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  • Writer's pictureStefanie Wilson

Luminair on Innovation, as covered by University of Queensland

Updated: Aug 31, 2023

Trailblazing business innovation isn’t always straightforward. It requires a willingness to take risks and the ability to learn from failure, which is where the concept of ‘failing fast’ comes into play.

The failing fast approach encourages businesses to test their ideas early and often. By taking this approach, they can quickly identify and address any issues, saving valuable time, money and resources.

Small-and-medium sized enterprises (SMEs) and large organisations alike – from Amazon to Netflix – have integrated failing fast into their day-to-day operations. In fact, Meta CEO Mark Zuckerberg once claimed that one of his company’s core values was to “move fast and break things”.

But how can leaders and teams adopt this approach without putting their businesses at risk? UQ researchers and industry experts share their research-backed and road-tested tips designed to help you master the art of failing fast to foster innovation.

Professor Martie-Louise Verreynne is the Associate Dean (Research) of UQ’s Faculty of Business, Economics and Law and an expert in innovation.

According to Professor Verreynne, researchers have been investigating the concept of ‘failing fast’ for years. It’s often associated with agile innovation, which hails from the world of software development.

“The failing fast methodology came in as a counterpoint to research around the ‘escalation of commitment’ – so, whether entrepreneurs stick with unsuccessful business ideas or products because of the money and time they’ve already invested,” Professor Verreynne said.

“Failing fast shows us that failing is acceptable, and we should embrace it. As a matter of fact, failure is an excellent way to learn and improve innovations.” - Professor Martie-Louise Verreynne

Australia’s national science agency CSIRO collaborates with industry, government and the research community – including UQ – to solve some of the nation’s biggest challenges. With a focus on innovative science and technology, the CSIRO team are no strangers to the art of failing fast.

Independent leadership coach, mentor and former CSIRO Program Manager – Researcher Programs Dr Jeri Childers noted that failing fast is helpful for businesses and startups wanting to innovate products or services in uncertain environments and emerging markets.

“Taking an idea from concept to commercialisation without involving customers and other stakeholders early in the process is a waste of valuable resources,” Dr Childers said.

“Failing fast allows you to problem-solve and co-design multiple high-value, low-cost solutions with your customers and partners.

“It’s also a way to build brand loyalty and early market adoption by key market segments.”

#1 Know your risk appetite

If failing fast to cultivate business innovation is your goal, knowing your risk appetite is essential.

“Innovative cultures are supported by a statement of risk appetite and policies that endorse a desirable amount of risk in daily operations,” Dr Childers said.

Dr Childers stressed the distinction between the risk appetite you might find at a startup versus a company that has been operating and scaling for longer, such as a large corporation.

"In the startup environment, you want a higher level of innovation and experimentation around your product, service or business model,” she said.

“But in the case of a large corporation, the board and executive design a risk appetite statement that helps all employees understand how much risk is tolerable – allowing them to innovate and fail fast at their level.

“Team members in new product development would have a different angle of looking at risk appetite compared to someone in finance, for instance.”

#2 Recruit team members with the right mindset

CEO of Luminair Pty Ltd Stefanie Wilson focuses on hiring team members motivated by curiosity and shared values.

Luminair is a certified B Corp company with alignment to the UN’s Sustainable Development Goals that works with government, business and industry to deliver ‘responsible prosperity’, future economy needs, and industry readiness for 2030, 2032 and 2050 targets.

The company doesn’t necessarily subscribe to the failing fast methodology. However, Wilson and her team have adopted a similar methodology that sees them transition through research, strategy and design sprints, guided by the ‘double diamond model’ for innovative solutions. Some elements of failing fast still apply.

“Your team should have the right mindset around any type of innovation, regardless of the model you use,” Wilson said.

“I’m selective with who I hire; I look for values-aligned people with a diverse perspective, a curiosity mindset, and an understanding that their individual skill sets are seated at the table for a reason.

“From a company perspective, I can’t afford groupthink.”

Dr Childers said surrounding yourself with team members who have an entrepreneurial or growth mindset is key.

“If you’re a startup, you want a co-founder with a complementary mindset to yours,” she said.

