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Nourishing a Culture of Failure

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Everybody and their brother is talking about creating innovation nowadays.

Where I live, our president, my state governor, my legislators (both local, state, and national), and the newspapers are all talking about how great startups and innovation is and how it's all going to transform the world.

Total horse manure.

What's going to transform the world is failure.

Picture this: you're a mid-level manager at a big corporation. Your boss comes to you and says "Joe, we need more innovation in this company. So I'm giving you an unlimited budget to go out and make innovation happen so we can succeed. Each month you will report back to us on your status: what you're doing to make innovation happen, what we are spending on it, and what your plans for the future are"

If you were an idiot, you would just find random people on the street, give them a few bucks, let them try for a few weeks, then kick them out. Meanwhile you'd be fishing in the Bahamas. But you're not an idiot, you are highly-educated professional. So you bring in a team of the best and brightest people in the entire world on the subject of innovation. You create an "incubator" to help teams succeed. You establish funding programs and publicity programs around the successes for when they happen. After careful study and lots of modeling, you pick a few teams and give them a mission: Go make something useful for the company happen!

And you look like a moron.

Why? Because the first teams, while very good at taking your money, trying very hard, and telling you things you would like to hear, aren't actually very good at making innovation happen. It's not their fault: nobody is trying to cheat you. And it's not your advisor's fault: they are the best in the world.

Now the time for reporting has come. Do you: a) go to the board and tell them you are a failure, or b) find the best way possible to spin where you are and make your report sound as upbeat as possible?

Be honest, now.

I've watched a LOT of middle-level managers in my time. There are a few who would tell the truth even if it hurt them, but even with those people I have to believe that human nature would pressure you to find reasons why it wasn't your fault: the team wasn't exactly what you wanted, the experts disagreed and you should have chosen the other path, the funding was inadequate, other companies poached your expertise.

(In fact, the "other companies hurt us" line is especially rewarding. Not only does it take the pressure off of you, it puts it on an entity that the group is primed not to like)

But Daniel, you might say, surely innovation happens at large corporations.

Yes, it does. But nowhere near in proportion to the amount of money and effort that is spent on it. There are lots of reasons for this -- try reading The Innovator's Dilemma for some of them.

Let's kick this up a notch. Let's say you are a politician -- doesn't have to be anybody we know, just some national politician. You see a need for innovation to save the economy. What do you do?

For most politicians this is easy: you bring together the best thinkers you can, come up with a system for creating innovation, then make this system part of your platform. Once you get elected, you implement your system (Probably calling it something like "The Daniel Markham Center For Innovative Excellence" I only hope it has a statue in front)

A couple of years go by. Your center has created Jack Squat.

What do you do?

If you think our politician is going to come out and say he's screwed the pooch, you haven't been watching politics very long.

So what's wrong here? To answer that question, I need to tell you about agile teams.

I teach teams how to be agile -- that is, I try to help companies have their people work more like Google and less like the IRS. And as part of that, the first thing I look for is whether or not they have created a culture of failure.

In fact, the first thing I look at in any system of people is whether or not they have created a culture of failure. We desperately need more failure in the world, and we need to start encouraging it.


You see, our mid-level manager and our politician made the same mistakes: they assumed that given the correct inputs, the correct output would occur. That is, if only the system were set up in such-and-such a way, the right results would happen.

But what are the "right" results? Well, for the manager, it was something to help the company. For the politician, let's be honest, it was something to make him look good.

The problem is: innovation is not a science. It doesn't work from the top-down. It works from the bottom-up. You can't decide ahead of time that every problem has a solution that this particular team can discover. What I want to see in my agile teams is the ability to say "The parameters you have given us preclude us from achieving the goals you want. Therefore we must stop"

That's failure. Cold, hard, honest failure. Sorry boss, it was a great idea but you were smoking crack. Either change the rules or stop. You've failed. It's not happening. I know you made a nice speech to the board about how we're going to change the face of the company, but that was rhetoric, this is reality.

Everything we see in modern culture, from TV to movies to Facebook, tells us that there are three modes: success, failure, or not trying. The vast majority of people are not trying. They sit around watching TV or playing games, content in the knowledge that if they do not try, they will never fail.

