ROT013

Promoting Experimentation for

Organizational Learning:

The Mixed Effects of

Inconsistency
Creating a consistent work environment containing ‘psychological safety’
can reduce employees’ fear of failure and promote experimentation.
by Amy Edmondson

Innovation is a rallying cry for most of today’s organizations. Yet encouraging innovation
and superb execution of routine work at the same time runs the risk of sending a mixed
message that can end up accomplishing neither.
For example, in 2000, Bank of America sought to become an industry leader in
innovation and established a program to promote experimentation in two-dozen real-life
‘laboratories’ – fully-operating retail bank branches in which employees were to experi-
ment with new product and service concepts, such as virtual tellers. Successful experiments
Amy Edmondson – determined on the basis of consumer satisfaction or revenue growth – would then be
recommended for a national rollout.
Bank senior management voiced strong support for innovation, and explicitly recog-
nized and communicated that experimentation with new ideas necessarily produced failures
along the way. Indeed, a failure rate of 30 per cent was targeted as indicative of ‘sufficient’
risk-taking and novelty. Initially, however, employee compensation continued to be based
on measures of routine performance (such as opening new customer accounts.)
 The espoused goal of increasing innova-
tion thus was inconsistent with the reward
system; individuals’ compensation could
suffer from time spent experimenting with
new ideas or from failed experiments.
Understandably, many employees were
reluctant to experiment much until man-
agement made changes to align reward
systems with the organization’s new value of
experimentation.
Defining ‘experimentation’
Experimentation is a trial-and-error process
in which each trial generates new insights
on a problem. Learning by experimentation
is fundamental to solving problems for
which outcomes are uncertain and where
critical sources of information are non-exis-
tent or unavailable. Imagine trying to
unlock a door with a set of unfamiliar keys.
Putting one key into the lock to see if it will
turn is experimentation; even if the experi-
ment fails, new knowledge is created that
narrows the scope of subsequent trials.
Each trial in experimentation gener-
ates information about a solution that the
experimenter could not know in advance.
Information learned in a previous trial can
be used to modify subsequent experimental
designs, conditions, or even the nature of
the desired solution. Tasks that are con-
ducive to effective experimentation are
those that allow multiple problem-solving
trials and present opportunities to use
knowledge gained from earlier trials to
enhance learning in subsequent trials.
Experimentation is critical to organiza-
tional innovation. Important discoveries in
science – such as artificial vaccines – and
technology, such as the electric light bulb,
resulted from constant trial-and-error
experimentation through which inventors
systematically built up a knowledge base.
Research shows that R&D teams spend
almost 80 per cent of their time on experi-
mentation, and that these experiments
constitute an important source of technical
information. Experimentation advances
understanding of new concepts, promotes
new ways of thinking, and creates new
knowledge. More broadly, individuals who
constantly improvise, tinker, and experi-
ment are able to remain adaptive in
fast-paced industries where new ideas are
constantly in demand.
The role of failure in experimentation
Failures are unavoidable outcomes of
experimentation, because the outcome of
any single experiment or trial is always
uncertain in advance. For example, when
selecting one unknown key out of many to
unlock a door, one does not know in
advance whether or not the key will work;
risk of failure is thus unavoidable. Such fail-
ures can be beneficial because they provide
the experimenter with new knowledge
about the solution and thereby facilitate inno-
vation and performance in the long run.
Research shows that when pharmaceu-
tical companies such as Eli Lilly launch new
drugs, or automotive firms like BMW
introduce new cars, the products are the
result of as many failed experiments as suc-
cessful ones.An innovation process is at least
partially based on ‘accumulated failure’ that
has been carefully understood. Individuals
who select tasks in which failures are likely
(rather than safe tasks in which they know
they can perform well) tend to persevere in
the midst of hardship and perform better in
the long run than others.
Despite its benefits, failure has costs,
and is often avoided by both organizations
and their members. Clearly, failures can
alienate customers, reduce business, and
lead to dissatisfaction among employees. At
the extreme, failures can harm employees
or customers, financially undermine the
organization, and lead to the organization’s
demise. Yet, even when these costs of fail-
ure are greatly reduced, people are still
reluctant to experiment. One study
showed that when new technologies dra-
matically reduced the economic costs,
time, and effort associated with experi-
mentation – such that incurring failures
would not harm the organization’s budget,
deadlines, cost structure, employees or cus-
tomers – individuals still seemed to avoid
experiments in which failures were likely.