“You also want to recruit team members with diverse yet complementary mindsets aligned with entrepreneurship and innovation so you can build and scale your business.”

#3 Build a culture of innovation

UQ Master of Business Administration (MBA) alum and CEO of ResourceCo Energy Systems Henry Anning said creating a culture of innovation was fundamental to failing fast.

Anning uses failing fast techniques almost daily at ResourceCo, a resource recovery and recycling company that operates 25 manufacturing plants around Australia and Southeast Asia.

At each of those facilities, the ResourceCo team frequently trials new ideas and processes – from piloting different waste streams to making small tweaks to pieces of equipment.

“If your team members are stuck in their lane or don't feel they can raise ideas or test boundaries in a controlled way, you may never achieve real innovation,” he said.

“Put checks and balances in place so no one wastes too much time on harebrained ideas, but at least give them the freedom to make some out-there suggestions.

“You never know where it might go – it could be a harebrained idea today and core business in 5 years.”

Anning said not blaming other team members when an idea fails was also crucial.

“Failure doesn’t mean anyone did anything wrong,” he said.

“No result is still a result because everyone has learned something in the process.”

Professor Verreynne is on the same page, pointing out that some employees of large organisations may be reluctant to fail fast if they feel that failing will damage their reputation and career trajectory.

“Leaders must very deliberately create a safe space, so their employees know that being involved in failures won’t impede their careers,” she said.

“One way to do that is to build a culture where you celebrate clever failures – for example, by changing KPIs to challenge your employees to try new ideas and rewarding their subsequent successes and failures.

“Your people are more likely to buy in if their ‘failures’ are celebrated and uplifted rather than punished.”

#4 Nurture your people through success and failure

Wilson is also passionate about building supportive work environments to foster innovation.

What frustrates her most is when businesses practise failing fast but fail to nurture their team members throughout the process.

“With innovative approaches like failing fast, you’re dealing with humans – and they generally and innately don’t like to fail,” Wilson said.

“I believe it’s just as important to prepare your team for an alternative outcome or a continued journey as it is to prepare them for success.”

Wilson said she shares analogies with her team to lessen the stakes of innovation.

“I’ll tell them that we have, say, 7 identified opportunities for new products,” she said.

“We line them all up on the starting line of the racetrack, and it’s their role to ensure we run a good race.

“Some will cross the line faster than others simply because of the market conditions at that time, and there’s no issue with that.”

#5 Find the right balance

Although ‘fast’ is the operative word, Anning cautioned organisations against abandoning ideas too hastily.

“You need to find the right balance between failing fast and not giving up too quickly,” Anning said.

“Just because something fails the first time doesn't mean it will always fail.

“Make sure you take enough samples, conduct a big enough test, or trial different scenarios to see if there’s an outlying reason for why something didn't work.”

Similarly, Anning said leaders should draw on the experience of their team members, but they must be careful not to ‘block’ innovation as a result.

“You might have team members with 10, 20 or 30 years of industry experience who will tell you that something didn’t work when they tested it back then – but does that mean it won’t work today?” he said.

“There could be any number of reasons why a failure 10 years ago wouldn’t happen today. For example, maybe they used a different piece of equipment back then.”

#6 Avoid mediocrity at all costs

Leaders must ensure that a failing fast culture doesn’t lead to mediocrity, Dr Childers said.

“There’s a difference between learning from ‘failure’ or experimentation and not striving for excellence,” she said.

Professor Verreynne said ‘incremental innovation’ was an example of mediocrity that could arise from the failing fast approach.

“Quite often, if you’re forced into a really quick decision-making cycle, you don't have the opportunity to be creative – and creativity is essential for more radical innovation,” she said.

“In a way, the failing fast methodology can push us towards incremental innovation, where we’re only making small changes instead of pursuing the ‘big bang’ innovations that will move the organisation forward or help solve some of society’s biggest challenges.”

#7 Record your learnings

Professor Verreynne said entrepreneurs, SMEs and large organisations alike should keep records of their failing fast adventures.

“If you were involved in something that failed, but you’ve documented your learnings, you can revisit them later,” she said.

“You can then brainstorm solutions to address the problem in the future or develop new ideas that build on the original concept.”

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