Leveraging Failure in Product Management

Innovation and failure go hand in hand. It’s impossible to bring new products and features to life without taking informed risks and making mistakes. But effectively leveraging failure can be challenging on a personal and organisational level: As individuals and companies, we want to succeed, not fail. This article shares my recommendations on how to fail well and learn from it.

Why Failing Can Be Hard

If we like it or not, failure is an essential innovation ingredient. It’s impossible to successfully innovate without taking informed risks and making mistakes. YouTube, for example, failed as a video-dating site and succeeded by pivoting to video-sharing site; and Google Glass failed as a consumer product and was recently re-launched as a B2B product. As these examples show, you are bound to make mistakes whenever you try something new: You may discover that some of your ideas and assumptions are wrong or that you have executed them wrongly. As individuals and businesses, we should therefore appreciate failure—product success would otherwise be impossible to achieve. But deep in our hearts, many of us dread failure. Why is that?

Most larger companies are great at maintaining existing products and leveraging them as cash cows in order to generate vital business benefits. This often leads to a conservative attitude, protection of the current assets, and focus on operational excellence and flawless execution. In such an environment, product innovation is the exception rather than the norm, and experimentation and making mistakes are discouraged. In the worst case, such a company experiences Innovator’s Dilemma: It has lost its ability to embrace new opportunities and technologies and can’t keep up with new competitors.

But it would be wrong to say that it’s all management’s fault. As individuals, we sometimes see failure as a threat and consequently shy away from it. That’s partly due to our conditioning—we usually don’t get praised in school for failing, and we certainly don’t get great marks for making mistakes. But I’ve noticed that failure becomes particularly difficult for me if it challenges my self-view. If I identify myself with what I know and do, then failure jeopardises my sense of who I am and how others might perceive me. This restricts me to my comfort zone—I keep doing what I do well—as this feels nice and pleases my ego. The drawback is that I don’t develop and grow, avoid challenging projects, and miss new opportunities.

I’ve also noticed that when I badly want to succeed, I don’t want to be confronted with failure, and I consequently ignore it—sometimes without being aware of it. This makes me prone to confirmation bias, which is the tendency to favour information that confirms our preconceptions, and it puts me in danger of ignoring data that indicates failure. Instead of build-measure-learn, I now get build-measure-deny; instead of inspect-and-adapt, I end up with inspect-and-ignore—which is hardly a recipe for achieving product success.

Luckily, there a number of things we can do to accept and leverage failure, as I discuss below.

Create a Fail-Safe Environment

If there is fear of failure, if people are worried about their jobs and career prospects when they make mistakes, then failure is unlikely to happen. Consequently, learning from failure and successful product innovation are difficult to attain. At the same time, companies must protect their cash cows to generate enough revenue and other business benefits, as I pointed out above. The following techniques make it possible to fail safely and protect mature assets.

• Innovation Lab: A dedicated research facility that is tasked with new product development. Many tech companies including Google and Microsoft use labs—which are sometimes also called research centres. The potential drawback is a disconnect with the rest of the company (ivory tower syndrome).
• Incubator: A temporary business unit created to bring a new product to life. As soon as the product is launched, the incubator is dispersed, turned into a permanent business unit, or spun off as a separate business. Incubators avoid the ivory tower syndrome of innovation labs. But it can be hard to create the right environment that removes people (temporarily) from their peers and encourages them to think outside the company norms.
• Hackathons: A dedicated event where people come together for one or more days to try out new ideas. Facebook’s Like button was conceived in a hackathon, for example. A potential drawback is solution focus—it may be more important to build a cool prototype than to understand if and why people would want to use the product or feature.
• 20% Rule: Engineers can spend up to 20 percent of their time exploring new ideas. Google Mail and Google Chrome browser were conceived this way, for instance. A drawback is a seemingly high investment in innovation.

Whichever approach you choose, ensure that you create an environment that allows you to fail and learn fast: The earlier you fail, the cheaper the failure tends to be; the impact is less severe, and you will have more options to take corrective actions. What’s more, late failure can be more difficult to accept on a personal level, as you may have become attached to your ideas and find it hard to let go of them.

Change the Corporate Culture

While the techniques above are great to develop new products and features, they accept that innovation and failure are not necessarily the norm—hence there is an innovation lab and there are hackathons, for instance. But when a company wants to emphasise innovation and make experimentation and failure mainstream, these techniques may not be enough. What may be required is a change in the corporate culture—the values and principles that guide people’s actions at work.

One way to do this is to host fuckup nights—please excuse the explicit language. For most companies and products, the path to success is paved with failures and mistakes. Talking about them, however, is usually taboo. At fuckup nights, people share their failures thereby encouraging others to dare to make mistakes and learn from them. Take Otto, a German online retailer, where executive and senior managers have spoken at company-internal fuckup nights and shared their personal failure stories, which I think is great.

Even if your top management is willing to share their failure stories, you may want to consider organising Failure Swapshops—originally created by Luke Williams—for the product people at work or a meetup. I remember attending a Failure Swapshop lead by Adrian Howard at the ProductCamp London in 2015, where the participants were invited to share their failure stories. I was amazed by how open people were and how many mistakes we all make—it was a brilliant and very cathartic session.

Another way to change the company culture is to make failure part of the company values, as Intel has done, for example. Its values recognise that risk taking and failure are unavoidable to achieve success thereby encouraging people to “foster innovation and creative thinking, embrace change and challenge the status quo”. When I worked for Intel—which was admittedly a long time ago—you could and should use the values to challenge your boss, peers, and yourself.

But if you can’t secure executive support to change the company values, do not despair: You can still change yourself thereby acting as a role model and encouraging others to change.

Change Yourself

Changing your outlook on failure is maybe the most important and powerful option you have. What helps me is trying to see failure not as a threat but an invitation to learn, improve, and grow as a product professional and a human being. That’s possible if I don’t let my knowledge, expertise, and achievements define who I am, but rather hold them lightly and embrace a growth mindset.

Failure really is part of life: If we all had not repeatedly tried, failed, and tried some more, we would not be able to walk—let alone speak, read, and write. You should therefore not view yourself as a failure when you fail. While it’s good to care about what you do, you shouldn’t let failure bring you down. This works if you don’t expect success or want it badly. Failure, then, can be a great teacher.

Mindfulness practice has helped me become more aware of my likes and dislikes, and be more at ease with failure. It has shown me that personal change is possible if I am patient and if I’m compassionate towards myself.