#55 from R&D Innovator Volume 2, Number 9          September 1993

The Risk of Not Taking a Risk
by Charles W. Prather, Ph.D.

Dr. Prather was manager of creativity and innovation at Du Pont's Center for Creativity and Innovation.  Through CW Prather Associates, in Annapolis, Maryland, he now consults on creativity and creative problem solving.

In business, there’s a saying, "You get what you pay for."  In management, you get what you reward.  And if what you reward is mistake-avoidance, how can you expect your people to take risks?  How can you expect them to stick out their necks if they've seen others do it—and have the guillotine blade drop?

You can't.  But if you're thinking that you really aren't in the business of making mistakes, think again.  By “mistake” I really mean a well-reasoned attempt that didn’t meet expectations.  Mistakes happen when people get creative, when they experiment, when they try to bring a product from conception to the marketplace.

So to have a culture of innovation, you need to tolerate—no, expect and welcome— mistakes.  By “innovation” I mean the process that takes a creative idea to a marketable product.  I often substitute the phrase “risk-taking” for “innovation,” since risk-taking lies at the heart of innovating—that is, trying out new ideas.  To take risks, you must banish the climate of fear that's all too common in today's corporations.   You can start doing this by looking at how your firm deals with mistakes.

Two Misconceptions About Mistakes

Unfortunately, one of the most common mistakes is to hide the mistake.  For instance, someone breaks a piece of expensive equipment by taking what he thought was a short cut, and then slinks out of the room hoping he wasn’t spotted.

Mistakes made at higher levels, which can be all the more costly, can be hidden more easily.  But it's hard to learn from something that's hidden—so by hiding mistakes you are fostering not only a climate of deception, but also a climate of non-learning—of deliberate ignorance.

Unfortunately, some organizations decide to focus on blaming rather than learning once a mistake has been acknowledged.  This practice sends a powerful message:  Your mistake will cost you.  But it also costs the company in terms of trust. 

The responsibility of management should not be assigning blame but rather learning from mistakes.  I’m fond of saying that management needs to fix learning, not blame.   And this leads to the approach that actually benefits from a mistake.  First, acknowledge the mistake.  Second, learn from it.  Third, spread the new information as far in the organization as necessary. 

If you expect people in the bottom rungs of the organization to heed this advice, you'd better practice it yourself.  DuPont, for example, after a safety incident, spends a great deal of effort learning from it, figuring out what went wrong and how to prevent a recurrence.  Then the new information is distributed widely, so the entire corporation can learn from the mistake—stressing at the same time the corporation’s respect for safety.

Change the Behavior, Not Just the Rules

As you probably know, mere public statements are rarely enough to change behavior.  You need a climate of trust and learning (and an absence of blame) to encourage employees to go public with their mistakes—a climate which makes it better for an individual to discuss mistakes openly rather than sweep them under the rug.  How can you establish such a climate?

One good way is to start acknowledging your own mistakes—to study them, to establish what I call a "pattern of learning."  If you did this, how long would it be before this pattern became the rule, rather than the exception, in your organization?

You could augment this attitude by steadfastly declining to fix blame, and refusing to tolerate others who do so.  If small mistakes start being admitted early on, at a curable stage, before they became expensive, then the wisdom of the system would become more apparent.

Although I've mentioned individual actions, what's really needed is a culture—a deliberate set of rules and customs that is designed to meet corporate goals.  The culture of an innovative industry must not be obsessed with mistake-avoidance, but with playing to win.  In a mistake-avoidance culture, you'll hear about the drastic consequences of taking risks, about past failures, about endless questions to ensure that only successful actions will be taken.  In a culture that stresses playing to win, taking risks is integral to the business process.  Corporate heroes are those who put their necks on the line, not the time-servers who play it safe.

Culture

I suggest three mechanisms to ensure that your organization is open to mistakes—and innovation: awards for risk-taking and innovation, a clear list of unforgivable sins, and repetitive actions that reinforce your preference for risk-taking.

Typically, rewards and recognition are given to those who succeed.  That's fine—if all you want to do is reward success.  But if you want to reward the competence, judgment and dedication that lead to taking a risk in the first place, why not make the reward before the results are even known?  That way, everyone in the organization recognizes that the award is for the risk-taking behavior, not the outcome.

Even a climate that encourages taking risks needs limits.  What are the unforgivable sins which will lead to a reprimand or dismissal?  I'd suggest these:  concealing mistakes, failing to learn actively from mistakes, and blaming others for mistakes.  (Unpleasant though it may be, once established, these taboos must be enforced.)

Repetitive actions—the routine events that enforce and support corporate culture—should be tailored to the new risk-taking environment.  Perhaps a part of each meeting can be devoted to discussing upcoming risks, existing risks, and risks on the horizon.  I recommend the R.I.P. (Risk in Progress) award—just a pat on the back for having the guts to take a risk.  Again, in these awards, the emphasis is on taking the risk, not the result.

To actually establish a culture that rewards risk-taking requires diligence, trust and persistence.  It's a journey that has no end, because innovation has no end.  But the exhilaration and rewards along the way more than justify the effort.  And in a time of ever-accelerating change, the risks of standing still are definitely more significant than the risks of taking risks.

Killer Phrases

Listen to the people around you.  What kinds of responses do you hear when ideas are forwarded?  Have you heard a conversation like this recently:

"How about trying this synthesis at 500 atmospheres?" 

"Nah, remember last year, when we spent a month trying to synthesize that new compound at high pressure and we wasted all that money building a new apparatus—and it didn't work?"

This ultra-reasonable argument is actually a killer phrase, one of the endless variety of statements that are used to kill good ideas stillborn.

It seems that the more you know about a process, the more killer phrases you'll invent.  You already know what works and what doesn't—after all, that's why you were hired, right?  So why not trust your expertise?  Because the history of innovation proves, again and again, that these quick judgments are wrong.   Some famous quotes come to mind:

“The bomb will never go off.  I speak as an expert on explosives."  (Admiral William Leahy, on the U.S. Atomic Bomb Project)

“Man will never reach the moon regardless of all future scientific advances.”  (Dr. Lee DeForest, inventor of the vacuum tube) 

So instead of prejudging, how about asking what's right about an idea first, then building on that?