1st October 2009, ECONOMIC TIMES
The first SLV-3 experimental launch took place in August 1979. After a dream take-off, unfortunately the satellite tumbled into the Bay of Bengal. The chairman of ISRO, Prof Satish Dhawan, told his tired and dejected team members to stay away from the press conference, which he addressed personally to explain what went wrong. In July 1980, the second SLV-3 mission took place and this time, it took off like a dream and stayed that way. Prof Dhawan requested team leader Dr. Abdul Kalam and his colleagues to address the press conference.
In the book Ideas that have worked (Penguin, 2004), while recording a lesson he had learned about how to manage failure in dream projects, Dr APJ Abdul Kalam wrote, “When success comes in, the leader should give the credit to the team members. When failure comes, the leader should absorb the criticism and protect the team members”.
Managers are assaulted with a cornucopia of literature on innovation management. They all emphasize how essential it is for organizations to create a risk-taking environment in which managers feel encouraged to take risks. But it always remains unclear how to do so.
Even among managers, there is a broad intellectual acceptance that breakthrough attempts are indeed essential, and the risk of failure must be accepted by organization. Unfortunately there is an equally widespread cynicism that such intents and statements are ‘organizational isms’ which do not work. In reality, rewards inevitably go to those who adopt well-proven, trusted methods and deliver fault-free work.
(1)
So how can an organization do something which is credible and practical about promoting risk-taking among its employees? Are there different kinds of risks? How can creative errors be encouraged selectively?
Creative Errors
There are several types of errors that occur in an organization and they stretch across a spectrum. No organization can afford to ignore all errors with the aim of encouraging creative errors. (2)
At one end of the spectrum, there are errors arising due to sabotage or intentional concealment of errors made or noticed by employees. Leadership reaction to these has to be of zero tolerance and strong disapproval. Otherwise it will confound employees.
In the middle of the spectrum, there are errors due to carelessness, unwillingness to learn, inadequate capabilities and such reasons. All organizations develop some tolerance for these, though they do not actively sanction or approve of their occurrence.
At the other end of the spectrum, there occur creative errors which occur due to changing market circumstances, calculated risks and rewards, and bad luck. These are the ones to spot and encourage in an organization.
This discriminating approach to various types of organizational errors can help to encourage the right errors and foster that elusive spirit of risk-taking that all organizations strive for.
TATA experience
In 2007, Tata Group Innovation Forum (TGIF) experimented by adding a very unusual category of recognitions called “Dare to Try” in its group-wide Tata Innovista program. Under this category, company managers and teams are encouraged to send in entries for innovations that were attempted, but which failed to get to the marketplace for one reason or another. Entries are reviewed by peer managers in ten regional rounds that are organized all over the world and the ‘finalists’ are reviewed by an external jury in Mumbai. Dr K Kasturirangan, Dr RA Mashelkar, Prof Anil Gupta and Mr AN Maira have served as jury in the past. On JRD Tata’s birth anniversary on 29th July, the winners are honored by Chairman Ratan Tata at a widely broadcasted corporate function.
In one year, the winner was the TMETC (Tata Motors Engineering Technical Centre, UK), which failed to develop-to-market an innovative IVT (infinitely variable transmission) for the Nano car. Within the tight timelines, TMETC could not deliver a target cost and performance-effective product. “The team does not consider their IVT endeavor a failure….TMETC and Tata Motors fought a good fight—and won more than it lost,” reported the internal publication. (3)
Another company, Tata Technologies, had globally acquired a company called INCAT Inc. In this company, a team set out to develop unique software for instructor led distance learning. The team achieved pretty good innovations—students could learn on their own computers with flexi-times and at their convenience. Lessons could be repeated and one-to-one instructor assistance was made available live. However, it did not take off as a number of user issues had not been addressed well enough.
On another occasion, the ‘winner’ was JUSCO (Jamshedpur Utilities and Services Company). Their project was to roll out a model to provide priced, quality water supply services to a community which had always regarded free water as its birthright. In Jamshedpur’s company lease area, which is serviced by JUSCO, citizens get good quality, potable water supply. Residents in the surrounding areas do not. The obstacles were about whose right and mandate it was to distribute water, securing additional water supplies, about who would pay for it and so on.
Through a number of steps, JUSCO established a huge number of positives to prove that it is possible to profitably supply good quality water through a corporate public partnership. However, unresolved issues with respect to customers and regulations prevented rapid adoption. Who knows, the CPP may well be a model for future urban problems of a similar nature.
Voyagers-Tata Innovation Day 2008, a group publication, reported that “the Tata Innovation Day celebrates the spirit of creativity across the Tata organization….the increasing participation is a heartening confirmation of the enthusiasm and vigor sweeping the group.” Over the three years of celebrating all kinds of innovation, including Dare to Try, the number of participating companies has dramatically increased, the number of entries has shot up from under 100 to about 1800, and the venues have spread from five regional centers in India to include the UK and USA.
The most satisfying outcome has been the openness of Tata managers to come forward with the stories that were not successful. In 2007, when this category was initiated, companies had to be cajoled to participate–12 cases from 6 companies! In 2009 there were 113 cases from 28 Tata companies. The transparency with discussing such cases has itself helped them a lot as noted by the publication, Voyagers: “More importantly, the company has found the means to reward risk-takers and, to a large extent, extinguish the fear of failure. Each group head now nominates a person or a project that he or she feels took the maximum risk-and failed. This person or project is scored on par with the project that has achieved high success, and given just as big an incentive”
Lessons from failure
These creative errors help teams/individuals learn and are stepping stones for successful innovations. Some of the things that teams reported having learnt from the Tata Innovista:
- 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 commercialized with the same old Business Models existing in the company. Sometimes products with cutting edge technology need to be supported with novel Business models.
- End consumers: In case of breakthrough industrial products, perception of end-consumers are also extremely critical.
The valuable part of failure always lies in the lessons—and each case is analyzed by the team members themselves. Often the lessons lie in a breach of one or more of the four principles that have been mentioned in the group’s documented experiences of innovation: aligned aspirations, permeable boundaries, minimum critical rules, and flexible architecture. (4)
TATA is certainly not original or the first to try such a scheme.
BMW had experimented with a similar idea about 20 years ago. Gerhard Bihl was the human resources director of the BMW Regensburg factory in 1980s. His challenge was to “convert the ideas in Regensburg from paper into practice.” Around 1993, he began an activity which he called “Flop of the Month” or, more elegantly, “Creative Error of the Month.” In contrast to the conventional ‘employee of the month’ scheme, which eulogizes the error-free, highly efficient, and ideal employee, this activity focuses on the ‘tragic hero’ of everyday business, whose experiences harbor unexpected learning potential.
Gerhard Bihl piloted the scheme in the Regensburg factory for three and a half years during which time 12 awards were give away. After he left BMW, it seems that the scheme petered away. However the issue of encouraging creative errors remains a corporate challenge everywhere.
A solution may lie in defining what a ‘creative error’ is and then encouraging it strongly.
References:
- Building organizational culture that stimulates creativity and innovation, Martins and Terblanche, European Journal of Innovation Management,2003.
- Creative errors and heroic failures, B Kriegesmann, T Kley, MG Schwering, Journal of Business Strategy, 3/25).
- Voyagers-Tata Innovation Day, 2007.
- Innovation and Innovativeness: the Tata experience, Tata Management Training Centre, 2009.
