Behind every success is failure.

If the success is big, expect to find either a big failure behind it, or multiple small failures.

Progress comes from overcoming inertia. Inertia and habits drive people to do things the same way over and over.
Not trying new things in good times leads to short term avoidance of failure, but leads to catastrophic long term failure.

When times are bad people are at their most creative and inventive. The natural response to pain is to act to remove it. Tough times force people to re-evaluate their habits and look for better ways to solve their problems. These solutions become new habits which drive future success till they become obsolete in turn.

If failure is big, it could result in significant value destruction for an organisation.
On the other hand, if an organisation is not failing enough, it is not learning enough and is ripe for being disrupted.

How then, can an organisation address this paradox between failure and success ?

The trick is to build a culture of ‘failing small, often’ to reduce the chances of ‘failing big’.

The impact of reacting to multiple ‘small failures’ on an organisational scale can drive the organisation in serendipitous directions and enable success that may not have been ‘planned for’.

This ‘fail small, fail often’ culture need to be driven top down and designed into an organisation’s DNA.

5 areas to think about to drive this cultural shift :

1. Change from a directive organisation towards a directional organisation

Decide the company purpose, goals and accepted behaviours high up in the organisation and push decision rights down.

If the organisation’s goals and philosophies are clearly expressed, every employee can judge whether their decisions will take the company where it wants to go, in the right way. This enables them to make small decisions. This culture, when spread across an organisation, can result in an adaptive organisation and faster decision making. Many small risks are taken and many small learnings can be shared or scaled up. In the opposite model where decision rights are concentrated, the risks get aggregated at each level and by the time a decision is taken the cost of failure becomes higher.

2. Cut the bureaucracy 

There are no alignment meetings with just 1 person in a role. With 5 people there are 20 points of alignment, with 25 people there are 600. Alignment and meetings increase faster than headcount.
When an organisation becomes large and allocates decision rights to senior levels, few people can say ‘yes’, and many can say ‘no’.
New and disruptive ideas get killed before they a decision making level.
To manage bureaucracy and encourage small experiments, organisations should either cut layers or delegate decision making rights downwards.

3. Encourage small innovation 

Encourage everyone to innovate. Celebrate small success. (http://en.wikipedia.org/wiki/Kaizen)
Focus the team on consumers and on looking outwards to seemingly unrelated areas for new ideas. Cut the tendency to focus on navel gazing and competition watching.

4. Start pretoyping (http://www.pretotyping.org ) 

Pretotyping is a concept developed by Alberto Savoia (http://www.albertosavoia.com) It enables teams to ‘fake it before they make it’. This limits the cost of failure and dramatically increases the number of ‘experiments’ that an organisation can conduct in a given amount of time/money. Organisations can choose to scale up only initiatives that are proven to work. The pretotyping mentality can be applied across the organisation.

5. Design the organisation for collaboration, plan for serendipity.

http://www.thefutureorganization.com/design-collaboration-plan-serendipity/ Engineer ‘informal’ and ‘unrelated’ interaction.

Failure is as big a driver of personal success as business success.

For an interesting perspective on failure as a driver of personal success see Scott Adam’s interview herehttp://online.wsj.com/news/articles/SB10001424052702304626104579121813075903866