33. Failure: Innovation’s Training Ground with Natalie Born

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I'm your host, Natalie Bourne. Hey, we are diving into Chapter 7, I believe. We are talking all about failure, which is innovation's training ground. So, so excited because we are going to be unpacking innovation and failure and how they tie into one another.

And of course, I have back with me, joining me, my behind the scenes partner, Mariah Hiddin, to interview me on this chapter. Welcome, welcome. Hello, everyone. And thank you, Natalie.

I am glad to be back. I think this episode is such an important conversation because so many people see failure as like the end. And so when it really becomes actually one of the biggest growth tools for innovation. So I'm super excited to dive into it today.

You just mentioned failure is innovation's training ground. Why do you believe that failure is such a necessary part for creating breakthrough innovation? And why do so many organizations still struggle to embrace this mindset? Yeah, so, you know, obviously the word innovation, it sounds really awesome.

But when we get under the hood, it actually requires us to go into the unknown. And by definition, that actually creates risk. So I think that, you know, failure and innovation, when we think about those words, I mean, it kind of, it's a scary word, right? We don't want to innovate if we're going to fail, but actually we need to fail through the innovation process in order to learn.

So we think about failure. What does it provide for us? It provides data, insights, learning. And oftentimes when we succeed, we don't always get those necessary learnings in order to be successful.

So when we break down a product or a service or even a business model of something we're trying to build, oftentimes we've learned so many lessons through our failed attempts of what did or didn't work. And so it's not that we just want to fail for the sake of failing, but oftentimes we get a better lesson than when we actually just succeeded the entire time. And so oftentimes organizations struggle because, you know, when they're thinking about failure, oftentimes they then tie it to personal performance, like you failed.

And if you failed, well, then you must be a failure. And that is more than anyone can really handle. So oftentimes people shy away from innovation. But leaders need to think about it a little bit differently.

Failure is only a waste if we don't actually learn from it. So when we don't learn from the failure, it is absolutely a failure and it's a waste. But when we learn from it and we're able to bring that into the rest of the organization and help them see why and how we failed, that actually creates a learning for the entire organization. So when we think about innovation, what we actually want to celebrate is we want to celebrate velocity, not perfection.

So the speed at which we took 10 ideas through this process was X. And as a result, we learned that three ideas failed and were never going to work. Three ideas were really interesting, but we have to rework them. And then four ideas were really successful and we're excited.

We're going to prioritize those and launch those ideas. So if we can get over failure as being a personal issue with this person failed and make it more about the velocity of which we can learn, then teams will actually move away from the sphere of punishment. And they'll actually begin to value the discovery process itself, which is what we need people to be excited about when they're going to innovate. Yeah, that's good.

And I really loved a quote that you used in the book. It says we have learned more from our failures than we ever have will from our success. And so I think it's just important that to get to that success, you're going to have to fail and you're going to have to learn from that failure. And the question, I mean, you just asked it, it's the how and why we failed so that we can learn not who failed and what can we do to get them off our team.

But no, what did they do? How can we fix it and be able to learn from that success and learn from the failure to have success? That's so good. And I laugh as you say that because that's exactly what happens.

We try to place blame on one specific person and then we try to figure out how to get rid of them instead of saying like, hey, let's sit here and all surface our learnings. And it's funny because I do share a story in the book about a team that I went to that failed on a project and I asked them to surface what could they do differently. And no one was willing to raise their hand. When they did raise their hand, they were calling someone else out.

And so I stepped back from that and I said, hey, we're in an environment where there's not enough psychological safety for us actually to even look at ourselves because we're afraid that we're going to get fired or let go if I did fail. And so as a result, like I am just not willing to share my failure with anyone. You talk a lot about psychological safety and how environments of fear can actually stop teams from learning and growing. What are some signs that an organization has created a culture where people are too afraid to fail or speak honestly?

I love to observe meetings. I mean, meetings are very interesting in organizations and meetings actually tell us a lot about the environments and the cultures that we've built. For example, if we have a meeting where we only want to hear good things, we don't want to hear anything bad. We don't hear any problems typically.

