MISTAKES: THE

FOUNDATION OF
INNOVATION
Chapter 11
What is the GOAL of my Business?

■ In Sports, there are athletes who only set outcome goals and
successful athletes who set process goals as well as outcome
goals.

■ Developing products and services is a process.

Example: Making money (outcome goal)
Microsoft
Make MORE MISTAKES

■ To get past the basics and actually develop a deeper

understanding of any art or skill, one has to be willing to make
a lot of mistakes.

■ Big success requires a willingness to fail.

Example: Apple in 1990
■ Being willing to make a mistake worked out pretty well in the
end.

■ In business, mistakes cost money, and wasting money is a

cardinal sin. Mistakes are bad.

■ Making the same mistakes over and over again, that is the
problem.
The Efficiency Paradox

■ One of the big problem of mistakes is we view them as

inefficient.

■ An efficient system is frequently described as one in which

there are no mistakes.

■ Cultures are the residue of success, of lessons learned

overtime.
■ Innovation only comes about when you are willing to risk that
burn.

■ There are certain situations which there is no room for

mistakes.
Example: Surgery and landing an airplane.

■ The goal is to make sure those mistakes occur in settings that

do not involve people getting killed.

■ They are also expected to rapidly recognize and adjust to

changing circumstances.
■ Coping with mistakes without losing your mental balance.

■ The problem with innovation is that it’s a process that feels

inefficient and requires a great willingness to make mistakes.

■ Mistakes are more and more often seen as punishable offense

rather than opportunities to create the next big things.

■ The fear of mistakes starts to prevent experimentation and

exploration.

■ The goal is to make the right mistakes!

 What is the connection between
Organizational Culture and Innovation?

■ A company with a strong track record of success and that has

developed a strong corporate culture may come to believe that
it controls environment.
Example: IBM in 1980s, they dominated the computer
industry – turned out that what they truly dominated was the
mainframe market.
■ Avoidance is not a good strategy for coping with
anxiety at either the individual or the organizational
level.
The Problem with “Radical” Innovation

■ Radical innovation is a scary concept for most of

people.

■ It requires moving outside the safe territory established

by the organizational culture in its function as an
anxiety-reducing agent and in its encoding of the
memes that tell people how to respond to
environmental changes and challenges.
■ Radical Innovations involve leaping boldly forth unto
unknown territory.

■ Progress forward may require a great deal of faith, especially

in the early stages.

■ One of the aspects of organizational culture is that it defines

the way people are supposed to think.

■ People who think and act too differently may well be excluded
from the organization.
■ Depending on the nature of the specific organization’s culture,
new ideas will certainly encounter some degree of social
resistance, largely proportional to how radical those ideas are
and how large a perceived cost is.
 What are the traps
that organizations fall into?
■ Creativity is not the province of one or two people. It is
the province of everyone. Innovation is a group effect.

■ The first step to doing that is avoiding the traps.

The PERFECTION Trap

■ There was a great deal of very imaginative thinking but little

actual reality was allowed to intrude.

■ Naturally, once something is successful, we want to improve

on that success.
■ From the discussion of culture, whatever is perceived to lead
success is likely to be remembered and become part of the
culture.

■ “Once I have a sure thing, I stick with it. I don’t take risk” it is
the perfection trap.

■ Perfection trap is the belief that there is no longer a need to

take risks.

■ When a company thinks it knows just what the customer

wants, that’s the first warning sign of perfection trap.
The PROTECTION Trap

■ Protection trap is also known as “Don’t hurt our existing

products”.

■ The products that are making us successful tend to be

enshrined in the culture. They are part of how the company
grew, part of how it survives.
■ The more time, energy, and money that have been invested in a
product, the harder it is to say goodbye.

■ Protection trap is a belief that if you don’t compete with your

own products, neither will anyone else.
The IDENTITY Trap

■ The identity trap occurs when a company says “We’re an X,

not Y”.

■ The identity trap is not entirely a function of the company.

■ The biggest danger of the identity trap is that brainstorming is

stifled and ideas are stillborn because no one can see how they
fit into the company’s identity box.
The CREEPING BOX Trap

■ The farther out you can get and still create a variable business,
the better.
Example: Yahoo in the 1990s
How to IMPROVE?
Keep Learning

■ Giving people the opportunity to learn and improve their skills

also improves motivation, job satisfaction, productivity, and
loyalty.

■ Encourage people to take classes in a variety of subjects, not

just their areas of professional expertise.
■ It needs to be viewed as an important part of the job, just as
important as anything else people are doing.

■ The more they know, the better the odds are that they will
come up with something.
Spot Problems Early

■ The goal is not perfection, but being the best game in town.

■ They key to successful innovation is being willing to be wrong

a lot of the time.

■ The goal is to recognize the mistakes quickly, learn from them,

and move on: analyze, evaluate, adjust, not judge and punish.
Take a break!

■ Take a break reduces burnout and increases motivation.

■ Creative breakthroughs come not when we’re pounding our

heads against the wall but after we take a break and do
something completely different.

■ We work best when we mix intense concentration with variety

and relaxation.
Be Patient

■ It is true that a little patience goes a long way.

■ With great patience, there is a great result.

It’s a Process!

■ Viewing innovation as a process gives you control of the

situation.

■ Reward crazy ideas and you’ll get crazy ideas. That’s where
innovation comes from.
THANK YOU FOR LISTENING