion within the
R&D staff was resulting in insufficient
innovation.
My task was to help these high value team members expand their comfort zone and
become more risk inclined.
The Research
Prior to the time spent on-site at the research labs,
I conducted an anonymous on-line survey for the R&D staff. The survey
addressed the following questions.
1. Organizational Culture - How, if at all, has the risk culture changed in
your organization in the last few years?
2. Risk Hesitancy - What is your primary source of hesitation when it comes to
taking work-related risks?
3. Risk Catalysts - What would make you more comfortable taking thoughtful,
well-considered work-related risks?
Forty four people responded to the survey. The results of the survey
yielded some fascinating insights.
Survey Result Highlights
Risk Hesitancy - What is your primary source of hesitation when it comes to
taking work-related risks?
* The Implications of Failure - 59%
* Lack of Permission, Leadership, Support or Organizational
Capability - 14%
* I Have No Hesitancy - 5%
Risk Catalysts - What would make you more comfortable taking thoughtful,
well-considered work-related risks?
* Less-than-ideal outcomes being commended and not having a
negative effect on career. - 49%
* Leadership Direction and Support - 31%
* Already Comfortable Taking Such Risks - 8%
Note: Responses have been grouped by category. Respondents were
provided an open ended essay format for their responses with no suggested
answers provided.
Perceived Condition
The great majority (61%) of those
responding said they were being encouraged to take more risks. The
balance, in pretty much equal proportions, said there
had been no significant change in
the last few years (21%) or they were being encouraged to take fewer risks
(18%). Clearly, the leadership of the organization had sent the message that
more risks needed to be taken.
Risk Hesitancy
When asked about their primary source of hesitation in
taking work-related risks, almost six in ten (59%) said the implications of
failure.
The second most common response was provided by only 14% and centered on their
perceiving a lack of permission, leadership, support or organizational
capability as making them hesitant to take risks.
Five percent said they had no risk hesitancy. The balance of the
responses fell into many categories but focused on time and resource
constraints.
Risk Catalysts
When asked what would make them more comfortable
taking thoughtful, well-considered work-related risks, fully eight in ten said
either assurances that less-than-ideal outcomes would not negatively effect
their regard or career (49%) or clear direction and support from leadership to
take risks (31%).
Eight percent reported that they were already comfortable taking risks.
As with risk hesitancy, the balance of the responses fell into a variety of
categories but again focused on time and resource constraints.
Insights
The message of the respondents is clear.
The survey data shows that the respondents were calling out for permission to
take risks and a clear understanding that unsuccessful risks would not hamper
their opportunities, regard
or advancement.
The clear conclusion is that people who take thoughtful, well-considered risks
have to be lauded, regardless of the outcome of the risk.
If you want to increase initiative and innovation, you have to encourage and
embrace failure. A culture that punishes less-than-ideal risk-related
outcomes will stifle both initiative and innovation.
Action Steps
Increasing initiative and innovation requires five simple steps.
1. Clearly communicate the risk profile you are asking your
people to adopt and why it is important to the organization's success.
2. Never allow an unsuccessful risk to hamper a team member's
opportunities and advancement.
3. Establish a high-profile award program that rewards BOTH
risks that pay-off and well-considered risks that do not. Awards need to
be announced simultaneously and rewarded identically.
4. Establish a formal non-critical process for gleaning the
lessons from unsuccessful risks. Communicate the lessons.
5. Provide your people with situation-specific risk assessment tools
to help them make better risk-related decisions.
"A Culture of Screw-Ups"
Increasing the level of effective risk-taking, initiative and innovation in an
organization is not a short-term process. Risk inclination and risk
tolerance are core elements of an organization's culture. It is part of
what defines the organization. But it can be gradually changed by
implementing the steps above, being consistent in emphasizing the importance to
the organization of taking thoughtful risks and rewarding initiative and
innovation.
If you are questioning the value of a culture that encourages risk-taking as a
path to success, consider this statement by Scott Bedbury
as reported in Newsweek. Bedbury was head of
advertising at Nike for seven years in the 1990’s. He says the key to
Nike's success is its willingness to embrace "a culture of
screw-ups. It really does learn from its mistakes." An insightful comment about Nike - one of the most successful and
innovative companies of our time.
(c) 2004, Jim McCormick. All rights
in all media reserved.
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About the author:
Jim McCormick draws on his
experience as the former Chief Operating Officer of an international design
firm, an MBA and a degree in engineering to help organizations improve
performance. He is co-author of Motivational Selling,
editor of 365 Daily Doses of Courage and author of the forthcoming book Seize