And if that spreads throughout the organization, oftentimes what that means is that people will only bring good things to the meeting. They will never discuss real problems. Now, for those who are fatigued by, you know, dealing with problems all day, they may be thinking on the surface. This is great.

Right. I want to go to that good thing meeting where all we talk about is tell me something good. But if we don't have another meeting where we're actually surfacing real problems and solving them, that could be a telltale sign that we're actually stunting the psychological safety or the growth within the environment. Like we're not helping people learn and grow.

So that's, I think, a really important premise there. The other thing I think about is that employees sometimes can just wait to take initiative instead of moving forward. this may also tell us that we have not built a high level of psychological safety in the organization and if i was to go to that employee and ask them why are you waiting this is clearly in your wheelhouse you should go for it and they say oh i don't want to get in trouble because i don't you know if i take initiative in this area and i get in trouble if i get my hand slapped and i asked them when did you last get your hand slapped Well it was three years ago but I don ever want it to happen again So that we can tell there some issues with psychological safety Also you know when we think about this, sometimes we tell leaders what they want to hear and not what they need to hear, right?

And there's that famous quote that says, if you do that, you eventually surround yourself with people who have nothing to say. So we want to be people who take on And sometimes that challenge of listening to things that are not the things we want to hear all the time, but by doing that, if we believe feedback is a gift, that actually helps us to solve problems in real time and it helps us to move forward. So we want to be careful because if we do not create an environment that's psychologically safe, people will actually hide mistakes.

And mistakes, small mistakes over time, right, can become really big mistakes. I love this quote that a leader told me once. He said, bad news travels best fast. And I'm like, man, is that not true?

Like, just get it out there. Let's get it over with. And the faster you tell me, the faster we can figure out how to fix it. And so, you know, oftentimes when someone makes a mistake, they'll try to sit on it, hide it, wait as long as they can.

But man, bad news travels best fast. So the quicker we can get that out there and surface it and talk about it, the better we will become. So I think there's so many different things that we could talk about in this area, but, you know, innovation is fast when we prioritize safety over, you know, when we prioritize safety, when we prioritize our own personal safety, that's when it slows, right? When it's like, oh, I don't, I don't want to be called out or found out, then that's where innovation does not flourish.

Yeah, that's good. And even speaking about the meetings, I think it's important that we could share our failures in those meetings so that now we're not just learning from our failures, but we're learning from others' failures so that we're not making the same mistakes in the innovation and ideas that we want to produce. I also thought it was cool in your example that you shared in the beginning, you asked what every single person could do differently. And so you were kind of not putting the blame on anyone, but the self-awareness of like, what could I have done differently to get a better success?

And then that kind of helps with the psychological safety. It's not just one person, but everyone could have taken a step to lead and get a better success and better goal. You talk a lot in the book. I'm really excited about this part, the difference between failures and mistakes.

I don't think I've really put my mind towards like what the difference is and a lot of people use them interchangeably, But how do you distinguish between failures and mistakes? And why is it important for leaders to make this distinction when guiding their teams through setbacks or challenges? Yeah, you're right. Most of us forget and we use them interchangeably.

And so but I think in innovation, it's really important for us to differentiate it. So when I think about a failure, it's an outcome that doesn't produce the desired result despite a thoughtful effort. Right. So we planned, we thought through it.

We created, you know, kind of a maybe a scorecard around what we thought would happen. We have a thesis. We've thought through that thesis. Maybe we've even done some research on it.

But what ends up happening is that what the results were versus what we thought was different. And that's a failure. Now, let's talk about a mistake in contrast. Oftentimes, mistakes are preventable.

So what that means is that we probably weren't thoughtful. We probably knew the process, but maybe we didn't follow it. maybe there were standards that we ignored or information that we just did not include that we should have. And so oftentimes mistakes occur when we have maybe it's poor judgment or a lack of preparation or a lack of attention to detail, whereas a failure happens through experimentation and exploration, and it just doesn't hit the mark that we thought it was going to hit.

Here's the key. Organizations can learn from both, but we need to respond to them differently. So when something happens, we need to slow our brains down, right? Oftentimes, and you know, we see this in some environments where the leader comes in yelling, who messed this up?

