Project Management Institute

The upside of failure

R. Gopalakrishnan, Tata Group, Mumbai, India

R. Gopalakrishnan, Tata Group, Mumbai, India

If they want to retain their edge, companies have to be willing to stumble occasionally.

BY SARAH FISTER GALE * PHOTO BY GURU DUTT

“Be innovative—just don't fail.”

Those are the marching orders executives love to hand out to their project managers. But can a team take risks and try new things while steering clear of even the slightest whiff of disappointment?

The answer is no. Failure is a part of the process. If a company is trying something that's never been done before, chances are pretty good it will crash and burn every now and then.

“Failure is a necessary evil of innovation,” says Jerry Manas, PMP, senior writer and editor at Planview, a portfolio management software organization in Feasterville, Pennsylvania, USA.

“For every Gmail, there are Gnotes and Google Buzz. Those were considered failures,” says Mr. Manas, author of Napoleon on Project Management: Timeless Lessons in Planning, Execution, and Leadership [Thomas Nelson, 2006].

The best way to transform a bleeding-edge concept into a viable business strategy that lets a company stake its spot as a true leader is to acknowledge that not everything will pan out.

And the push to innovation can't come to a screeching halt when a company dreams up a game-changing product or service. Too many organizations launch revolutionary projects and then shun risk once they make their mark. Yet in the process, they sacrifice their leadership position. “More adventurous companies that aren't afraid to take those risks do something innovative and pass them by,” Mr. Manas says.

And those companies that stay safely on the sidelines pay the price. “The corporate graveyard is full of companies that never took a risk, experimented with new ideas or adapted to change,” he says.

CELEBRATING FAILURE

Taking the acceptance of failure to new heights, Tata Sons, the primary holding company of Tata Group in Mumbai, India, actually rewards project failures at a formal annual banquet. The company had always celebrated success stories, but three years ago it added an award for the three best unsuccessful innovations in the company.

“Celebrating failure is our way of telling people we want them to try new things, and if they make good, honest efforts and fail, that's okay,” says R. Gopalakrishnan, the company's executive director.

It took a while to get buy-in from employees, though. The first year, event organizers received only 12 applications, but this year there were more than 200. Each application represents a project team that set out to accomplish something but failed. “That's more than 1,000 people who got over their inhibitions and took a risk,” Mr. Gopalakrishnan says.

In 2009, two of the winning teams worked on the Tata Nano, the revolutionary low-cost car aimed at the Indian market. One team focused on plastic composite doors to help reduce the car's weight; the other on a gear shift that used micro-sized gear teeth to transmit power. The smaller teeth cost less to manufacture, which would help bring down the car's price.

imgThe best way to transform a bleeding-edge concept into a viable business strategy that lets a company stake its spot as a true leader is to acknowledge that not everything will pan out.

Both projects ultimately failed: The doors were too costly to manufacture, and the gear shift team ran into technical problems.

“But they were good ideas,” Mr. Gopalakrishnan says. “They just haven't worked yet.”

As part of the failure award process, the teams must explain what they were trying to accomplish and what went wrong. The interviews are recorded, with the results published in a book and shared as case studies open to the public on the Tata website.

“We want the message spread wide that even though these projects didn't succeed, they weren't mistakes,” Mr. Gopalakrishnan says. “By sharing these stories we hope to eliminate inhibitions that others might have toward trying something new.”

When failures occur, they shouldn't be hidden away. It may not be pretty, but armed with that information, team members won't struggle nearly as much when it comes to launch another new project to deliver the next big thing.

Like Tata, Softtek, a global IT services firm, maintains extensive documentation on its past projects—even the ones that didn't quite deliver.

“Information about the most innovative projects in the company is in that database, including who started it, who championed it, what we tried, what we accomplished and what didn't work,” says Luis Roberto Cuellar, head of the process improvement and compliance group at Softtek, Monterrey, México. “And whenever we start a new project, the first thing we do is go to that database to see what's been done before.”

