CeBIT Conferences 2017 

28
Oct

How to innovate like a start-up: “Failing fast” for established businesses

How to innovate like a start-up: "Failing fast" for established businesses

Once a mantra of Silicon Valley tech start-ups, “Fail fast, fail often” has now become a success mantra for all businesses, tech or not.

The agile concept of "failing fast" is all about trying something new, getting quick feedback, and then rapidly adapting your plans. The aim is to create a culture of innovation while minimising risk: lessons are learned and mistakes get stopped early, before too much time and money is invested in them.

The benefits of failing fast are manifold:

  • Highlights new areas of opportunity for the business
  • Keeps organisations buoyant in the face of change
  • Speeds up time to market
  • Keeps the organisation ahead of the competition
  • Makes organisations more adaptable and agile
  • Creates a culture of curiosity, creativity and innovation
  • Better aligns your organisation to your customer’s needs

So far, so good. So why aren’t more organisations adapting a fail fast approach?

Why ‘fast fail’ cultures are hard for established businesses

While the Fail Fast approach is undoubtedly a powerful tool for growth and innovation, it can pose a challenge for established businesses: largely due to its origins in tech start-ups. (It didn't come from Silicon Valley for nothing!) Some of the challenges businesses face with Fail Fast are:

  • Lack of market understanding. Many firms are still coming to terms with how their markets have changed and what to do about it.
  • Fear of change. Maybe it’s because they have more to lose, but organisations’ fear of change seems to grow as they do. This can lead to an innovation paralysis that is fatal to the Fail Fast philosophy.
  • Lack of vision. Many established organisations find it hard to stay connected to the vision that burned so bright in their start-up days. Vision provides a vital part of the framework that innovation thrives within.
  • Scale and complexity – Like a road train compared to a vesper, larger, more complex organisations have a hard time changing direction. Large customer bases and siloed departments can all have a serious impact on an established firm’s ability to be agile.
  • Lack of customer understanding: Many organisations drift away from their customers as they grow, making it harder to understand their needs. Not only does this hamper innovation, it can also erode the feedback channels that are necessary for failing fast.

How established businesses can adopt a ‘fail fast’ approach: 9 points for success

1. Know when to pull the plug
Knowing when to pull the plug on an initiative can be the hardest thing. The key is to decide in advance what metrics constitute failure, and listen to your data: you'll know what to do and when.

2. Talk to your customers
Think you know what your customers want? Chances are you don’t. Get out from behind your desk and talk to them. Keep talking through prototypes and in-market research too. They’ll be your best gauge of whether your initiative is needed or not.

3. Test early
Don’t think you have to wait until the product is ready before you test: you don’t. Anything can be tested: a concept, a landing page, a prototype. As Adam Fridman from inc.om says, “Imagine you post a buy button and nobody clicks it, thank God you didn't build the product! If people do click it, tell them it's not available yet, would they like to be notified when it is?”

4. Make innovation everyone's business
Don’t establish an innovation department and think your job is done. Make sure innovation is encouraged and rewarded across all areas of the business: whether it’s IT, front of house, or HR. Make innovation everyone’s job, all the time. Even better, encourage different departments to work together to connect up business silos.

5. Stay on your toes
Failing fast means moving fast. Here’s where to start:

  • Start small: Identify small but impactful “no-brainer” initiatives that can be executed quickly and autonomously. If they’re a winner, roll them out at a larger scale.
  • Downscale your decision-making: Internal decision-making should be as swift and nimble as possible.
  • Take baby steps: An iterative approach to change makes it possible to make decisions in a short amount of time without taking unnecessary risks.
6. Take the sting out of failure
However you pitch it, nobody likes failure. But fear of failure can be crippling for individuals and organisations. When an idea doesn’t work, reframe it as a glitch, avoid blame, take the learnings and move on.

7. Build a strong vision
Like a good brief, a clearly communicated vision gives the necessary parameters to allow others to think creatively.

8. Focus on the big hitters
A long list of priorities can create disillusion, confusion and innovation fatigue. Create focus by reducing your goals to a short list of two or three. You can always add more as you go.

9. Empower your people
Autonomy and ownership are vital for creating a fast, agile environment where innovation can thrive. Speed things up by delegating authority down the chain of command, and watch innovation go through the roof.

You're there!

So you see, although fail fast cultures can be harder for established businesses to adopt, they are by no means impossible. Just a handful of small changes can put your business well on the road to agility and innovation, and all the customer satisfaction, competitive advantage and profitability that goes with it.

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