Why did you mess it up? What happened? And everyone's just like, oh, wow, I'm shut down. And I'm not going to admit that it was me, right?

That's the immediate thing is the person wants to hide. They don't want to take ownership. But if a leader can pull someone in and say, hey, let's talk about what happened. Can you break it down for me?

Can you explain to me what was going on? What were you thinking through when this and that happened? Then that person can break it down for them. And the leader needs to sit there and say, okay, they had an intelligent thesis.

They tried some things that didn't work, but they effectively thought through all the scenarios. Okay, let's chalk that up to a failure. What are some things we can learn from it? And what can we do differently next time?

And then they can work through that. When they do that, that's really powerful. And then they can move forward. But let's talk about if a leader treats a failure as a mistake, innovation is going to disappear in your organization.

So if someone tried to innovate, and it was treated as a mistake, not a failure, oftentimes, they will never try anything ever again, if you treated it like a mistake. Now, if a leader ignores mistakes completely, then the performance of the entire organization suffers. So there does need to be a consequence for a mistake. So if someone made a mistake, and they keep making the same mistake over and over again, despite you holding them accountable, sharing what the mistake was, giving them corrective action, and they still continue to make the same mistake.

Now we're having a conversation of, is there a competency issue? So are they either, you know, it all comes down to skill or will. So is the skill there? Yes or no.

Is the will there? Yes or no. And so that's really, in my opinion, the difference. A mistake is something that could have been avoided if I had followed the process that was put in place.

Now, if there's no process in place, that comes back on the leader. So great leaders know when to coach learning because it was a failure, and they know when to coach discipline because it was a mistake. And both are coaching opportunities, but very, very different in the world of innovation. Yeah, that's good.

I really like in your book all the questions that you kind of ask of when failure does happen. Okay, well, what can we learn from it? How can the team gather? How can we rise?

But when a mistake happens, you don't really have a lot of the questions. It's more of like, why weren't you thinking of this? Or like, what happened? What did you miss?

And so I think it is also important just to distinguish those, especially if we are trying to create a culture of innovation and a culture where people feel safe of sharing ideas We need to understand what those guardrails are for if someone does make a mistake or if someone does make a failure and how we can learn from both of them Well and I say this Mariah like you know this about me, I'm big on SOPs, which nobody really, if we're really honest, nobody really likes SOPs unless you're just in that operational world and you just have an operational brain.

But the reason why I'm big on them is because it helps us to know what the standard is. And the first thing we should do if a mistake is made is we should ask ourselves two things. One, have I documented the standard and have I trained them on the standard? And if the answer is no and no, then that mistake actually needs to fall on me as the leader because I didn't document the standard and I didn't train them on the standard.

Now, if we do that and then they make the mistake again, now it's time to really, truly hold them accountable. Oftentimes in leadership, we assume people know things. So we just kind of create this assumptive layer that, well, you should have known that. Well, how?

You didn't tell me. And I didn't know that was an expectation. so you know we need to create environments where we can openly talk about challenges and then we can say well let's document this together and then next time this comes up let's talk about how i'd like you to handle that that's a mistake that we can fix we can coach through now if the person does that five or ten more times then we know it might be a competency issue or they just don't want to do it and so if that's the issue now we can deal with that specifically not i thought to do it you know, through process A, you thought to do it through process B and neither of us talk to each other.

That's very different than we've talked about this 17 times and I'm hitting my head against the wall. So we just need to kind of surface that too as part of being leaders. Yeah, that's good. And self-reflecting on if you have those systems and processes in place.

I know we talked about it a couple of podcasts ago, but I think that is important where you're not really putting blame on something, but it's like, oh, is it my leadership that I wasn't able to tell you that to stay in the guardrails or was it my employee? So I think that's awesome. You mentioned a lot, fail fast, fail cheap, and fail often. It's a big theme in this chapter.