Having that information in one place and encouraging teams to access it helps them avoid making the same mistakes over and over again. It also creates a network among team members to talk about what they've accomplished and what they'd do differently the next time.

img

Information about the most innovative projects in the company is in [a] database, including who started it, who championed it, what we tried, what we accomplished and what didn't work.

—Luis Roberto Cuellar, Softtek, Monterrey, México

QUICK WINS

Unencumbered by layers of bureaucracy, smaller upstarts are often more willing to push the boundaries and bump off the established leaders, says Shane McWilliams, PMP, Austin, Texas, USA-based associate director of The Knot Inc. That said, there's also less room—and less money—to offset failures.

“You view risk a lot differently at a small company,” says Mr. McWilliams, who previously worked as lead program manager at global IT giant Dell. “At Dell, the business was large enough that we could take big risks because we had a financial foundation to work from. But here at The Knot, if we have a big miss, it can have a pretty direct impact on the bottom line.”

img

Celebrating failure is our way of telling people we want them to try new things, and if they make good, honest efforts and fail, that's okay.

—R. Gopalakrishnan

That forces his team to adapt its risk-management strategies. The company relies on frequent smaller projects to deliver innovation while minimizing risk. For example, The Knot added functionality to its website so brides can review vendors and vendors can respond.

At the same time, the company also pursues one or two larger projects each year. It recently launched a project to create a service that allows users to register at multiple stores from one online location, and for the stores to automatically update the database when gifts are purchased. While these bigger projects may prove to offer great rewards, they also present greater dangers.

img

The corporate graveyard is full of companies that never took a risk, experimented with new ideas or adapted to change.

—Jerry Manas, PMP, Planview, Feasterville, Pennsylvania, USA

img

imgREAD MORE ABOUT

THE BENEFITS OF FAILURE

IN VOICES ON PROJECT

MANAGEMENT ON PAGE 56.

By launching lots of little projects and only a few large ones, Mr. McWilliams' team members spread the risk while continuing to deliver new solutions.

To further mitigate the risks of a failed project, the team relies on agile methods. Projects rarely last more than a couple of months, and every two weeks the team brings a finished prototype for beta testing. “We deliver real functionality at the end of each sprint, and if something's not right, we get that feedback right away,” he says.

Armed with a steady stream of commentary, his team can adjust the project plan by devoting time and money to fixing failures—without being scared away from trying cutting-edge ideas.

On a recent website interface upgrade project, for example, the review process revealed that vendors were getting stuck at what should have been a trivial point in the workflow. With that feedback, the development team altered that step.

“If you wait 18 months to show your customers what you are working on, you may not discover that you have a significant pothole until the end of the project,” he says. “We may still find problems at the end of our projects, but instead of taking a fiscal quarter to fix, they take a few days.”

SELLING FAILURE

One of the major benefits of a corporate culture that accommodates failure is the chance to try out truly bleeding-edge concepts. And those are what can bring a company to the top.

Yet while pursuing a slew of innovative project ideas sounds good in theory, there's rarely enough time or budget to go after every one, especially when clients are involved, Mr. Cuellar says. That means project managers have to work extra-hard to sell the potential windfall that can result from taking chances.

“If you go to a customer and say, ‘We're going try some new things,’ they get nervous,” he says.

But if a project manager is up-front about both the possible risks and benefits of trying—and occasionally failing—stakeholders are more likely to get on board.

“It helps to have the customer involved, and to be open about what you are trying to do and what you hope to accomplish,” he says.

To secure buy-in across the board, companies should clearly identify how project teams should approach innovation, how they are expected to set goals, how they should report progress—and what steps they'll take to learn from their failures.

Only then will teams be able to consistently turn negatives into positives. PM

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK OCTOBER 2010 WWW.PMI.ORG
OCTOBER 2010 PM NETWORK

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