Back to Writing

The Inverse Innovation Cycle: How Failure Becomes Success and Success Becomes Failure

The Inverse Innovation Cycle: How Failure Becomes Success and Success Becomes Failure

There’s something that leaders don’t tell you about success. It occurs in a seemingly inverse order: after failure and then before it. It’s the strange cycle that characterizes all innovation: the failure that comes with experimentation actually teaches us the lessons necessary for success and the success that comes with growth encourages complacency and failure.

I saw firsthand this phenomenon of the failure cycle when I worked with a major multinational manufacturer. The organization sold a wide array of products–indeed, so wide that it had little ability to synchronize or leverage them to its advantage. Spread over dozens of brands in a multitude of markets, the company grew through acquisitions but never really integrated its products or coordinated its marketing of them. Despite its seeming overall success, the growth of organization stalled. While its products were known around the world, the company itself had never became a household name. Troubled by too many conflicting purposes and lacking a shared strategy, the leaders didn’t know how to make the company worth more than the sum of its parts.

The CEO had heard me talk at an industry conference and asked me to work with his executive team on ways to develop the hybrid innovation competencies necessary to work across a wide array of organizational boundaries. This was a matter of connecting the dots: synching up divisions, disciplines, and regions that were previously separate entities. The goal was to build the common architectures and establish the shared processes that would make the organization a more cohesive, powerful presence.

The company needed a radical overhaul of its culture and strategy. It needed its leaders to think differently. Unfortunately, many of its senior leaders were daunted by this abstract task and preferred the comfort and reassurance of the operating rhythm checklists they had relied on all along: linear technology roadmaps, tight product portfolios, and sequential metrics.

One division stood out among the others both in their ability to conceptualize the opportunity and to develop a wide array of integrated breakthrough solutions. Through ideation, experimentation and a little luck, they pierced some of the fog of the future and pieced together some existing products and services to create something truly original and compelling. This division eventually achieved significant growth while the others didn’t. It was so successful that the organization sold this division to another manufacturer for a substantial profit.

In its new home, though, the once-successful division encountered the same types of my way or the highway rules and tools posing as strategy: overwhelmed by process and too dependent on the rigidity of checklists, it stalled in its growth.

Over time, the star talent–the individuals willing to engage the uncertainty and complexity of opportunity–left for smaller, more cutting-edge firms, and yet, the stock price of the multinational manufacturer continued to grow at the same incremental rate it always did.

It’s an uncomfortable fact we simply can’t get around: innovation happens in the future for which we have no data now, so it is ambiguous and requires constant course corrections. Innovation does not have an end date: as soon as you think you’ve reached your goal, you’re susceptible to falling into a new rut. While processes may add momentary stability and safety to an organization, they also eliminate deviance. You can’t innovate if you don’t first deviate.

It may be true that a checklist will help you reach an opportunity more efficiently. But if that opportunity is a dynamic work in progress then that checklist just brings you a little faster and closer to the same well traveled places where failure knows how to find you. The next best idea is always the one that never makes the list anyway.

Share this article