This avoidance can be explained by the
interpersonal or social costs of failure.
Specifically, failures make one’s gaps in
expertise and knowledge salient to others,
while avoiding failure helps to maintain
one’s image and professional standing
among colleagues. Interpersonal costs of
failure are exaggerated when people lack
‘psychological safety’ – a belief that a group
or organization will not hold a person’s
mistakes, errors, and failures against him or
her.Without psychological safety, individu-
als are likely to be concerned with the
interpersonal risks of failure and to be
reluctant to engage in experimentation.
Differences across organizations in
psychological safety have been shown to
affect the level of anxiety people feel when
confronting ambiguity and uncertainty.
Psychological safety can be created by sup-
portive structures such as information and
reward systems, and by the words and
actions of high-level management. In
particular, messages that indicate support-
iveness, openness, and tolerance for error
affect beliefs about the level of psychologi-
cal safety throughout an organization.
Normative vs. instrumental influences
Research shows that creativity is related to
organizational culture, reward systems,
supervisory encouragement, trust, and
resources. Feedback, help-seeking and
issue-selling behaviours are all predicted
by supportive organizational norms, lead-
ership openness, and trust. Proactive
learning behaviours are related to sup-
portive organizational contexts (access to
resources, information, training, and sup-
portive reward systems), leader coaching,
and routines that encourage exchange of
relevant information, reduce sensitivity to
feedback, decrease defensiveness, and
increase trust.
Organizational variables that affect
innovation behaviour include both normative
and instrumental influences. Normative influ-
ences, such as organizational culture and
espoused values, influence employee beliefs
and behaviours by establishing norms and
standards that define appropriate and inap-
propriate forms of behaviour. Normative
values can be explicitly stated by leaders
(e.g., through speeches, signs or memos) or
tacitly communicated in features of the
organizational environment (e.g. organiza-
tional routines). There is evidence that
when normative values state that failures are
expected and acceptable as part of learning,
people are less hesitant to discuss mistakes
and more willing to try novel tasks even at
the expense of incurring more failures.
The second category – instrumental
influences – pertains largely to formal
reward systems and incentives. Instrumental
Rotman Magazine Winter 2005 • 21
rewards influence the ‘instrumentalities’, or
costs and benefits, of experimentation
behaviour. For example, when employees
do not have easy access to time, materials or
information to experiment with their ideas,
experimentation can be too costly to be
practical. Rewards systems that punish fail-
ures increase the costs of experimentation,
and may make individuals reluctant to
experiment. For instance, a study of airline
employees showed that reward systems that
punished individuals when problems arose
reduced employees’ willingness to adopt
new routines.
The effects of evaluative pressure
One critical factor in organizations is ‘eval-
uative pressure’ – the degree to which
individuals are being closely evaluated and
monitored on their performance. Being
closely evaluated inhibits experimental
behaviour, because it reduces psychological
safety and the willingness to risk failure.
Evaluative pressure is high when
bosses – or even peers – are seen as judging
rather than enabling one’s performance.
Being closely evaluated inhibits experi-
mental behaviour, because it reduces
psychological safety and the willingness
to risk failure.
Although most individuals in organizations
are being evaluated to some extent, some
employees face more evaluative pressure
than others. Individuals under high evalua-
tive pressure receive intense scrutiny
directed at rating their performance rather
than at providing helpful information or
feedback. In contrast, those under low eval-
uative pressure either receive helpful
information and support from supervisors
or other observers, or else simply face a
lack of intense scrutiny.
Evaluative pressure is distinct from
coaching, in which close attention or mon-
itoring is provided to facilitate rather than
evaluate performance. Indeed, monitoring
in the context of supportive coaching can
actually enable interpersonal risk taking,
while close and constant evaluation
22 • Rotman Magazine Winter 2005
intended to identify and expose failures has
been shown to inhibit creativity and make
novel or unfamiliar tasks more difficult.
