Tom Kelley, the co-founder of IDEO - one of the world's leading design firms, has a great saying about how to learn and innovate effectively: "Fail early and often to succeed sooner." At IDEO, a great deal of experimentation and prototyping occurs in the design process. People try lots of new things in search of progress toward a great design. Unfortunately, most organizations have the wrong attitude toward failure. They treat all failures in the same manner -harshly. Managers often create environments where people live in fear of making the smallest of mistakes, and thus, employees become highly risk averse. Yet, without risk-taking, innovation will not take place.
Maxine Clark, founder and CEO of Build-a-Bear Workshop, has a refreshing take on how to encourage risk-taking and use mistakes to drive innovation. She has built an incredibly successful company, growing it to over $350 milllion in sales over the past decade. She has done so by delivering a world-class customer experience in her stores. In her book, Clark tells us the story of her first grade teacher, Mrs. Grace. Like many elementary school teachers, Mrs. Grace graded papers using a red pencil. However, unlike most of her colleagues, Mrs. Grace gave out a rather unorthodox award at the end of each week. She awarded a red pencil prize to the student who had made the most mistakes! Why? Mrs. Grace wanted her students engaged in the class discussion, trying to answer every question - no matter how challenging. As Clark writes, "She didn't want the fear of being wrong to keep us from taking chances. Her only rule was that we couldn't be rewarded for making the same mistake twice." That is the key - making sure that you emphasize the importance of learning from each mistake, so that they do not happen again.
Clark has applied her first grade teacher's approach at Build-a-Bear by creating a Red Pencil Award. She gives this prize to people who have made a mistake, but who have discovered a better way of doing business as a result of reflecting upon and learning from that mistake. Clark has it right when she says that managers should encourage their people to "experiment freely, and view every so-called mistake as one step closer to getting things just right." Of course, her first grade teacher had it right as well when she stressed that people would be held accountable if they made the same mistake repeatedly. Failing to learn is the bad behavior that managers should deem unacceptable.