What does that actually look like in practice and how can leaders put healthy guardrails around innovation without completely slowing it down? Yeah, so this is a big one because I think that a lot of times we, and this happens, in my opinion, in smaller organizations, like let's call it medium sized businesses, where typically the leader has like, they're the kind of always been the idea generator of the business. And so anytime they have an idea, we're just off to the races, building on that idea.

And we actually don't create the guardrails to test the idea. So leader says, let's do it, we do it. And then we're really surprised when the idea falls flat with the customer. And so what we actually want to do when we think about failing fast, failing cheap, and failing often is we want to create some guardrails.

So we want to say, hey, it's all about learning and velocity. So we want to learn quickly, we want to adjust quickly, and then we just want to move forward as fast as we can. So no matter who gives us the idea, whether it's the person at the top or someone who's on the front line talking to the customer, we want to make sure we put a scorecard against it. We want to make sure we put some even defining spending limits.

In the book, I talk about slow moving train wrecks. And I talk about a situation where, you know, millions of, you know, millions of dollars were poured into an idea that was not a good idea. And then they had nothing to really show for it on the back end. So we need to put guardrails around our ideas.

We need to put some decisioning frameworks up front to say, okay, when we get to this point, If it's not working, here's what we're going to do. If we get to this point, we're going to reassess what we need to actually have happen with this idea. Because when we don't do that, we just spend way too much. And we have this idea of some people call it minimum viable products.

Some people call them minimal lovable products. But it's the idea that there is no perfect and we need to create a minimum idea of what can go to market. We spend so much time trying to make things perfect that we never actually get off the blocks and get out there and test it. And so, so much of innovation is about testing, it's about trying things, and it's about moving forward.

Throughout this chapter, you share multiple examples of products and ideas that have failed because organizations built what they wanted customers to have instead of what customers actually needed. How can leaders stay closely connected to customers throughout the innovation process so they avoid creating products that nobody wants? Yeah. So I have some funny examples in this chapter about, you know, products that were created that, you know, at the time, nobody wanted, but man, they were out there and they were, they were kind of available for sale.

But man, when we look back on them, we kind of have a good laugh because they were not successful when they launched. Some of us may argue they were ahead of our time. Others of it, it's like, no, I just think it wasn't a good idea. And I even talk about a product launch that we did within the company I was in at the time that we also thought was a fantastic idea and did not turn out so great.

And all of these things serve as really important lessons for us to spend time where our customers actually use our product or service to understand them better, to get a lens into their frustrations and ask them what problems they're trying to solve and how my solution may or may not actually help them solve that. But to really get them involved early, I think this is something that we just kind of fail to understand that we've got to validate what they're trying to do, how they're trying to do it.

And then we need to make investments in the areas where we see that they're actually like excited, right? So I talk a lot about taking ideas to customers and sometimes they would look super bored. They were not excited about the idea. And I was like, okay, that is my signal to go back to the drawing board.

But sometimes I would talk about an idea and they would lean in and say, tell me more. Or even if you build that, I'll buy it, which is huge. And that's how we know that those are the areas that we need to lean into. So, so much of innovation is about not only looking at the signals in the market, but looking at the signals in the customer.

and ensuring that we stay curious so that we avoid this like bias we have. Because sometimes you take an idea and you're like, I think this idea is really dumb, but let's just see what happens, right? And we have this bias that it's not going to be great, but for some reason it solves a niche a challenge that the customer has and they actually are really excited about it So a lot of that is removing our bias and ensuring that we create the right guardrails for us to ask good questions to our customers.

Yeah, that's good. And it's creating those 10 versions and not just the one through three versions. And I know we've talked about it a lot, but being able to fail sooner into the process, we'll be able to learn and even make the goal or our idea better than what it could have been because we have that feedback and we were able to fail beforehand. So I think that's awesome.

I loved all the examples that you did and how some people might be like, this is a great idea. And then we get it out and we're like, wait, we didn't talk to our clients. No one really wants this. What are we going to do with this?

No, I think it's important not just to think about the organization and what your team thinks about it, but to go to those clients and be like, hey, would you use this if we did this? Or how could we change it so that you could use it so that we aren't spending thousands and probably millions of dollars making these different ideas and products to be able to waste all that money and time that we could have been able to make it better. So towards the end of the chapter, and I just love failure because I think it could be a team thing.

