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The Innovation Paradox

The Success of Failure, the Failure of Success

About The Book

In The Innovation Paradox, Richard Farson and Ralph Keyes argue that failure has its upside, success its downside. Both are steps toward achievement, and the two extremes are not as distinct as we imagine. In today's business economy, it's not success or failure -- it's success and failure that lead to genuine innovation. History's great innovators, from Thomas Edison and Charles Kettering to Bill Gates and Jack Welch, saw failure as an important stepping-stone -- and with this groundbreaking book, you too can learn how to become more failure tolerant, more risk friendly, and therefore more innovative. Today's most prominent businesspeople agree that The Innovation Paradox has the formula for failure and success down to a science,
Make no mistake: If you're looking to reinvent yourself, your ideas, or your business model, this book is your sure-fire way to start.


Chapter 1: The Success-Failure Fallacy

One must be God to be able to distinguish successes from failures and not make mistakes.

-- Anton Chekov

A management consultant wrote a brief bio for his thirtieth college reunion. In it, he included the usual information: work, family, achievements. By most measures, this man was unusually successful. He was the father of thriving children, head of a respected think tank, and author of a best-selling book. After reviewing his paragraph, however, the consultant realized that it read more like a resumé than an honest report to his classmates. "Why would I write such a stilted, half-true account of my life for friends who knew me when?" he asked himself.

As a lark, the consultant decided to write a longer, more candid report about what his life had actually been like. It began:

Because I didn't receive a single "A" in college, I couldn't get into medical school. Instead, I worked as a lifeguard, but got fired at the end of the summer. My next job, selling advertising in the Yellow Pages, was interrupted by breaking my leg badly while skiing. This gave me three months to think about what to do with my life. Since I'd enjoyed my psychology courses in college, I thought I might try to become a school psychologist. So, I enrolled at UCLA to pick up psychology and education courses, but got kicked out of student teaching because I couldn't get along with my supervisor. Back to lifeguarding. Then I noticed that a prominent psychologist was giving a summer seminar at my alma mater, so I quit my job and enrolled. This experience was electrifying. The psychologist invited me to study with him at the University of Chicago. I was so intimidated by that most serious academic institution, however, that I put off going there for a year. Just before receiving my Ph.D. from Chicago, I was given a one-year fellowship on the Harvard Business School faculty. I left there at the end of the year with almost everyone mad at me.

The report went on like this for several paragraphs. Far from being a description of a smooth, upward trajectory, it portrayed a jagged course of life events. Failures mingled with successes, triumphs with setbacks. The consultant's full bio was a litany of opportunities seized, others blown, jobs taken, jobs lost, personal rebuffs, standing ovations, love affairs, marriage, divorce, remarriage, making Who's Who, getting fired, starting a think tank, making money, going broke, having a heart attack, learning piano, publishing books...and on and on. His failures led to successes and successes to failures. The two were so interdependent that it wasn't always clear which was which. So it is in most lives.

Tangled Line

Whose life can be located precisely on the map of success and failure? Sometimes, what seems to be a success at one point proves to be a failure at another. Premature promotions set one person up for a fall. Getting fired forces someone else to start a profitable business. A marriage made in heaven can't survive hellish periods. A rotten first marriage propels both partners into terrific second ones. Life-threatening illnesses can jolt survivors into living more fully. ("Best thing that ever happened to me!")

We like to think you either succeed or fail. Most situations are more ambiguous, however. So are most people. He's a success, we say. She's a failure. On whose terms? At what stage of life? How can we be so sure? Winston Churchill, after all, was considered by many to be a pompous failure until he became prime minister of Great Britain during World War II.

We're too quick to call someone or something a "success" or a "failure" when the jury is still out (which is true in most cases). These two are simply not that easy to sort out, untangle, tell apart. All they are is labels we hang on complex events trying to simplify them. What we usually end up doing is oversimplifying them. When we win and when we lose can be utterly dependent on circumstances, timing, the economy, even shifts in the public mood.

Remember Edmund Muskie? When he ran for vice president in 1968, Maine's Lincolnesque senator was considered the most impressive member of either ticket. Four years later, he was the leading candidate in the Democratic presidential primaries. Then, on a snowy day in New Hampshire, Muskie choked up while protesting press attacks on his wife. Televised images of the senator from Maine tearfully addressing a rally with snowflakes clinging to his eyebrows horrified American viewers. We didn't want a crybaby in the White House! That single incident scuttled Muskie's political career. He had "failed."

Fast forward twenty-eight years. Al Gore's campaign for president was floundering. The knock on him: He was too stiff, too wooden. Gore's feelings were stored in a lockbox. He never got misty-eyed, like -- well -- like Ed Muskie!

