How to Inspire Innovation and Learn From Mistakes

When employees know something is going wrong -- but say nothing -- companies suffer. Remember the exploding Samsung Galaxy Note 7? Rushed to market, the phone had obvious flaws in design and manufacturing that should have halted production. The company issued a recall, then a recall of its replacement parts, eventually costing $6.2 billion.

Industry experts questioned -- or flat-out blamed -- Samsung's culture for the problem, believing the costly mistake could have been avoided if employees had called attention to the design problems and managers had listened to them.

"It will really call into question how they communicate problems, whether management is open to hearing things from the front line," said Willy C. Shih, a professor at the Harvard Business School, in The New York Times in 2017.

A Culture of Silence

Samsung's problems aren't unique to Samsung, of course. Any company with a command-and-control management structure can condition employees to hold their tongues. Whether intentionally or not, and whether due to fear of reprisal or limited means of communication, this leadership approach creates a culture of silence that almost invites disaster.

Those cultures are not uncommon. In 2016 in Germany, 31% of the workforce admitted they had not expressed serious concerns to their supervisor at least once during the last 12 months. And this figure includes one in five employees (20%) who said they were silent three or more times in that same period, although they felt that something was going wrong.

More recently, Gallup interviewed 80 business leaders and managers in the U.S. and EU, as well as 5,500 American and 4,000 European workers in late 2017 and early 2018 about experiences with agility in their companies. We learned that one in five (20%) German employees strongly agreed with the statement, "My company creates an environment where people can try, fail and learn from mistakes." Findings were similar in the U.S., where 21% of employees strongly agreed and, in France at 22%. This number is closer to one in four workers, in the UK (24%) and in Spain (26%).

Gallup research has found there are eight cultural factors that drive agility, one of which is innovation. If three-quarters of your workforce doesn't feel free to innovate, becoming truly agile is impossible.

Creating an Agile, Innovative Workplace Culture

Innovation is a trial-and-error process. Companies that quash discussion of the error half -- or reject innovation for fear of mistakes -- limit their agility and so increase their exposure to risk.

To stop incentivizing silence, companies need an innovation-positive culture that encourages constructive criticism.

Leaders are the keystone and should start by willingly admitting they don't know everything, and not just behind closed doors. The traditional rationale for command-and-control management doesn't hold up in today's workplace -- employees don't lose respect for leaders who recognize their own fallibility or share their mistakes. Employees lose respect for leaders who make bad decisions.

Employees gain respect for leaders who acknowledge their own limitations and who create conditions for success. In today's hyper-competitive business climate, success is related to agility and innovation.

Employees, therefore, need workplace cultures that encourage innovation -- despite the inherent risks -- and that provide a means to voice concerns. A formal platform on which to exchange lessons learned can be a big help. A curated message board, a semiannual team presentation or an agenda item in regular team meetings -- whatever the method, it should make employees feel like problems are dealt with constructively, not punitively.

Managers should then use the platform to reinforce the value of ideas that improve products, as well as ideas that attempt to improve products. As employees' fear of making mistakes decreases, they will become more daring and less passive.

Indeed, data from Germany in 2016 found that employees who said their managers treat them more as a partner than as an underling-- i.e., managers who eschew traditional command-and-control leadership -- voiced their concerns considerably more frequently. When workers who are treated like their manager's partner had grave concerns, 26% refrained from voicing their worries at least once compared with 47% of those whose bosses treat them like a subordinate.

It's important to note that supervisors must clearly define and communicate what constitutes an unacceptable mistake. In production, a mindset of zero tolerance for error must prevail -- some manufacturing and tech glitches can be literally lethal -- so every technical product must be perfect when delivered. Recalls are costly and damage the reputation of the company.

Managers' Communication Matters

Mercifully, unacceptable mistakes aren't common, and the value of a trial-and-error approach can be enormous. A company's speed to market, efficiency of process, and capacity for product improvement is often the difference between success and failure.

And even failures, which are to be expected, can be learning events if managers frame, document and communicate them properly.

To encourage employees to innovate and learn from the process, regardless of outcome, Gallup suggests managers clearly communicate that:

• Workers aren't punished for honest mistakes or ideas that don't work out.
• The company has a constructive, nonpunitive method for fixing problems.
• Workers are expected to try new ideas -- and occasionally fail -- as they respond to changing customer demands.

To drive the point home, managers should be role models of the innovation they promote. Explain the company's strategic obstacles so workers are aware of real problems. This knowledge points them toward opportunities. Reward good faith attempts. Be honest about the causes of organizational misfires and then learn from them.

And managers would do well to be transparent about stakeholders. There can be a thousand reasons leaders accept or reject an idea -- whether they're all good reasons is another story, and a matter of leadership team analytics -- but workers need to know where the red lines are.

When employees get shot down too many times for reasons they don't understand, they lose interest in innovation and lose faith in their managers. And when leaders receive too many ideas -- ideas they won't or can't use -- they, too, lose interest in innovation and it erodes faith in their managers. Encourage bold innovation ... but point it where it can be implemented and make a difference.

Managers are central to agile, innovative cultures, but leaders set the conditions that make agile work. By demanding courage, transparency, and innovation from managers and teams, such leaders adopt the test-and-learn mentality that leads to new processes, products and services.

These leaders reward problem-fixing, not problem-hiding. They move their companies forward in an increasingly competitive environment. And they don't find out about product failures from The Wall Street Journal -- their employees voice concerns before customers have to.

Most employees don't have that kind of leader, as the data show. The vast majority of workers in Europe and the U.S. are uncomfortable -- even scared about -- offering a critique or suggesting a new idea.

And as nervous as the workers are to speak up, their leaders should be far more concerned if they don't. To wit, Samsung has recently delayed the launch of another Galaxy product. Turns out test units of its new folding phone have been breaking, likely due to design and manufacturing flaws that should have been caught before test units were released. Just like last time. Failure to learn from failure can have serious consequences -- and cultures of silence can, too.