8th August 2013, BUSINESS STANDARD
What are the barriers for an organisation that wants to promote a culture of experimentation?
Last month’s InnoColumn (Spurring associative thinking, July 12) referred to the challenge of nudging organisations to encourage experimentation, and consequently be accepting of failure. Everyone agrees that breakthrough attempts are essential for innovation, and hence the risk of failure must be accepted by organisations. Such acceptance is matched by a cynicism that such statements are organisational “isms”.
The reality that everyone sees is that organisational rewards go to those who deliver fault-free work. There is even academic research to evidence this fact. For example, the creative folks in advertising are often briefed in the tone “no risks, please”. In an international company, the local team will not risk advertising that will be disapproved by HQ people, who do get involved with judging the advertising. Only occasionally is the barrier transgressed: like with J&J’s Nude Models Wanted advertisement by Trikaya in the 1970s; like with the whacky Wheel advertising by Hindustan Lever in the mid 1980s, and like the current Cadbury bitter chocolate campaign.
Large organisations think that encouraging failures would have reputation implications and thus want to play safe. However, a culture of taking little bets can prevent the development of a weak culture or making of fatal errors at a later stage of the work. It is very unclear how to accomplish this magical state.
Here is a way to think about the issue and to classify error types.
Three types of errors occur in organisations: first, the error arising due to sabotage or intentional concealment. Leadership has to demonstrate zero tolerance for this type. Second, errors occur due to carelessness or bending of rules. Organisations develop some tolerance for these, but do not explicitly approve of their occurrence.
Creative errors
The third type is a creative error, which occurs due to changing market circumstances, calculated risks, experimentation or even bad luck. These are “good errors” and can be encouraged if someone defines what a creative error is. Only then can creativity be encouraged (Creative errors and heroic failures, B Kriegesmann, T Kley, MG Schwering, Journal of Business Strategy, 3/25).
Gerhard Bihl was the human resources director of the BMW Regensburg factory around 1990. His challenge was to convert the ideas in Regensburg from employees’ craniums into practice. He began an activity called “Flop of the Month” or, more elegantly, creative error of the month. In contrast to the conventional employee of the month scheme, which eulogises the error-free, highly efficient, and ideal employee, this activity focuses on the tragic hero of everyday business, whose experiences harbour unexpected learning potential. Bihl piloted the scheme in the Regensburg factory for three and a half years during which time 12 awards were given away.
In due course, the scheme petered out and the issue of encouraging creative errors remained a challenge.
In the US, Ireland and Sweden, the sharing of mistakes and lessons from misadventures is celebrated through what is called a Golden Egg awards. As one member of an Ann Arbor association of corporate Presidents put it, “I want to hear it from the member who got egg on his face trying out his idea”. Presentation of the award for the best mistake of the month became a standard part of their meeting, and the trophy itself added an important new dimension. It gave the company president the chance to be a model for treating mistakes since opportunities to learn how to do it better rather than as a situation requiring blame. It legitimised the importance of learning from our failures and successes.
Tata has experimented with these concepts through a Dare to Try initiative. A satisfying outcome has been the openness of managers to come forward with the stories that were not successful. When this category was initiated in 2007, companies had to be cajoled to participate and there were only 12 cases from six companies! In 2013, there were 248 cases from 31 Tata companies. The transparency with discussing such cases has helped in building a learning culture in Tata.
Three types of lessons have been learnt from creative errors:
- Technology advancement: The attempts have helped teams uncover the blind spots on the roadblock for technology progression and have helped them to take that big step through the risky project.
- Business models: Not all innovative products could be commercialised with the business models prevalent in the company. Often products with cutting edge technology need to be supported with novel business models.
- Business models: Not all innovative products could be commercialised with the business models prevalent in the company. Often products with cutting edge technology need to be supported with novel business models.
- If acceptance of creative errors is encouraged, teams and individuals will surely develop a learning culture, that will be a stepping stone for successful innovations. Maybe the National Innovation Council could consider instituting an annual Bharat Sunehra Anda award for the best creative errors!
- Such a discriminating approach to various types of organisational errors can help to encourage the right errors and foster that elusive spirit of risk-taking that all organisations strive for. This requires understanding the “social context” in organisations and how to manage them. This will be the subject in next month’s column.
