#30: Fear of failure

How visceral fear of failure prevents organizations from being innovative.

Greetings to readers old and new. This is yet another of Vaughn Tan’s weekly attempts to make sense of the state of not-knowing. The first issue explains the project; you can see all the issues here.

This is an early draft of my contribution to a Top Secret new project from the Yak Collective. I write here for organizations and their leaders … but similar fear of failure dynamics prevent individuals from transforming their careers.

Making something new and useful means learning how to do something that’s never been done before. The uncertainty of innovation means failure of some form is all but guaranteed in the course of doing innovation work.

Real, transformative innovation is difficult for big corporations because their leaders rarely commit to and support the kinds of innovation work that lead to real novelty and utility: work which exposes the corporation to the possibility of real failure. 

Underlying this is one of the many paradoxes of corporate success: as a corporation grows in size, its brand and reputation grow too—these are assets that are hard to build and easy to destroy. Big corporations are successful, and so have much more to lose from failure than small ones do.

All leaders know, cognitively, that innovation is important and that failure is a necessary part of innovation—and everyone fears failure.

A corporation’s leaders are responsible for protecting its assets, and the prospect of losing a trove of laboriously acquired, valuable assets intensifies their fear of failure. The bigger the corporation, the more valuable its brand and reputation. The more valuable the brand and reputation the corporation’s leaders must protect, the more intense and debilitating their fear of failure becomes.

Fear of failure is one of the key barriers to a big corporation’s leadership committing the resources of the corporation to the failure-prone pursuit of real, transformative innovations. This is how visceral fear of failure becomes an emotional obstacle to innovation, even when innovation is cognitively well-understood and acknowledged to be essential for survival and growth.  

The big corporation innovation problem is rooted not in cognition but in emotion.

To see how this plays out concretely, consider the example of a large, established advertising agency—let us call it X. 

In its early decades of life, X established itself as an industry leader by developing groundbreaking advertising campaigns and innovative strategies for identifying and reaching consumers for its clients. It gradually expanded into every major global market.

On the strength of its creative team and capacity for developing innovative advertising and marketing strategies, X built a stable and highly lucrative client portfolio of some of the world’s biggest companies in CPG, automotive, insurance, and other consumer-facing industries. 

However, X now faces a media and advertising market that has been transformed by the growing importance of e-commerce and social media. Smaller digital-first agencies are now highly competitive with X because they understand the constraints and freedoms these new media and advertising markets represent. These digital-first agencies have been able to develop innovative campaigns and marketing strategies that are less expensive to run and more effective than the best strategies X can come up with. 

So, in the last decade, X began first to lose parts of client accounts to smaller, much more nimble, digital-first agencies—then to lose whole accounts outright. X is increasingly losing its top creative and strategic talent to these upstart agencies too.

Why can’t X pivot effectively into digital? It’s not for lack of trying. 

When I talk to people working at X—the creatives and strategists on the ground actually developing campaign ideas—they say that the agency does come up with really innovative digital marketing campaign ideas and pitches. However, these rarely get approved by X’s leaders to be shown to clients in their undilutedly innovative form.

This is because X’s leadership perceive these innovation proposals as being too different from X’s tested playbook. These truly innovative campaign proposals might work—but they might also fail.

X’s clients expect success from expensive campaigns delivered by an established agency. X has an enormous reputation for success, so X’s senior leadership have a visceral fear of putting in front of clients campaigns that are innovative but which could fail dramatically.

Though X’s leaders tell their teams that innovation is essential to X’s survival, they cannot resist the urge—illogical and emotional—to gradually water down innovative campaign proposals during internal review. What ultimately gets shown to clients is reliable enough but dull.

As an established big agency, X’s biggest asset is its reputation for success among its portfolio of premium clients. This has become, paradoxically, a liability. X’s long-standing reputation creates in its leaders a visceral, debilitating fear of failure—and this prevents them from committing to the failure-prone work that might deliver transformative innovation to its clients. 

X’s leaders are like leaders in big corporations everywhere. They know they have to fail to innovate but their deep-seated, emotional fear of failure is irresistible. Against their own will, they water down and give short shrift to real innovation work because it is prone to failure—though they know it is this work that their businesses need most.

It was 28°C a few days ago when I went south of the river.

clearly, this town is too hot.


Find me on the web at www.vaughntan.org, on Twitter @vaughn_tan, on Instagram @vaughn.tan, or by email at <uncertaintymindset@vaughntan.org>.