‘Fail fast’ has become a mantra for technology start-ups, but putting it into practice is difficult for businesses of all sizes. It’s easier to kill an idea or initiative when it’s an outright disaster. However, many ideas look like they could pan out if only more time, funds or human resources were to be invested in them. The result is often good money thrown after bad and lost traction in the marketplace.

Drawing an analogy between cheetahs and companies, Bain & Co’s Darrell K. Rigby, Sarah Elk, and Steve Berez say that it’s not enough to pursue innovative ideas faster. “Speed alone is not what makes cheetahs such awesome hunters. Computer models show that the best predictor of a successful hunt is not a cheetah’s top speed; rather, it’s how fast it stops and turns,” they write.

“There is an important parallel to the executive hunt for innovations. Whether they are developing new products, processes, or overhauling old ways of doing business, it’s not enough that organisations pursue new ideas faster. Unless they develop new muscles for skilfully decelerating and adapting to unexpected twists and turns, they are likely to come up empty-handed.”

In reality, however, innovation ideas that are not going to work out can be surprisingly resilient, especially if backed or driven by politically powerful stakeholders in the business. The sunk cost fallacy can also ensure that a project limps on for months or years longer than it should—after a large outlay of cash and hours, success may seem tantalisingly close and the idea of writing off the investment will be unattractive.

Here are a few thoughts on how to change this situation:

  1. Accept that failure is normal and can be positive 

Developing a culture of fast failure depends on lowering the costs of terminating a project or initiative. After all, if a senior stakeholder feels like a failure will dog their careers, they will fight harder to protect their idea or project. If they’re rewarded instead for taking calculated risks and learning from mistakes and disappointments, they will be more willing to move on.

Techniques like extensive prototyping, design thinking and minimal viable product (MVP), meanwhile, can help lower the costs, time and effort of experimentation. MVP is defined as “that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort.”

“The end results are better when you focus on an innovation or project as an opportunity to learn, rather than an opportunity to achieve success…In part, it’s because when you encounter a failure with a learning-mindset, you take it as a chance to grow. If you have a success-mindset, that same failure can be seen as an energy-deflating obstacle,” write Forbes authors, Jim Ludema and Amber Johnson.

  1. Base decisions on data 

The fairest and most effective way to know when it’s time to abandon an innovative product or programme is to set clear, measurable milestones and goals from the outset. There are many objective criteria that organisations can use to decide whether a project should be ended—here are some courtesy of Financial Management magazine:

  • The project has gone wildly off track in terms of budget, deadline or deliverables.
  • The money you are spending is likely to exceed the revenue and profit you expect to gain.
  • The benefits can’t be quantified.
  • You’re getting distracted from serving customers.
  • Your company’s strategy has changed.

Scott D. Anthony argues on HBR: “It is far easier to break up with an idea if you’ve been clear from the beginning about what success looks like, and have brought rigour to the process of experimenting around key unknowns. You never know for sure when you experiment, but you always should have HOPE – a hypothesis, objective, prediction, and execution plan to measure and test the prediction.”

  1. Increase transparency

Rigby suggests that organisational transparency can help make it easier to ditch an idea or project in a timely manner: “It’s hard to improve or stop unproductive work if you can’t see what work is being done and how well it’s going… Increasing visibility is good for everyone. It helps senior executives uncover valuable initiatives, recognise the people pushing them, and accelerate their progress.

“It allows employees to see projects related to their own jobs, learn from them, and identify where their expertise could solve perplexing problems or save time and money. It makes it easier for everyone to identify duplicative work and triggers discussions about whether overlapping teams should collaborate or compete. It helps teams working on interdependent steps to coordinate and minimise delays.”

  1. Hedge your bets 

An organisation that has more than one great idea in play will be more confident about abandoning those that are not working out as anticipated. PwC’s Vicki Huff says: “In the culture of innovation we are driving, you test often, fail fast and learn quickly. Innovation like this, at an individual venture level, is a portfolio play, with lots of small spinning plates, ideas and changes.” The benefit of this approach is that it forces project and product owners to constantly question why things might not work rather than trying to force them to work.

Balancing cost and opportunity 

A final piece of advice from Anthony is not to lose sight of the opportunity costs of ploughing on with an idea. “Executives should never look at an idea in isolation, because there will always be an argument for pushing on. Making clear that there are other more attractive opportunities both for corporate resources and the team itself makes the breakup more palatable,” he says. In other words, learn and move on.

References:

https://hbr.org/2020/09/start-stopping-faster

https://hbr.org/2018/09/why-design-thinking-works

https://www.agilealliance.org/glossary/mvp/#q=~(infinite~false~filters~(tags~(~’mvp))~searchTerm~’~sort~false~sortDirection~’asc~page~1)

https://www.forbes.com/sites/amberjohnson-jimludema/2019/02/18/failure-is-99-of-the-work-how-to-fail-fast-on-the-way-to-spectacular-innovation/?sh=19a259624c1e

https://www.fm-magazine.com/news/2020/jun/when-to-stop-a-project.html

https://hbr.org/2015/08/how-to-break-up-with-an-innovation-project

https://www.weforum.org/agenda/2018/08/3-ways-companies-can-get-serious-about-innovation/

[Photo by Interstid from Adobe Stock]