Last week, I had 3 conversations with 3 different companies.  And each had a complaint about the same group of people: lawyers.

If you think about it, innovators and lawyers have completely opposite objectives.

Innovators want to grow the business.  They believe that risk and failure are a natural part of the innovation process. Their mantra is “expansion.”

Lawyers, on the other hand, want to guard the business.  Their objective is to minimize risk and avoid failure.  Their mantra is “protection.”

But the issue isn’t really lawyers versus innovators.  The issue is how to balance an organization’s need to protect the business while enabling it to expand at the same time.

In my previous blog entry, I discussed how to redefine failure. The model proposed was to treat everything like an experiment.  While using this mindset, failure only occurs when the experiment does not give you the feedback you require.

However, sometimes even experiences can give you false positives.  That is, the experiment tells you a new product, service or market is a good idea, yet in the end it proves to be a total flop.

In those situations, you have a good ol’ fashioned failure on your hand.  What do you do then? Beat up the people involved?

I was having a conversation with the former head of innovation for a giant retailer.  In their quest for big successes, they had some colossal failures. Instead of chastising the people involved with the failed venture, they celebrated. They held a massive funeral.  There was even a coffin in which the project (not the project team) was buried.  In my mind I can imagine a New Orleans style funeral with music.

Several years back, Intuit, decided to target a younger population by linking tax filing with hip-hop.  They made large marketing investments and created partnerships with companies like Expedia and Best Buy.  But in the end, their marketing effort proved unsuccessful.  They attracted very few new customers and killed the program.

How did they handle the failure? According to Business Week…

“The team that developed the campaign documented its insights, such as the fact that Gen Yers don’t visit destination Web sites that feel too much like advertising. Then, on a stage…in front of some 200 Intuit marketers, the team received an award from Intuit Chairman Scott Cook. ‘It’s only a failure if we fail to get the learning,’ says Cook.”

Successful companies don’t punish failure.  They don’t necessarily celebrate them either.  But there should be serious consequences if…

• You try to sweep your failure under the rug
• You try to blame someone else for your failure
• You don’t learn from your failure and as a result make the same mistakes again
• You create a colossal failure without first doing enough due diligence, often in the form of experiments

The point is not to glorify failure.  Although failures can give you useful input, success can do the same, at a much lower price.  But if you do fail, be sure to deal it head on.  Learn from the experience.

Or as Reverend Lawrence G. Lovasik once said, “Any fool can try to defend his mistakes – and most fools do – but it gives one a feeling of nobility to admit one’s mistakes. By fighting, you never get enough, but by yielding, you get more than you expected.”