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Many companies say that they strongly believe in and support innovative thinking, but that can be a double-edged sword. Yes, companies want to create new and interesting things that help to solve their customers’ problems. However, at the same time, many companies also don’t like to waste time and money putting effort into risky ideas that wind up failing. The problem with this is that innovating means trying new things, some of which will succeed and many of which will fail. If failing is frowned upon, how many people in that company are really going to want to try new things that may be seen as risky?

In his article, “To Increase Innovation, Take the Sting Out of Failure,” Doug Sundheim tells the story of a client who was trying to encourage his employees to get innovative and take more chances, but they didn’t seem to be doing that. As Sundheim was trying to help the client figure out why, he asked how the company treats failure. Sundiem says that his client “wasn’t sure how to answer the question. He hadn’t really ever considered it before. His first off-hand response was, ‘As something to be avoided.’ He immediately saw the inherent problems with his answer as soon as the words came out of his mouth.” This type of response is not uncommon among many large companies.

So, how do companies that want to be innovative smartly balance that with their larger business objectives that usually include making, not losing or wasting, money?

Define Smart Risks For The Company

In order to encourage employees to want to take chances and not worry about what negative consequences might happen if their idea fails, Ron Ashkenas and Lisa Bodell recommend that companies publicly talk about what they consider “smart risks” to be. The authors say that the companies that are better than others at creating innovation “distinguish the areas where risk is encouraged, and where it is not.” For example, they say that a company might tell their employees that they encourage them to take risks through the discovery phase to see if their ideas can pan out, but they prefer to take much less risk when it comes to execution. A definition like this encourages employees to explore ideas but lets them know that only the ideas that seem most feasible to execute may actually move forward. Ashkenas and Bodell say, “These guardrails define the ‘safe zone’ for innovation, and they should include specific parameters such as time (must show progress after x months) or financial impact (has the potential to generate xx revenue or costs no more than xxx).” By clearly defining where a company finds it’s acceptable for employees to take risks, and giving them permission to do so without fear of repercussion, it improves the chance that employees will start to take those risks.

Reward Smart Failures Just As You Would Successes

Despite the adage that when people fail they also learn from those failures, many companies still don’t acknowledge, or, heaven forbid, reward their employees for learning those lessons. This is another reason why they may not actually feel like they are inside a culture of innovation. While there may not always be repercussions for failing while trying new things, they still don’t always feel like their failure is welcome, no matter how much the company can learn from it. However, having a company acknowledge that trying new things and learning from them is still valuable “sends a powerful message about what sort of behavior is encouraged in your organization,” says Sundheim. He relays a story of the Indian conglomerate Tata who holds an awards ceremony every year to celebrate the company’s innovative successes, but also their best attempts that didn’t quite make it. They call the latter their “Dare To Try Award.” Celebrating their employees’ attempts to innovate, even if they failed, lets them know that trying new things truly is encouraged. Moreso if they learn from what they did. Sundheim says “The thoughtful recognition had changed peoples’ thinking about the value of taking a risk. And the increased smart risk taking had increased the volume of innovative ideas.

These are just two ways that companies can truly encourage their employees to come up with innovative ideas and encourage them to truly try to make them happen without the fear of what might happen if they don’t have outstanding success from their efforts. We’d love to hear about other ways that companies are encouraging their employees to take risks and innovate. If you have a good story of how your company is doing this, join our Intrapreneur Alliance Facebook Group and let us know in the comments under this article.