It doesn't just have to be an individual thing. And the whole topic of innovation as a team and being able to talk to your employees and learn from their mistakes, but then also grow and have ideas together, I think is super important. And so towards the end of the chapter, you do talk about how resilient teams rise together after setbacks. For leaders listening today, how can they build teams that are willing to take risks, learn from failure and continue innovating even when things don't go as planned?

Yeah, I think everybody wants to know that the leader they're following has failed. And that sounds kind of funny to say that out loud. But they do because, you know, we have to model the vulnerability that we want to see in our team. So being able to share your own failure, your own lessons learned, being able to talk about that, I think is really, really important.

And also when we celebrate learning, not just the outcomes, I think so often we want to celebrate the person that did find that aha product and launched it. And that's really good. And we should celebrate them and pay them for that. But we also need to celebrate the model of what it looks like to learn and the velocity of what it looks like to learn.

So we want to reward thoughtful risk taking. We want to, you know, conduct lessons learned or some people call it after action reviews just to like, again, rather than placing blame to actually learn and to reinforce the behaviors that we want to have as a team. And so it's so important, I think, for us to make sure that we're focused on the mission, not just the setback. So often we will have setbacks along whatever journey we're on, but we need to recognize patterns that create momentum, patterns that break, that we need to fix.

And all along the way, we need to celebrate that learning because when we do that, it actually builds trust with the teams that we're trying to support. And we want to encourage their experimentation, not stifle it. And so I think we just need to reward not just the aha moments, right? Not just the big products that launch, but we also need to reward people for learning and innovating.

And then they need to translate that innovation and that learning to the rest of the organization. I love this topic around failure and how it is encouraging that we are able to fail and organizations can fail with ideas of innovation. Do you have any final thoughts for our listeners around this chapter today? Yeah, I think, you know, as we think about this topic of failure, you know, it's, if I could say it like this, failure is not the opposite of innovation.

It's a part of the process that makes innovation possible. So when we're thinking about, you know, innovation, we don't want to extract failure, right? It's not the absence of failure. It's the willingness for us to learn through it so we can get to the right solution.

And so often I think, you know, organizations want to avoid making, you know, these failures in their thesis. But we have to actually train ourselves to recover faster through those failures and actually get to a place where we can be competitive faster. And so every setback contains a packet of valuable information in it. And I think that's the way we need to think about it.

So how do we unlock what's in there? We have to talk to each other. We have to get in a room together and say, okay, that didn't go as planned. Let's talk about why.

What part of it can I own? What part of it do you own? And then what can we learn from that? And it's hard and it's uncomfortable.

And sometimes it, you know, there are mistakes even within, if we uncover that failure, sometimes even in there, there are mistakes and that's okay. But what are we learning from it? And are we growing through that to get to the other side? And that's the whole goal of this chapter is to teach us to look failure in the face and learn from it.

That's awesome. I love that. And I just love how encouraging it is because even in the beginning when we were like, we feel once we fail, we have lost our jobs, we are in trouble, it's an end. But knowing that it's not the end, it's the journey.

And being able to learn through that journey is really important. That's awesome, Natalie. Thank you for today. Where can people find and follow you?

Yes. So if you are interested in learning more about this innovation system, there's a book, a masterclass and a study guide. You can head over to set it on fire.co to learn more.

And then, of course, you can follow me at innovation meets leadership on all of my platforms. Well, thank you again, Mariah, for spending some time with me today. I appreciate it. This has been so fun just to talk about.

Sounds funny to say it's fun to talk about the chapter on failure. But I think when we understand failure better, it is fun. Right. So to our listeners, thank you for joining the Innovation Meets Leadership podcast.

Remember, don't just get out of the box, break the box and set it on fire. Let's go transform something. Thank you for joining us for the Innovation Meets Leadership podcast. Be sure to subscribe to our show on iTunes.

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Hey, my new book is out, Set It on Fire, The Art of Innovation. Click on the link to learn more. And don't just get out of the box, break the box and set it on fire. Let's go transform something.