Evaluative pressure makes failures espe-
cially salient – inhibiting admission of error
and help seeking – and is thus likely to
inhibit experimentation.
There are observable and documented
differences between individuals under high
and low evaluative pressure. First, when
facing ambiguity and uncertainty, people
under high evaluative pressure tend to be
more aware of the potential for punishment
and thus are risk averse, leading to behav-
ioural inhibition and less experimentation.
In contrast, people under low evaluative
pressure facing uncertainty tend to be more
aware of the potential to learn from the sit-
uation and thus are willing to take risks,
experience greater behavioural activation,
and engage in more experimentation.
Second, being evaluated creates the
psychological burden of being constantly
aware of and thinking about one’s perform-
ance and of the impression one is making
on the evaluator.This psychological burden
can tax an individual’s mental energy and
attention, which in turn can prevent the
type of in-depth processing that is essential
for contemplative, strategic, and effective
experimentation.
Third, evaluative pressure shapes the
emotional experience of coping with uncer-
tainty. For example, research has shown
that, in response to uncertainty, individuals
under high evaluative pressure are more
likely to exhibit guilt, while individuals
under low evaluative pressure are more
likely to exhibit anger. High arousal emo-
tions such as anger might produce more
proactive behaviours directed towards
change and innovation – thus responding to
the uncertainty through search – as com-
pared to the low arousal emotions of guilt,
which instead may inhibit proactivity.
Fourth, individuals under high and low
evaluative pressures react to emotion dif-
ferently. Specifically, uncertainty often
produces fear, which has been shown to
produce two somewhat contradictory
responses: one is an ‘automatic’ or instinc-
tive response of behavioural inhibition (or
inaction) that requires no expenditure of
mental or cognitive resources; the other is or
a more ‘controlled’ response of behavioural
activation that requires one to exert some
level of in-depth processing of the situation.
Given that being under high evaluative
pressure can tax one’s mental energy and
attention so that fewer cognitive resources
are available, it is often the case that the fear
that results from facing uncertainty produces
the ‘automatic’ response of behavioural
inhibition. In contrast, those under low
evaluative pressure do not share the
salience of failure and punishment, nor do
they experience the same drain on their
mental energy and attention, and so they
have more cognitive resources available with
which to react to fear in a ‘controlled’ fash-
ion, characterized by higher levels of
thinking, information processing, and action.
Consistent vs. inconsistent
organizational conditions
How do combinations of organizational
variables affect innovation behaviour? The
combinational perspective assumes that the
combination of conditions employees face
may be as influential as the individual condi-
tions themselves. The Bank of America
example illustrates what can happen when
normative values are changed to explicitly
encourage experimentation and instrumen-
tal rewards discourage it. Inconsistency in
organizational conditions may actually do
more harm than good, because it creates
uncertainty in which individuals do not
know which factor (e.g., normative values
or instrumental rewards) will shape the
organization’s response to their actions.
Consistency, or lack thereof, has impli-
cations for psychological safety, which is
greatest when organizational conditions such
as instrumental rewards, normative values,
and evaluative pressure are aligned, consis-
tently encouraging experimentation. Under
these conditions, the message that failure is
an acceptable element of the innovation
process is powerful and unambiguous. Thus,
when organizational conditions consistently
encourage experimentation, we expect
more experimentation behaviour than when
organizational conditions consistently dis-
courage experimentation.
In contrast, inconsistency can reduce
psychological safety, and thus experimenta-
tion. First, inconsistent conditions make
the rules unpredictable and ambiguous.The
uncertainty about whether one will be pun-
ished creates a state of mild fear, which is
antithetical to feelings of psychological
safety. Second, facing the need to simulta-
neously serve contradictory aims itself may
create anxiety, lowering psychological
safety. Inconsistent messages place people
in a bind because they communicate two
incompatible goals (e.g., “experiment with
new ideas, but don’t fail”). Facing this, peo-
ple may experience emotions of fear or
anxiety that make taking action and not taking
action equally unpleasant alternatives.
Third, inconsistency has been shown to cre-
ate cognitive and emotional responses such
as suspicion, mistrust, and confusion, lead-
ing to ‘threat rigidity’, a tendency towards
risk aversion, behavioural inhibition, suppres-
sion of activity, avoidance, lack of openness,
and an inability to try novel behaviours.
