You can’t talk business these days without talking innovation. The truth is, if you want your business to thrive in the current economic climate, you’ll need to innovate.
That said, innovation can be risky, and if you’re thinking it’s a luxury you can’t afford, you’re not alone. But do it the smart way, and innovation can boost growth and set you apart from your competitors. The key is to manage the process well.
Take a risk and the reward is innovation
Most business owners understand that innovation requires some level of risk. There is also a link between risk and reward – you can’t expect rewards without there being some risk along the way.
But while you hear of companies rewarding risk-taking, the reality is that a lot of them only reward risk when it works. And when risks turn into failure, punishment follows.
Why punishing failure is a bad idea
Punishing failure creates a culture of fear in the workplace and stifles innovation. People no longer feel supported in taking risks and start holding back.
Fear culture and fear motivation will shrink your business faster than anything else I know. If you want a culture of innovation in your business, you need to embrace risk-taking behaviour, and all that comes with it – including failure.
So should you actually reward failure?
The idea of rewarding failure may seem counterintuitive. But accepting failure fosters innovation, and encourages employees to contribute their thoughts and ideas.
When failure is just failure
While we’re talking about rewarding failure, it’s important to recognise that there is a difference between an epic fail in the pursuit of something bigger, and plain bad work.
If an employee or team fails in an attempt to innovate, but the intent matches your company’s vision and culture, then recognise the failure and move on.
On the other hand, if they fail due to poor judgement, poor priority management, or lack of effort, you’ll need a different type of recognition! (See my article on How to Turn Around Poor Performers)
Learning from mistakes on the journey to innovation
Have you seen the new $500 Dyson hairdryer? Did you know that there were 599 failed prototypes of this product? That’s right, 599 failed attempts, and now the hairdryer works so well Dyson can command a premium for it!
Imagine two teams working for different companies have both failed in their attempt to innovate and meet company goals. One company rewards and encourages one team and the other is punished.
Which company do you think will be able to retain valuable talent and achieve long-term success? Which company would you prefer to work for?
You and your employees will no doubt fail on your journey to innovation. But don’t miss the opportunity to learn and grow from mistakes. While there is risk in innovating, the rewards can also be great!