How to overcome fear of failure and foster innovation

There is an undeniable appeal to underdog stories in which the protagonist endures failure and frustration, but soldiers on to achieve success.

Sir James Dyson famously went through 5,126 prototypes before he finally perfected the dual cyclone bagless vacuum cleaner that made him a fortune.

Meanwhile, Steve Jobs spent years in the wilderness after being fired by Apple, before returning to the company he co-founded to introduce the world to the iPhone and the iPad.

Despite this, a fear of failure remains deeply ingrained for many of us. This is a particular problem in entrepreneurship and innovation, where failure often serves as a vital stepping stone to success.

Many companies – particularly tech firms which rely on new products and services – now tolerate or even embrace failure.

When Google Wave failed, the team that developed the new platform were rewarded with bonuses.

Several of them were later assigned to flagship projects like Gmail and Google Maps, where their previous experiences helped to make those products a success.

The message was clear – Google rewards staff who take calculated risks to develop new products.

Should companies celebrate when new products fail?

Gore-Tex manufacturer WL Gore goes even further, holding ‘failure parties’ with beer and champagne to celebrate projects that don’t work, just as they would for those that do.

However, our understanding of how and when failure normalisation enhances product innovation remains limited.

That is why my co-author Xiangming Tao, from the University of Sussex Business School, used sense-making and motivation theories to explore what drives teams to create more innovation products.

Our inquiry took us to the beating heart of Shanghai.

New product development (NPD) projects are the lifeblood of high-tech ventures in emerging markets, but they are also fraught with risk.

This made China’s high-tech powerhouse an exciting location to investigate the innovation process.

We collected data from 181 high-tech ventures between September 2018 and March 2021. And while our subjects were set among Shanghai’s skyscrapers, our findings could be applied equally well to high-tech ventures in London, San Francisco, Singapore, or beyond.

Normalise failure... but beware complacency

There is little doubt that employees are more willing to experiment in an environment where failure is tolerated.

When team members review their failures and challenge their previous beliefs, they have the opportunity to learn from their mistakes and adapt their approach. This can act as a catalyst for innovation and improved outcomes.

However, there is no evidence to support the widely-held assumption that individuals and organisations automatically seize this opportunity to learn from failure.

Companies often struggle to capture lessons from failures because project teams tend to be disbanded once the product or service they are developing has failed.

Our findings revealed that a failure-tolerant culture can also be a double-edged sword.

While failure normalisation can provide a ‘psychologically safe’ space for innovators to embrace project failure as a learning opportunity, it can also encourage a reduced sense of responsibility.

In such cases, failure loses its sting – and with it, its power to teach. This can lead to decision-making without due diligence, declining standards, and a lower quality of work.

This is where motivation plays a vital role.

Select leaders with a passion for inventing

It is not enough to simply encourage a culture of learning from failure. The NPD process is much more complex than that.

As we weighed different variables in our data, it became increasingly apparent that learning from failure was contingent upon a project leader’s passion for inventing.

This should not be confused with a leader who is interested in project development or has entrepreneurial flair.

It is specifically someone who identifies as an inventor and experiences intensely positive feelings when creating new products and services.

This motivation is particularly important for project leaders who are involved in NPD, because they have the power to promote innovation in the development process and decide when to terminate projects because they are failing to meet performance expectations.

They may also have a different view of what constitutes ‘failure’ to other team members, as they have to consider a broad range of contexts – such as whether a product or service is failing to meet business objectives, even if it appears to work effectively.

Project leaders who are fuelled by their passion for inventing are more likely to prevent a new product from failing, and more likely to learn from their mistakes to improve outcomes in future.

Combine passion with tolerance to encourage innovation

Previous research has tended to study the roles of failure normalisation and passion in isolation.

However, our findings show that high-tech companies aiming for product innovation should cultivate a learning culture that normalises failure and promote project leaders with a passion for inventing.

When they do, project leaders are less likely to view project failure as the end of the innovation journey. Instead, they are more likely to treat failure as a learning opportunity.

This enables them to gather and review more information about failed projects, even if that process feels uncomfortable, then apply the lessons they have learned.

An added benefit of this approach is that the project leader’s passion can be contagious, promoting commitment, effort, and creativity from colleagues instead of complacency.

Managers can build on this by embracing risk and releasing innovative products and services in to the market without assigning blame if they do not succeed. Fostering a willingness to ‘fail fast’ and learn from the experience can provide the catalyst for future success.

This dual approach of normalising failure and promoting project leaders with a passion for inventing shifts away from the traditional business folklore dominated by lone mavericks such as Steve Jobs.

In future, the revolutionary products of the future may well be forged by companies that create a supportive culture where change makers and innovators can thrive.

Further reading:

Can diverse workplaces increase innovation?

When should entrepreneurs trust their gut instinct?

The key leadership skills for leadership growth

Why have German carmakers lost their competitive edge?

Deniz Ucbasaran is Professor of Entrepreneurship at Warwick Business School. She teaches Entrepreneurship and New Venture Creation on the Executive MBA, Executive MBA (London), Global Online MBA, and Global Online MBA (London).

Xiangming (Tommy) Tao is Assistant Professor of Innovation and Project Management at the Science Policy Research Unit at the University of Sussex Business School.

Learn more about the Executive Education programme Leadership for a Complex World at WBS London at The Shard.

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