Politicians, sensing this fear to fail, run on platforms that tell us there is no failure. Lose your job? No problem. We'll pay your expenses. Have a house you can't afford? No problem, we'll make the banks come to terms. Need health insurance? No problem, we'll make sure that's provided for.

These are all worthy goals. Nobody wants to live in a world that's cruel and harsh. (Even though, guess what, even after accomplishing those things the world is still cruel and harsh). I am not saying these goals are bad. I am not saying we shouldn't have a moral society.

Along those line, I read recently that Norwegians have a socialist system that also has the highest percentage of startups in the world.

What an amazing statistic! Here most of us are teaching cold, hard capitalism and these guys have an incredible percentage of startups! Woohoo! Go Norway!

But then I asked myself: where are all the changes, innovation, and greater good that these famous Norwegian startups produce? I can't think of very many hugely successful Norwegian startups at all.

Of course, the problem here is that, in Norway, you cannot fail. Hell, if everything is provided for you, you can be running your own startup from here to eternity. It's just a really, really slow-growing startup. Hey look! Grandma has a startup. Been working on it since 1952.

I'm not trying to attack political systems. If you want a social democracy more power to you. I love Norway. I love change and believe that we should get better as a society. I firmly believe that emotional support, encouragement, and community support can be critical factors in success. What I'm trying to point out is that the coin has another side: that failure -- falling flat on your ass, painful, humiliating failure -- is a critical part of innovation and startups. When good-meaning people try to sell you on some idea or plan for innovation that's supposed to be great and heavenly, you have to ask yourself "How will this fail?"

Because if you're not having failure -- and a lot of it -- it's never going to work.

As much I've outlined this, I'm sure that many of you will still hear "Daniel is telling us that we should be cold and cruel to each other" But I'm not. I'm trying desperately to tell you how to evaluate changes in your company or country. Because statistically we can see that some kinds of changes work better to help innovation than others.

Parts of life are chaotic. They work best by creative destruction, by random attempts and failures, by the randomness of certain events happening together. We have a really hard time grokking this. We want life to be an engineered thing. By blanketing life with billions of full-hearted attempts at success that end in failure, we optimize the chances that various pieces come together for the betterment of all. In the long run, the failures don't matter, the successes do. But to have more successes we must necessarily have more failures.. Lots more. We need a million times as many failures as we currently have.

Politicians don't get elected on failure. Mid-level managers don't get promoted on failure. TV shows and movies aren't done about failures. You will never read an article with a title like "The Silicon Valley: Home to Far More Failures than Anywhere on Earth" Failure -- aside from being A Bad Word -- just doesn't exist in public. No wonder so many people shy away from it.

I don't know. Perhaps this is something that you simply can't explain to folks. You either understand it or you don't.


Isn't Opera a good example of a successful startup?

TV shows might not be *about* failure, but the process by which they're made involves an incredible amount of it. The number of pilots produced vs the shows that get on the air, and then the frequency at which aired shows are cancelled to make room for new ones, this all seems to agree with your point.

Startups as a whole may also be a positive example: society should have lots of startups, since we know that's an effective way to produce a small number of good companies. The lesson seems to be that we ought to keep repeating the pattern within our startups.

I was just going to say 'Opera'. Also, Norway has a population of 5 million. You're not going to have tons of startups you've heard of from a population that small.

> You're not going to have tons of startups you've
> heard of from a population that small.

Israel's population isn't much larger, and a large segment of that have a religious aversion to work and to technology.

Yet they have tons of startups, and Israeli expats are also a part of a lot of the energy in startup cultures in other parts of the world.

Also Trolltech...but the point about Norway makes no sense. There's nothing invalid about a non-technology startup, it still contributes to GDP.

Startups, whether failures or not (I believe) are some of the greatest reasons America has thrived in the recent century. Whether you startup, fail, startup again, fail, doesn't matter!

America has the greatest incentives for ingenuity and new companies and initiatives. Not sure about Norway...

