“Fail fast” is a popular mantra at companies exploring digital innovation as they try a variety of experiments to see what sticks. Yet failure rarely offers useful business lessons, according to Jeanne Ross and Nils Fonstad, research scientists at the MIT Center for Information Systems Research. In fact, the pair found that this type of thinking often leads to projects that create little if any actual value for the company.
“Leaders often assume that failures will lead to valuable learning. Our data doesn’t support that assumption,” Ross and Fonstad wrote in a recent research briefing. The reason? Most failures have multiple, interrelated causes. “As a result,” they write, “it is difficult to extract a reliable summary of lessons learned.”
Instead of failing fast, companies should “learn fast” by designing initiatives to ensure learning, instead of hoping that failure leads to insight, Ross and Fonstad write. This type of thinking requires a cultural shift from organizational hierarchy to small, cross-functioning teams, and employees should be encouraged to test hypotheses by asking probing questions and admitting what they don’t know. “The challenge is to be much more purposeful about what you’re doing,” Fonstad said.
Ross and Fonstad are part of a team that has spent years studying leading companies undergoing digital transformation, including DBS Bank, LEGO, Toyota, Royal Philips, Audi, Deutsche Telekom, and Posten Norge (the Norwegian postal service), among other global organizations. Ross is the co-author of “Designed for Digital: How to Architect Your Business for Sustained Success.”
This recent research encountered companies attempting digital innovation without learning what customers want; understanding what they were capable of providing; or figuring out how to combine the two in ways that make business sense, Fonstad said. Those innovation efforts are at risk of ending up as “fondue sets” — nice to have, but adding little if any value to the organization, he said.