Why fail when you can learn?

learn_written_on_notebookDigital markets move quickly, they are more dynamic than traditional markets and they can be disrupted more easily. New technology-enabled business models can be developed and launched far more quickly than has previously been possible. And they can be scaled-up to meet a surge in demand in a matter of days or even hours. The brand, scale and resources of an established company do not necessarily provide the protection they once used to when a disruptive new competitor or business model appears on the scene.

To keep pace with digital markets and the start-ups that are threatening to disrupt their core markets traditional organisations have to be prepared to take risks, to try new things, test ideas and commission pilots. This does not necessarily mean taking big risks; the most successful digital businesses regularly launch small initiatives to test new ideas, products and services. Instead of evaluating a new idea through board papers and business cases, these organisations perform their evaluation in the real world, with real customers but in a controlled way.

With this approach, however, comes the likelihood of failure; not every new idea or pilot will be a success. Start-ups are comfortable with the prospect of failure – it comes with the territory. When a start-up’s new idea, feature or service does not work it is quickly amended or removed altogether and the business moves on to the next idea. Failing fast has become a mantra in the digital age. Traditional businesses – and particularly CIOs – are regularly encouraged to follow the start-up community in their willingness to experiment and to fail. As long as the failure is small in nature, recognised quickly and appropriate action is taken to stop or adjust the experiment then, CIOs are told, everything will be OK.

But is that realistic advice? For most traditional organisations failure of any kind is still an unacceptable outcome; it damages the credibility of anyone associated with the idea and it can be a career-limiting event. In some boardrooms just raising the potential of failure in a new venture or pilot is not acceptable. The boards of most traditional businesses are still highly risk adverse and will only consider investments that can demonstrate a satisfactory (i.e. positive) rate of return. Failure is not an option; proposing something that has the potential to fail or just using the F-word within such organisations is forbidden.

One of my clients, a CIO in a large global organisation, faces this problem. The organisation wants to embrace digital and the CIO has been given the task of driving digital innovation. But the organisation is risk adverse and baulks at the use of the F-word. So this CIO has adopted an alternative to the fail-fast approach: learn fast. Projects and ideas do not fail; they generate information and insights that allow the organisation to learn. Learning adds to the business, it is positive and valuable. What organisation does not want to learn? Failure may not be an option for some organisations, but learning is always an acceptable outcome.

One could argue this is just semantics. And at one level it is. But as CIOs already know from their experience in adjusting their language from technical terms to business outcomes, changing the way you talk about something and the language you use can lead to a very different outcome. For the CIO in question, they can talk about a learning opportunity in the boardroom without fear of being judged or viewed negatively. If adjusting language is all it takes to get the business to consider a new idea or to test a new feature without a long, drawn-out business case and approval process then it serves the purpose.

But there is a lot more to the learn fast concept than just semantics; as well as shifting the discussion from the negative of failure to the positive of learning, it can also change the entire focus and approach to designing and building new things. When learning fast becomes a key requirement of a new solution, pilot, test or proof of concept, it challenges the team to think about how to make learning points an inherent part of the design process. For example, what metrics or indicators will help the business learn how the new solution is performing, what data is required to produce these metrics, how can the data be collected and how can it be made available to the right people quickly and in a format that helps them understand what is happening?

The insights generated through this approach can be used to adjust and refine the solution in real time, and they can also be used to develop new ideas, trials and hence learning points for the organisation. Applied in this way learning fast can actually reduce the likelihood of failure.

And where the organisation decides that an idea or solution should not be pursued, the focus is on the lessons learnt from the project, on the data and insights it generated and how these can be used to develop or refine other ideas or features. This is after all how start-ups use failures – as learning points that help the business converge on the idea, feature or solution that will be successful. Start-ups are born with a learning culture – without it they will not survive for very long.

And this is the real point with adopting a learn fast approach; developing a culture, processes and systems that are consistent with learning fast is a key step in preparing a business for the challenges of digital. Organisations that can learn fast and act accordingly stand a much better chance of surviving in the dynamic, fast-moving digital markets than those that are paralysed by the prospect of failure.

CIOs that adopt and promote the learn fast approach will find it easier to try new things, test ideas and take risks with the fear of being associated with the F-word. They will also be helping their organisations develop the learning capabilities required to compete in the digital age.


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