The most competitively innovative companies have a tolerance for failure. But they don’t have a tolerance for incompetence.
only good for a company’s bottom line. It also is something that both leaders and employees value in their organizations. In seminars at companies across the globe, I have informally surveyed hundreds of managers about whether they want to work in an organization where innovative behaviors are the norm. I cannot think of a single instance when someone has said “No, I don’t.” Who can blame them: Innovative cultures are generally depicted as pretty fun.
It sounds obvious that companies should set high quality standards for their employees, but unfortunately all too many organizations fall short in this regard. Consider a pharmaceutical company I recently worked with. I learned that one of its R&D groups had not discovered a new drug candidate in more than a decade. Despite the poor performance, senior leaders had made no real changes in the group’s management or personnel.
Managers are especially uncomfortable about firing or moving people when their “incompetence” is no fault of their own. Shifting technologies or business models can render a person who’s very competent in one context incompetent in another. Consider how digitization has impacted the value of different skills in many industries.
Third, experimental data at Flagship is sacred. If an experiment yields negative data about a hypothesis, teams are expected to either kill or reformulate their ideas accordingly. In many organizations, getting an unexpected result is “bad news.” Teams often feel the need to spin the data—describing the result as an aberration of some sort—to keep their programs alive. At Flagship, ignoring experimental data is unacceptable.
In other places, the climate is more polite. Disagreements are restrained. Words are carefully parsed. Critiques are muffled . To challenge too strongly is to risk looking like you’re not a team player. One manager at a large company where I worked as a consultant captured the essence of the culture when she said, “Our problem is that we are an incredibly nice organization.”
Eisenhower was not just inviting criticism or asking for input. He was literally demanding it and invoking another sacred aspect of military culture: duty. How often do you demand criticism of your ideas from your direct reports?Well-functioning innovation systems need information, input, and significant integration of effort from a diverse array of contributors.
A good example of how accountability can drive collaborative behavior is Amazon. In researching a case for Harvard Business School, I learned that when Andy Jassy became head of Amazon’s then-fledgling cloud computer business, in 2003, his biggest challenge was figuring out what services to build . Jassy immediately sought help from Amazon’s technology teams, its business and technical leaders, and external developers.
At both Fiat and Chrysler, Marchionne moved his office to the engineering floor so that he could be closer to product planning and development programs. He was famous both for being detail oriented and for pushing decision making down to lower levels in the organization.