The Hard Truth About Creating an Innovative Culture

Only those who dare to fail greatly can ever achieve greatly.”

— Robert F. Kennedy

There are two kinds of innovative company cultures. Those where people make mistakes and those where people lie.

Kenneth Lay and Jim Owens shared similar backgrounds. The former chairman of Enron and former CEO of Caterpillar grew up in humble households.

Each worked hard, took several jobs, studied at state universities, and earned PhDs in Economics. Both were successful — they became CEOs of Fortune 100 companies.

However, the careers of these two leaders finished quite differently. Their mistake tolerance played a significant role.

Owens acknowledged mistakes — he learned from failure.

Lay paid a high price for ignoring mistakes. He was formally indicted for his role in the Enron scandal. And his career ended in disgrace.

Mistakes are vital for learning, innovation, and growth. But to learn from errors, leaders must first face them. They need to become mistake tolerant.

Innovative companies are mistake tolerant

Most organizations ask people to take risks, to experiment more, to be more innovative. Yet they don’t have a clear approach to mistakes.

Building an innovative culture is not just about failing fast but failing smarter.

Organizations should start by establishing clear rules. People want to know what will happen if they make a mistake.

Are you encouraging people to celebrate errors or to bury them? Does your team feel supported or afraid of being punished? Do you focus on finding the lesson or who to blame?

A culture driven by fear kills innovation. If your company doesn’t encourage and reward mistakes, how can you expect your team to take more risks?

Unfortunately, failure still carries a lasting stigma in business.

A culture of perfectionism drives mistake avoidance — errors become unacceptable. Leaders worry more about not falling from grace than finding the lesson in disguise. )LINK).

Research shows that making mistakes boosts our memory and creativity. Neurological studies discovered that mistakes cause our brain to spark and grow.

Laurence G. Weinzimmer wrote:

“Smart people have the ability to see mistakes as feedback that will help them improve, and they become experts in learning how to learn from mistakes.”

Business leaders who do not fail are not taking enough risks. That’s the hard truth about creating an innovative culture.

Here are 7 ways to build a mistake tolerant company culture.

1. Tolerate your own mistakes

Practice what you preach. Be the first to acknowledge your own mistakes. Lead with the example if you want others to tolerate their own.

The paradox of mistakes is that arrogant leaders are more likely to be punished for making them. People tend to forgive those who have an authority based on their expertise. But are merciless with those who pretend to know it all.

Tim Harford invites us to use humility as a problem-solving technique.

To find a solution, we must first recognize our mistakes — not avoid them.

Accepting failure is a tool for uncovering a fresh perspective. And a unique problem-solving strategy for your company. Developing a mistake tolerant culture starts at the top.

2. Have a transparent mistakes policy

Clarity is everything. Especially when it comes to taking risks. People don’t want to take the leap if their bosses don’t have their backs.

I’ve seen companies pay lip service to failure mistakes, but then turn around and fire people.

Many corporations have borrowed the “fail faster” motto from the startup community. But what does it really mean? How will the company embrace that?

Here’s a simple guide I use with my clients: “Fail fast, learn faster, adapt smarter.”

A clear mistake policy is more than a motto. It’s about recognizing that mistakes are lessons in disguise. And that invites people to experiment — it feels safe to try new things.

Like every company rule, behaviors matter more than words. Encouraging people to experiment is useless if they will then be punished.Clarity is everything. Especially when it comes to taking risks. People don’t want to take the leap if their bosses don’t have their backs.CLICK TO TWEET

3. Adopt a trial and error approach

Experimentation is the path toward innovation. No first idea is ever good enough. We must keep building and trying until we find the best one.

It took James Dyson 5,127 prototypes until he found a design that worked for his bag-less vacuum cleaner. Not one or three attempts but thousands.

Each failure was a lesson. Dyson didn’t let failure disappoint him. His trial and error approach helped him evolve the design until he made it.

Recycling failures is another way to embrace trial and error.

Many products fail but can be repurposed for another problem. Take the AIDS drug AZT. It was a failed treatment for cancer. Viagra was once a failed hypertension medication.

A trial and error approach requires seeing mistakes as temporary stops, not as the final destination.

4. Distinguish errors from stupidity…

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