Building a culture of experimentation:
Embracing small failures for big gains

March 05, 2024

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The saying “innovate or die” might be a cliché, but companies that don’t change and evolve will invariably suffer. Of course, trying new things can be difficult or even scary, especially if your organization punishes failure. What’s needed is a mindset change—one that embraces calculated risks and gives employees permission to learn through failure.

This change starts by rethinking innovation as a series of small experiments in the pursuit of big gains. To instill this in your culture, leaders need to understand the problems they face, how to break those problems down, and how to help employees be excited about experimentation rather than fearful.

Identifying the right problems to solve

It’s essential for organizations to identify and address the right problems before diving into solutions, says Stephanie Shine, strategy principal at Kin + Carta. Encourage teams to get beneath the surface and understand why these problems exist—and what your solutions would accomplish. “If someone comes to us and says, ‘We need to build this app,’ I’m going to push a little bit and start to ask why,” Shine says. “You can get deeper into what’s really broken or has friction that needs to be addressed.”

Successful experimentation invariably requires data to identify the specific problems and inform effective decision-making.

“When people are talking about digital transformation, they’re really talking about decision science,"

Shine claims. “What data do they already have? Or what data do they need to gather to improve the problems that they’re seeing in their organization on a daily basis?”

Look for low-risk tests

Big problems can feel insurmountable, which makes innovation difficult to imagine, much less fund. Break complex problems into smaller tasks, or experiments, so your employees can home in on specific aspects and test foundational hypotheses. “You have to challenge yourself to see if there’s an opportunity to realize value upfront,” says Josh McNally, FinServ Portfolio Delivery Partner at Kin + Carta. “If you can create value based on smaller chunks and you can realize that value sooner, than you should.”

McNally highlights the significance of iteration in conjunction with agile frameworks, as quick iterations reduce the impact of failure and allow for continuous improvement. Teams can quickly course-correct before they get too far afield.

Josh Linkner, the New York Times best-selling author of Big Little Breakthroughs, recommends keeping what he calls a “to test” list next to your “to do” list. “Anytime some idea pops in your head, big, small, ugly, weird, crazy … it doesn't matter. Stick it on the list. It doesn't hurt. It doesn't cost any money. And just the mere existence of the list will boost your creative output, because now it's front and center. You're thinking about it all the time.”

This technique becomes especially powerful once you open it up to your team, he says. “Let everybody add to the “to test” list at the weekly staff meeting. It will absolutely drive business commercial value and it will drive intrinsic human value.”

Engaging employees and fostering collaboration

Employees need a signal that it’s OK for them to take reasonable risks and even fail. Without that support, they’ll avoid experimenting because it doesn’t feel safe and familiar. “How leaders show up impacts everybody else. Employees need to feel psychologically safe to experiment… and fail. Look for ways to enable experimentation, and look even harder at your response when things go wrong,” McNally says.

Leaders can model this behavior with open communication and transparency. When they discuss their experiences with trying new things (and occasionally failing), employees feel like they have permission to propose ideas and take ownership of the results. As teams become more comfortable taking chances, silos break down, and people begin collaborating across functions. Suddenly, that culture of experimentation enters into view.

Karim Nehdi, CEO of Herrmann International, the creator of the Whole Brain® Thinking model and HBDI® assessments based on it, emphasizes that building a culture of experimentation requires creating psychological safety, which doesn’t happen overnight.

"Psychological safety is the result of many small interactions in which a leader has shown an openness to viewing a situation from somebody else's perspective, of not immediately judging something as right or wrong, but with an openness to experimentation or an openness to a person solving the problem through their own lens and learning something."

Gamifying experimentation and innovation

An authentic and playful environment can further encourage employees to explore new ideas and take risks. Gamification is one way for organizations to make experimentation more enjoyable, motivating, and rewarding.

Hackathons and innovation challenges can help to gamify experimentation. These events provide a structured platform for employees to come together and work on creative projects or solve specific problems. While gamification can be fun, make sure it ties back to project and company goals. "You have to make sure that you as leadership are taking those ideas to production or finding a way to create value within the organization,” McNally says.

Again, leaders should set the example and celebrate colleagues who experiment. "How do your leaders show up?” McNally adds. “How are they exuding that playfulness themselves so that other people know they can mimic it and go do that within the organization?" He urges leaders to cultivate cultures where employees look forward to showing up. "I want people to feel like they don't go to work,” he adds. “They just do what they love, and then they get paid for it."