Innovation management – why a constructive approach to mistakes is needed

Are you familiar with the SmartSpending app for children and young people or the ‘renting your own property’ project? You’re not? It’s little surprise as they are two of 65 unsuccessful projects in total carried out at VNTR over the past five years. They were all recently included in a black book entitled “From Epic Fails, to Happy Failures, to No-Need Fails, to Failures by Following Management”. This failbook is an inspirational source of reference for unsuccessful innovation projects and the valuable lessons that VNTR has drawn from them. It’s also a courageous publication. Failure is still very much a taboo subject in Switzerland.

Ruling out innovations with little chance of success at an early stage

“We hope the book illustrates that failure is an essential part of the innovation process – especially for innovative ideas tackled at a very early stage or which are not yet within reach,” remarked Mathias Strazza, Head of VNTR at PostFinance. Failure enables innovation projects with a low chance of success to be eliminated in favour of ones with good prospects as quickly as possible. “Out of countless innovation projects only one may be worth pursuing. To identify it as quickly as possible, the others must be excluded from our work process.” The innovation team constantly challenge and scrutinize their projects critically and, if necessary, abandon them – whether after the exploration phase, when ideas are scrutinized, after the experimental phase or during the pilot phase. “Fail quickly, fail often, learn from it and try again” is also one of VNTR’s key principles. Projects sometimes fail unexpectedly, perhaps because the process does not work as envisaged or because the organization does not want to or is unable to embrace the innovation. The findings from such cases help to ensure improvements in the procedure and decision-making process.

Drawing conclusions rapidly

Many innovation management methods are geared towards generating rapid learning processes, such as prototyping, for example. This makes it easier to understand and experience ideas, forming the basis for further discussion, the thought process and testing. A prototype is a model and a taster of how the end product could eventually turn out – but does not necessarily have to. The ‘build-measure-learn feedback loop’ also helps to draw conclusions early on about the subsequent development of an idea. This is achieved by means of targeted, gradual testing of key product factors with customers.

Innovation cannot be achieved without a constructive approach to mistakes

In contrast to other activities, innovation management entails a degree of risk, is susceptible to error and is a constant learning process. Strazza underlined: “At VNTR we deal with new concepts, ideas, business models and prototypes that we explore and test out. This often doesn’t go according to plan – innovations are challenging and frequently take unexpected turns. There are generally more hurdles than open doors.” That’s why learning as much as possible from mistakes and perceiving them as an opportunity is an important part of VNTR’s working culture. This is also known as a ‘fail forward’ approach. Not only is it necessary to make mistakes at VNTR, failed projects are actually celebrated – with a thank-you for the people who believed in them. “We celebrate them because we want to learn from mistakes and to prevent our employees from being afraid to fail.”

Sharing its constructive approach to mistakes

To convey the constructive way in which mistakes are dealt with to the outside world, VNTR decided to produce its failbook. This illustrates, for example, that a highly promising project, such as renting your own home – a solution which involves renting a house before you can own it – failed due to the restrictive criteria of the market pilot. It also reveals that there was no revenue stream or source of financing for the SmartSpending app for children and young people, which aimed to help people to avoid falling into debt, despite its strong content. VNTR used these errors to learn how to deal with new mistakes and failed projects in future and to also reflect on and draw lessons from them.