Because inconsistency lowers psycho-
logical safety, increases fear, and makes
failure’s social costs salient, it in turn
inhibits experimentation behaviour. In this
way, inconsistent organizational conditions
can inhibit experimentation, compared to
consistent organizational conditions. While
this argument leads to the somewhat intu-
itive idea that consistently-encouraging
organizational conditions would encourage
more experimentation behaviour than
inconsistent conditions, it also suggests a
less intuitive scenario. Specifically, it is
possible that individuals will engage in more
experimentation behaviour when organiza-
tional conditions consistently discourage
experimentation than when some condi-
tions encourage experimentation and
others do not. In the consistently-discourag-
ing situation, individuals are clear about the
rules and constraints they encounter, and
therefore may experience more psychologi-
cal safety than they would when facing the
uncertainty created by inconsistent condi-
tions. If so, they may experiment more.
Further, in consistently-discouraging
conditions, people working closely together
can experience a sense of solidarity based
on shared perceptions of negative work
conditions, whereas inconsistent conditions
may lead to mistrust and suspicion that
undermine psychological safety. When an
organizational context discourages experi-
mentation, the immediate interpersonal
context in a specific work group can still be
characterized by psychological safety,
Inconsistency lowers psychological
safety, increases fear, and makes
failure’s social costs more salient.
encouraging experimentation, albeit at a
smaller scale. Although this suggests the
possibility that experimentation may be
higher in the consistently ‘discouraging’
conditions than under inconsistent condi-
tions, this goes beyond the core message of
this article.
In a related vein of inquiry, a recent
study of HR practices showed that bundles
of interrelated and internally consistent HR
practices create multiple, mutually-rein-
forcing conditions that support employee
motivation and skill acquisition. In this way,
an organizational characteristic may have
beneficial effects in combination with one
set of organizational attributes but a detri-
mental effect in combination with another
set of organizational attributes. Taking this
perspective means examining synergistic
and higher-order interactions rather than
simply examining main effects or linear
relationships.This perspective also suggests
that changing single organizational attrib-
utes in a piecemeal or incremental fashion
may be detrimental to outcomes.
Conclusion
The finding that inconsistency leads to less
experimentation among those under high
evaluative pressure is consistent with the
idea that multiple organizational conditions
should be aligned in the same direction to
support desired behaviours.When individu-
als are exposed to consistent messages, each
is more likely to be seen as credible and
thereby has a stronger effect on behaviour.
Inconsistency in organizational conditions –
when some encourage and others discourage
experimentation – may undermine experi-
mentation behaviour, with one factor
rendering the other ineffective. Inconsis-
tency creates suspicion, mistrust, fear,
confusion, and risk aversion for individuals
under high evaluative pressure.
Individuals under low evaluative pres-
sure are more likely to perceive
themselves as having control over external
environments, being able to influence oth-
ers to see things their way, more able to
effect change, and as more likely to have
an internal locus of control. Thus, when
organizational conditions are inconsistent
and the environment appears uncertain
and unpredictable, individuals under
lower evaluative pressure might be able to
draw upon these internal, psychological
resources in order to support experi-
menting with different ways to effect
change and exert control over this uncer-
tain environment.
All of these explanations have in com-
mon the observation that, facing
unpredictability, individuals under high
evaluative pressure are more likely to
become inhibited, afraid, narrowly
focused, and rigid, while individuals under
less evaluative pressure are more likely to
become proactive, optimistic, thoughtful
and risk seeking.The proposition that indi-
viduals experience different responses to
combinations of organizational conditions
depending on their levels of evaluative
pressure has far reaching implications for
behaviour in organizations.
Harvard Business School Professor Amy Edmondson is the
2003 recipient of the prestigious Cummings Scholar
Award, given annually by the Academy of Management to
recognize outstanding achievement by a researcher in
mid-career. This article is based on a paper she wrote
with University of Michigan School of Business Professor
Fiona Lee and Harvard colleague Stefan Thomke that
appeared in the June 2004 edition of Organization Science.
Rotman Magazine Winter 2005 • 23