Building a fast-failure-friendly firm

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Building a culture where intrapreneurs are not afraid to fail is critical if you hope to be innovative. Here are some ideas to help create that environment

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Building a fast-failure-friendly firm

  1. THE FAST-FAILURE FRIENDLY FIRM FAIL YOUR WAY TO SUCCESS http://www.flickr.com/photos/geyring/
  2. PROLOGUE WHY IT MATTERS
  3. Pacemakers Post-its Penicillin The Light Bulb The Microwave Corn Flakes Discovery of the Americas Kitty Hawk
  4. These were all failures that led to mondo ducats
  5. But, we shouldn't just say "Whoo hooo! Let's fail more!"
  6. Ideally, we should fail more, but fail smarter
  7. that means we want to fail when….
  8. 1. the costs of failure are low and the returns are high
  9. 2. we can quickly determine if we're failing, so that we can pivot quickly
  10. 3. we can learn effectively from the failure
  11. this presentation is about how managers can build organizations that can do that
  12. PART ONE WHAT IS FAILURE?
  13. let's first differentiate between failures and f@*k ups
  14. failures are legitimate mistakes
  15. It's a legitimate mistake when you…
  16. fumble because you lacked all the data, but had to move forward anyway
  17. made a reasonable bet, but got unlucky with circumstances
  18. invested in a low cost - high potential reward experiment
  19. f@*k ups are stupid mistakes
  20. It's a f@*k up when you…
  21. failed to execute due diligence before or during
  22. failed to learn from a legitimate mistake and repeated it
  23. invested in a high cost – low potential reward experiment
  24. PART TWO WHY FAIL?
  25. let's talk about 8 reasons why legitimate mistakes can be valuable
  26. REASON 1 Fail regularly to ensure that you keep striving Failure occurs when you stretch / grow yourself, because you are out of your comfort level. If you’re not failing, you’re likely not stretching. Explicitly track (and record) your rate of personal failures. Ensure 1 meaty screw up per quarter, or force yourself to move into personally uncharted waters.
  27. REASON 2 Fail regularly so that you continue to be surprised Surprise is a key to innovation because it reveals opportunities. It also stores valuable Return on Investment if you learn from it. Seek out Failure and aggressively run retrospectives (post mortems). Celebrate what you learn positively, widely, and publicly.
  28. REASON 3 Fail regularly to keep an open mind We are biologically predisposed to calcify assumptions & shy from cognitive dissonance. Shake things up before they can’t be dislodged. Compose a list of 10 things that you believed 15 years ago, which you now know are false, or at least, not quite right. Remember how sure you were.
  29. REASON 4 Fail regularly so that you remind the ego to stay humble The greatest danger of confidence is over confidence Find and listen to the album “Nothing’s Shocking” by Jane’s Addiction. It has nothing to do with this topic. It’s just a fraking good album.
  30. REASON 5 Fail regularly so that you build empathy for others who fail Most people fear failure because of how they think others will see them. It is peer pressure which makes us avoid what is innately good for us. Look around for someone who is currently failing and give them a shoulder to lean on. No questions asked. No judgements made.
  31. REASON 6 Fail regularly so that you build confidence in your resilience One of the reasons that it was so hard to shave my head bald for the Children’s Cancer Foundation Hair for Hope program was the worry that it wouldn’t come back. It did. Compose a list of 3 big mistakes you’ve made in your life thus far. Appreciate that you got through them and that they are not nearly so dire years later.
  32. REASON 7 Fail regularly to build practical recovery skills so that you get up faster & stronger next time ‘nuff said Go back to the retrospective you ran for Reason #2 and analyse the process after the failure rather than before. Identify 1 thing to improve with recovery next round.
  33. REASON 8 Fail regularly so that failure becomes less scary & embarrassing Once you train your brain to see failure as an opportunity, it will become one Find someone who has failed (and who may feel privately ashamed) and let them know personally that it’s no big deal.
  34. PART THREE HOW DO YOU BUILD A FAST-FAILURE FRIENDLY FIRM
  35. if you are a manager or a leader
  36. and you are now convinced that a bit more failure would be a good thing for your group
  37. what do you do?
  38. here are 5 simple, practical things that you can do at any level of an organization
  39. PRACTICE 1 Iterate Faster & Smaller
  40. PRACTICE 1 Iterate Faster & Smaller put in place a process to identify low-hanging opportunities where failure is low cost & high return
  41. PRACTICE 1 Iterate Faster & Smaller do a bit of shot gunning with the results of the low-hanging fruit review. Commission many small bets and let the dice roll
  42. PRACTICE 1 Iterate Faster & Smaller rewire your infrastructure/administration to support quick-iteration (e.g.: annual budgets….really?!?!)
  43. PRACTICE 1 Iterate Faster & Smaller add "no-go" tollgates to avoid the basic human hard-wired tendency to throw good money after bad
  44. PRACTICE 1 Iterate Faster & Smaller require business cases to identify minimum viable product features and customer validation metrics from the start
  45. PRACTICE 1 Iterate Faster & Smaller define exit plans so that features (and applications) are designed for easy decommission if they don't work
  46. PRACTICE 2 Celebrate Failure
  47. PRACTICE 2 Celebrate Failure make sure that senior leaders celebrate great post-mortem learnings at townhalls or team meetings
  48. PRACTICE 2 Celebrate Failure heck, have those leaders give out an award to the bravest or most resilient failing team of the quarter
  49. PRACTICE 2 Celebrate Failure or at least, have them talk openly and broadly about the importance of smart failure
  50. PRACTICE 2 Celebrate Failure at every level, use neuro linguistics such as, 'and versus but'
  51. PRACTICE 2 Celebrate Failure look outside the firm and do positive post-mortems on the mistakes of competitors or other industry players
  52. PRACTICE 3 Share & Learn from Failure
  53. PRACTICE 3 Share & Learn from Failure use a tool that helps you effectively share knowledge broadly – check out Jive, or other Enterprise Social Networks
  54. PRACTICE 3 Share & Learn from Failure make sure all project leads learn how to effectively facilitate retrospectives / post-mortems and make sure they do
  55. PRACTICE 3 Share & Learn from Failure publish retrospectives broadly
  56. PRACTICE 3 Share & Learn from Failure every year, circle back and review your library of post-mortems for emergent themes
  57. PRACTICE 4 Habitually Challenge the Status Quo
  58. PRACTICE 4 Habitually Challenge the Status Quo have a annual mechanism to challenge all wisdom that has stood for a long time, especially during times of market disruption
  59. PRACTICE 5 Hire & Train Sherlocks & wackos
  60. PRACTICE 5 Hire & Train Sherlocks & wackos make sure to hire some folks who are good at forensics
  61. PRACTICE 5 Hire & Train Sherlocks & wackos and a few oddball outliers to introduce randomness and surprise
  62. SMART FAILURE IS PROFITABLE Characteristics of Smart Failures: • Costs of failure are low and returns are high • We can quickly determine we are failing so we can pivot • We learn LEGITIMATE FAILURES • You lacked all the data but had to go • You got unlucky with circumstance • Low cost of failure & high returns F@*K UPS • Lacked due diligence before or during • Failed to learn • High cost of failure & low returns WHY FAIL? • Ensure that you keep striving • Continue to be surprised • Keep an open mind • Stay humble • Build empathy for others who fail • Build confidence in your resilience • Build practical recovery skills • Make failure less scary & embarrassing MANAGERIAL BEST PRACTICES • Iterate Faster & Smaller • Celebrate Failure • Share & Learn from Failure • Habitually Challenge the Status Quo • Hire & Train Sherlocks and Wackos
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