I can appreciate that failure is an important part of creating startups that produce a useful product rather than an unwanted product. However, it seems like the end of this article seems to let our own political system off the hook. Is it true that Norway doesn't allow startups to fail or is it a greater problem that America punishes startups by making them pay more for the cost of health care for their employees, thereby ensuring that talented workers find themselves forced to join a major corporation to provide stability for their families?

As an anecdotal example, I am typing this comment now from a wonderful, "power-user" web browser developed by a startup in Oslo called Opera Software, which split off from a major company. You should ask them if they chose to create a startup because they felt their government ensured they could not fail. I think you'd hear quite the opposite.


Thanks for the comment.

On one hand, I never should have included anything political in my essay -- people just get too emotional about it.

But on the other hand, part of the problem here is our personal denial. The fear of tragic, public failure can be a powerful motivating factor in success. We take that denial and make it into public policy. Also I would point out that the more structured the environment, the fewer degrees of freedom there are in formulating a solution.

I find that whenever people start working with groups of other people -- whether teams, startup founders, or whatnot -- they start taking their own prejudices and applying them, usually with disastrous results. I've worked in places where "everybody just needs to be nice to each other" -- nothing got done. I've worked in places where nobody got fired -- nothing got done. I've worked in places where positive attitude was king -- nothing got done. And I've worked in happy, stress-free, positive attitude places where lots got done. The difference was the amount of productive internal stress the team either faced or put upon itself.

So I am a firm believer that stress is a critical factor for both innovation and productivity. That doesn't mean we should live in a world where we are beaten everyday, or where we work orphans as slaves, but it does mean that we need to be very careful about asking where we would like our society to go. There are no right or wrong answers, but I think you'll continue to find that societies without so many social safety nets -- societies with cruel and laissez-faire rules -- will continue to innovate circles around those which are more "advanced" I encourage you to take a unbiased look at the data. Take a couple of decades. It'll still be the same in 2050 as it was in 1950.

But I repeat: there's nothing wrong with wanting to live in a stress-free mature society where you don't have to worry about anything. It's a fine and worthy goal for many people. Not for me, but hey, everybody is different, right?

And of course, Opera is a great example of innovation. I sincerely didn't mean in any way to hurt the feelings or disrespect Norwegians. I love Norwegians. All 17 of them. (just kidding!)

All I'm saying is that it's a carrot and stick situation. We are very good at talking about the carrot part of things -- the wild success that can be yours if your startup succeeds, or the neat things some teams do. But nobody even wants to acknowledge that the stick part is valuable too. Failure is that-which-should-not-be-named. Certainly you could agree that both pain and pleasure serve a role in motivation, right? That's just psychology 101.

I really hope this didn't come off as sort of a grumpy tirade. It wasn't meant that way. Instead it was a plea for folks to look honestly at the reasons we stifle innovation, whether at a research center, a large organization, or in our governmental structures. As the bard said, "...The fault, dear Brutus, is not in our stars, But in ourselves..."

Parts of life are chaotic. They work best by creative destruction, by random attempts and failures, by the randomness of certain events happening together.

... and of course, this is exactly how evolution works. Try/fail is the very thing that brought life to this planet.

Interesting article.

Norway enjoys a high standard of living and 3.2% unemployment. Norway also provides both public and private health care.

If a start up could invent a system that would do the same things here, in the US, would you consider that a great innovation?

I'd like to get a better understanding of your article. Can you name a few examples of "innovation" from this last decade? And how failure played a role in it's success?

It seems we as a country had a lot of failures this last decade. And I guess on the plus-side these events have contributed to an "employer's paradise" of low wages and a large pool of available labor. Lots of sticks.

Norway has population size of South Carolina. How many successful South Carolinean (sp?) startups you heard of? Surely it should be booming there, not encumbered by socialist welware and healthcare?

Eugene you're going over the deep end here, bub.

There is a larger point about structure, failure, and innovation. You can either accept that point, or dispute it. But trying to spin this as a current political debate isn't going to happen, at least not with me.

The question about South Carolina illustrates this. The purpose of the essay was never to bash socialism or promote laissez-faire capitalism. Many times I pointed out that various forms of government are just fine -- as long as you can accept the trade-offs. The problem with fostering innovation is that people don't want to accept the bad parts about whatever their position is. They have an incredibly difficult time accepting their own bias.

