Last Tuesday I attended a discussion at NESTA with Tim Harford, FT columnist and author of the Undercover Economist, to mark the launch of his new book ‘Adapt’. The book explores an issue that will soon be at the heart of all organisations: how to adapt in a fast changing and complex world to tackle the many environmental, social and economic problems heading our way. Using the mantra of Joe Wright’s new blockbuster ‘Hanna’, companies must ‘adapt or die’.

Harford proposes that for companies to adapt, they must first learn to embrace and bounce back from failure – to pick themselves up, dust themselves off, and carry on. Multi award winning, global design agency, Ideo, work to the strategy of “Fail often in order to succeed sooner”. Peter Sims, author of ‘Little Bets’ adds ‘fail cheap’ to this ‘fail fast’ and ‘fail often’ tactic, recommending that organisations take small and cheap ventures, often, in order to succeed. However, Harford argues that in most organisations today this resilience and ability is still missing. Failure has become a stigma which companies are unwilling or afraid to identify and admit – leading to catastrophic failures. This has seen in the recent economic crisis with the collapse of large financial institutions that believed themselves ‘too big to fail’.

Harford suggests that if companies are refusing to fail, then they are also neglecting to innovate, as innovation can not occur without failure. Innovation comes from experimentation, mistakes, and from the process of continual trial and error until a solution or new idea is found. Google is a company that is well aware of this necessity for experimentation, Harford cites that they happily admit to an 80% failure rate for new ideas. Harford concludes that for ‘successful failure’, an organization should be willing to try a variety of things, make sure the failures it does have are survivable, and learn to quickly recognise the difference between success and failure.

If this word ‘failure’ holds such stigma and shame, then maybe an alternative word should be championed. In a post event conversation about the merits (learning, knowledge and innovation) and dangers (accepting unproductive and preventable failures) of the current demands for companies to ‘embrace failure’; the suggestion was made that this new and improved word be ‘experimentation’. Amy C Edmondson in the April, 2011 Harvard Business Review talks of the value of failure from experimentation. She proposes that failures occur on a spectrum from blameworthy (due to intentional breaches, or lack of ability or diligence), which should be eliminated; to praiseworthy (resulting from experimentation and bringing new and valuable findings), which should be embraced. She calls these failures from experimentation ‘intelligent failures’, and argues that they are necessary for innovation and for teaching companies valuable lessons.

It seems then, that group was onto something. Perhaps ‘experimentation’ is the term that we should be promoting, and not ‘failure’.

Watch the event video: http://www.nesta.org.uk/assets/events/a_conversation_with_tim_harford