In his article on “Crafting Strategy,” McGill University professor and management author, Henry Mintzberg, provides a good example of innovation and organizational learning in high-performing, agile organizations: “Out in the field, a salesman visits a customer. The product isn’t quite right, and together they work out some modifications. The salesman returns to his company and puts the changes through; after two or three more rounds, they finally get it right. A new product emerges, which eventually opens up a new market. The company has changed strategic course.”

But in most organizations, that salesperson would be told to focus on “doing their job” by selling the customer the original product or some high-priced add-on or support service. If he or she did make modifications, they’d be punished for not following the sales process.

In other cases, the salesperson might be told to submit a Product Modification Input Solicitation form to product development, marketing, and three other committees to review. Their regional manager would need a copy attached to the salesperson’s call report explaining where, when, who, why, and how they were spending each day of their time.


Accident is the Greatest of All Inventors

Mark Twain, once said, “Name the greatest of all inventors. Accident.” He was right. Most innovations and breakthroughs come from mistakes, serendipity, false starts, setbacks, and misapplications. Many innovations were unplanned and unexpected.

At their outset, many were unrecognized and unwanted. Innovations, breakthroughs, and major changes often come from unpredictable, chaotic, and random events. That’s why the accuracy of economists and experts’ confident and logical-sounding projections and predictions is so abysmal. They’re projecting today into tomorrow. It’s amazing how the same people who laugh at fortune tellers often take these flawed forecasts and projections seriously.

Yet when innovative opportunities knock, many managers are in their backyard looking for four-leaf clovers. But if someone who can’t count finds a four-leaf clover, how lucky is he or she? The editor and author, Elbert Hubbard, observed, “A failure is someone who has blundered, but is not able to cash in the experience.”


Two Reasons Blundering Doesn’t Lead to Agile Learning and Innovation

Most managers fail to cash in on unexpected opportunities. There seem to be two key reasons. First, they don’t recognize the failure, setback, chance event, unexpected offer, or new wrinkle as a potential innovation they could cash in. That may be because they haven’t progressed to the empathic level of customer and partner listening and understanding. They take the market or customers at face value. They’re only looking at today’s data or current performance gaps. These near-sighted managers can’t see beyond what is, to what could be.

A second reason is there’s no process or practice for cashing in on failure. If it’s not in the plans or budgets, the unhatched potential innovation has no place to incubate, break out, and grow. That brings us to the innovation paradox: Random, chaotic, and unpredictable innovations need a stable management system and process to nurture the growth and development of “lucky breaks.”


Intelligent Failure is the Right Kind of Wrong

Based on decades of award-winning research, Harvard Business School Professor Amy Edmondson, just published a new book, Right Kind of Wrong: The Science of Failing Well. She distinguishes between three types of failure: a basic failure from carelessness or ignorance, a complex failure resulting from multiple, intertwined causes, and intelligent failure as calculated risks leading to experimentation and organizational learning.

Edmondson’s failure categories are helpful to sort through platitudes such as “failing your way to success,” “double your success rate by doubling your failure rate,” or high tech’s “fast failure” mantras. She writes, “Despite all the happy talk about celebrating failure in Silicon Valley and around the world, intelligent failures are the only type genuinely worth celebrating…. smart or good failures occur most characteristically in science, where failure rates in a successful lab might be 70 percent or higher. Intelligent failures are also frequent and essential in company innovation projects…”


Agility and Learning through Controlled Chaos

As a long-time student and practitioner of innovation and organizational learning, I still find James Brian Quinn’s classic Harvard Business Review article one of the more useful on this vital topic. The title of the article says it all: “Managing Innovation: Controlled Chaos.” It’s a great description of the management (process) and leadership (people) balance found in highly innovative teams and organizations. Controlled chaos aptly describes the unstable/stable and unplanned/planned process of successful innovation.

Quinn concluded, “My research reveals that few, if any, major innovations result from highly structured planning systems. Major innovations are best managed as incremental, goal-oriented, interactive learning processes.”

An agile, innovative organization is all about culture development and the leadership team stimulating or stifling it. Quinn writes, “Management practices in innovative companies reflect the realities of the innovation process itself. Innovation tends to be individually motivated, opportunistic, customer responsive, tumultuous, non-linear, and interactive in its development. Managers can plan overall directions and goals, but surprises are likely to abound.”


How Are You Sharpening Your Innovative Wit?

Developing a culture of innovation and process for cashing in on accidents and failures provides a practical organizational approach to what the British novelist, Eden Phillpotts, said, “The universe is full of magical things patiently waiting for our wits to grow sharper.”