To continue this line of thought, South Carolina (and indeed, many other places) has a higher perception of failure as being a bad thing than do other places -- say for instance Austin, Texas. This fear and shunning of failure in South Carolina is just as bad for innovation as the prevention of failure by socialistic policies some other places might have. What your college professor told you, what web site you hang out on, or who you think is cool doesn't really matter. It really has nothing to do with any of that -- except as an example of how your ideas about the world at large carry on to your attitudes about failure in particular. It's your attitude towards failure that matters, whether you are trying to prevent it, you are trying to ignore it, or you and trying to pretend it doesn't exist. I'm simply using political structures as an example of how inner bias in structuring the problem becomes structural bias that prevents the desired solution. People do the same thing in organizations of all kinds and sizes. This is the heart of why we do not have more innovation.

I would have happily used South Carolina as an example instead of Norway. The problem was editorial, not political. I can mention the situation in Norway in just a few sentences and folks immediately know what I am talking about. To begin to explain the cultural differences between, say, Columbia South Carolina and Austin, Texas would have taken up half the essay. It would have been a waste of space and contributed nothing to the point.

Thank you for the comment, though. I understand you have strong feelings about socialism. I hope you get to live in a place where you are happy with the structure and services of your government. And I hope it has a lot of innovation! I'd be happy to be wrong.

But I'm not.


Thanks for the comment!

You bring up an interesting point: prove yourself mister essay-writer. Give more concrete examples and describe exactly what conditions would satisfy your definition of successful environments for innovation.

I'd love to take you up on it. Perhaps in the future I can expand on this. I think there's much more material there for the digging. If a fellow had any writing skills he could probably make a book out of it.

As far as the situation in Norway (or anywhere else, for that matter), I'm happy with leaving it as being not much of a popular example of innovation, say, compared with Israel, a country of similar size. It's fair dinkum to ask me to clarify, but I think the generality works better in this situation. After all, I didn't want the essay to be a criticism of Norway. As long as they are happy with the situation they have set up? I say more power to them. I reserve my right, however, to compare different situations and express in general terms which ones I like better or worse.

I like you idea, though. Wonder how much material there would be for blowing out this topic a bit?

This will sound far-fetched, but it sort of matches the spirit of this article.

Rather than having more startups, why not just make it mandatory for everyone to incorporate themselves. It could do two things; first, the process of incorporation would be a great opportunity to teach everyone what capitalism and business is, training people to be entrepreneurs, and, second, people would have a more vested interest in what they are working on, they would have the opportunity to own their own work.

To me, nothing stifles innovation more than the employer/employee relationship. We should just get rid of it, if we're serious about maximizing innovation.

I'm not sure why, but your article opened a lot of thoughts and questions in my head. Your comments about taking an inventory of ourselves, I believe has been long overdue. I thought when 9/11 happened this country would have a serious and mature discussion about who we are and where we want to go. It's really too bad we missed that opportunity. People seem to think of themselves more as consumers rather than citizens. And forget that capitalism is not a form of government, democracy is. How innovative can consumers get? They just consume. Plus, I don't believe what we call capitalism today is really about capitalism in the traditional sense, it's more about control. Which chokes innovation as well.

These thoughts lead me to the question, what is innovation? Maximizing profits? Or causing change for the common good? And which path do we want to pursue?

For example, derivatives are pretty innovative, but they seem to cause a lot of harm to society as a whole. So, maybe it is a good idea to examine what we want to be. After all, there is nothing written that the Federal Reserve Note will last forever.


This seems to be a recurring theme of my work as well. For instance, when defining a "startup", there's nothing about it actually doing anything of value -- http://www.whattofix.com/blog/archives/2010/10/whats-a-startup.php. It's just something people want that's massively scalable.

Technology itself can be a form of drug, as I outlined in "Technology is Heroin"

Capitalism is very good at making things people want. It's not so good at all at validating that what people want is actually what is good for them -- drug dealers show this difference in stark contrast.

As for me, I'm a libertarian, so I'm firmly convinced that people should be allowed to destroy their own lives with drugs (or technology) as they see fit. There are probably some limits to the amount of freedom I would give folks -- things that addict you on one use come to mind -- but I haven't done all the thinking to determine where that line is. My response to your observation is that there are economic activities that I feel it is immoral to engage in. And I am starting to put video game development up there with writing programs for cigarette companies. I don't ding others doing it, but as part of my morals -- part of my relationship to those standards I hold dear -- I'm not going to do it.

I am _very_ cautious of folks looking at this state of affairs we have and saying something like "Capitalism and social well being have diverged. Therefore we must control the people more for their own good." I don't think it worked with drug policy and I don't think it will work with other things.

I don't have an easy answers. "Make stuff people want" is an especially powerful geis. This is something (I think) all of us are going to keep returning to.

Thanks for the thoughtful reply, Daniel.

I look at our economy like our public road/freeway system, we need clear signs and rules in order to have a sane system. Sure, we have traffic, but as anybody knows that has driven in other countries, we have a pretty good system here. I don't believe markets can regulate themselves, just the same way I don't believe roads would be safe if we took out all the traffic lights. We need cops to at least make an attempt to keep drunk drivers off the road. People seem to forget that's what government should do, provide clear rules for everybody to play by. And really, how much more business friendly can our government be, considering all the bailouts and tax loopholes that have happened?

Anyways, I apologize for going off-topic.

I gave your article some more thought last night, and I have to say, I strongly agree that avoiding failures causes a lot of harm. I have experienced countless times, leadership never admitting a mistake, when it really would have been better to do so, because then you know what the problem is, and fix it.

And, yes, it's not just leaders that do this, but they do set the tone for a company's culture. If my boss does not admit failures, why the hell should I?

I wish it would change, but I can see how admitting failure would affect investors. plus we're americans, americans hate losers.

look forward to your next post.

Norway's entire population is 4,768,212.

This is comparable to the population of Los Angeles city limits (not county which has 9.8 million).

It's not reasonable to compare the number of big start ups in Norway to those of the US as a whole.

That said, I can't think of any Norwegian software or consumer hardware startups. They do have a lot of companies investing in power generation and advanced process manufacturing of the sort that no longer exists in the US.

I do know of a large number of Swedish high tech software and consumer hardware firms.

A friend of mine just forwarded me your blog post. Nice. And while I do try to keep the self-promotion to a minimum, I thought you might really get a kick out of this:

If you want to succeed wildly, you have to open yourself up to the possibility of failing spectacularly.

Thanks Jason!

Looks like an interesting book. I appreciate your tracking us down and telling us about it.

Innovation and failure are two ends of the same spectrum that tends to be glossed over with pleasantries. Both require discomfort, wracked nerves, and a hell of a lot of hard work. But, as you allude to, they are intimately intertwined and nothing innovative emerges without some degree of failure along the way. The critical question is how to design a system to acknowledge and analyze failures and then incorporate lessons learned on the fly...

This isn't some sort of abstract concept- I'm interested in learning concrete examples of how to implement a culture that encourages failure. I run a speaker series called Founders @Fail for veteran entrepreneurs to share the lessons learned through failure. If you or any of your readers are interested in continuing the conversation offline, please join us:


Schuyler Brown


One thing I'd like to add to your point that "But to have more successes we must necessarily have more failures": not only do failures accompany success, but failures themselves are valuable. The problem is that culturally, "failure is waste effort" is the attitude that reigns. Systems that are setup to accept and encourage failure and extract value from failure will in the long run out-pace others who try to soft-step their way directly to success.


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This page contains a single entry by DanielBMarkham published on February 9, 2011 10:05 AM.

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Information you might find handy
(other sites I have worked on)

Recently I created a list of books that hackers recommend to each other -- what are the books super hackers use to help guide them form their own startups and make millions? hn-books might be a site you'd like to check out.
On the low-end of the spectrum, I realized that a lot of people have problems logging into Facebook, of all things. So I created a micro-site to help folks learn how to log-in correctly, and to share various funny pictures and such that folks might like to share with their friends. It's called (appropriately enough) facebook login help