In a different time and place, Muskie's catastrophic failure might have been considered a roaring success. If Maine's senator had been campaigning in the age of Oprah, his tearful outburst might have won him plaudits. Muskie would then have been viewed as a devoted husband and passionate candidate who could communicate soulfully with the American public.

Failure and success can be utterly dependent on such intangibles. Luck happens: good and bad. The fabulously wealthy J. Paul Getty said his success formula was "Rise early, work late, strike oil." As Getty realized, success or failure in business can have little to do with anything done by design. On a given new project everything might seem to be in place, ducks all lined up, every detail checked out. Then, some unexpected meteor lands on that project. A well-designed SUV might be launched just as soaring gas prices revive demand for more fuel-efficient vehicles. A surefire best-seller gets published right after New York Times reporters go on strike, taking its best-seller list with them. Or things might break the other way. A chance encounter at a class reunion leads to a big contract. The unexpected failure of a competitor opens new markets for your product. If the inventor of a computer operating system called CP/M had accepted IBM's invitation to pitch his product rather than go on vacation, Bill Gates might be a small-time Seattle software merchant rather than the developer of MS-DOS (which IBM bought instead) and one of the world's richest men.

Now we all can agree that Gates did succeed, big time -- right? Well, not everyone. It took Mary Gates years to reach that conclusion. Long after Microsoft was flourishing, Mrs. Gates considered her son Bill a failure because he had dropped out of Harvard. Traditionally, that's what dropouts have been considered: failures. In the midst of an economic revolution led by college dropouts such as Bill Gates and Steve Jobs, however, this attitude is changing. As Mary Gates eventually conceded, leaving college -- even Harvard -- may simply reflect a shift in priorities.

Says Who?

Success, failure: Who's to say? These are much more ambiguous concepts than is suggested by success seminars, management texts, or performance reviews. The terms defy definition. Each one of us has a concept of success as unique as our fingerprints. Appearances aside, it's rare for anyone to achieve every measure of success as he or she may define that word. Despite what is written in annual reports and Christmas newsletters, unqualified success and clear-cut victories are rare. Most lives include few pure successes -- or failures. Most must be qualified one way or another. That's why people who appear successful seldom feel successful. They know that what others perceive as their success is more of a mixed bag and, to some extent, undeserved.

Take Maria Shriver. If ever a woman would seem to have it all, it's Shriver. She's wealthy, attractive, has a movie-star husband (Arnold Schwarzenegger), four healthy children, a thriving TV career, and best-selling books on her resumé. Yet Shriver continually uses the word failure when discussing herself. What stands out in her mind is a single setback: when the version of CBS Morning News she hosted was canceled. And her many successes? Shriver brushes them off as a result of having big hair, impressive teeth, and, especially, being John F. Kennedy's niece.

In most lives, successes and failures are as tangled as fishing line after a bad cast. Failure begets success followed by failure and success once again. When we look back on our lives, the parts that once seemed triumphant can pale in significance, while episodes that appeared trivial at the time now look crucial. Successes, we see in hindsight, made us complacent, while our setbacks pushed us.

Country singer Joe Diffie said that the best year of his life was the one in which he lost his job at a foundry, got divorced, totaled his pickup, and was audited by the IRS. With so little to lose, Diffie left Oklahoma for Nashville, where he eventually became the Country Music Association's male vocalist of the year. "If the foundry hadn't been shut down," Diffie later admitted, "I'd probably still be there today."

As Diffie discovered, failures sometimes pave the way for successes and vice versa. We do everything we can to court triumph and hold adversity at bay, then find that unavoidable setbacks blaze the trail for our significant successes. Misfortune forces us to discover new paths to achievement, which, in turn, produce more setbacks and subsequent achievements in an endless cycle.

This is true in the lives of people and businesses alike. In the 1950s, it was thought that the success of television would lead to radio's demise. Instead, radio reinvented itself as a talk-show drive-time medium and roared back stronger than ever. Far from wiping out the market for fresh produce, as was feared, frozen vegetables whetted our appetite for fresh ones in countless new varieties. Convenience foods fueled a renaissance in gourmet cooking. Fast food inspired a passion for leisurely dining. The impersonality of web commerce will almost surely spark a renaissance of person-to-person selling at brick-and-mortar stores.

Why Success Resembles Failure, and Vice Versa

Winning and losing, victory and defeat, success and failure -- all these concepts are far less clear than we usually imagine. Just when we think we know their meaning, it slips through our fingers. The harder we look at them, the fuzzier they become. Under close scrutiny, failure and success are hard to distinguish. One is the woof, the other the warp of a tightly woven fabric. Trying to tell them apart is like trying to identify the individual strands of an expensive rug.

What we usually regard as success and failure can be so similar that they defy distinction. Sometimes the two even resemble each other. They are like fraternal, if not identical, twins. That's not how they're usually perceived, of course. Success and failure have traditionally been treated as members of different tribes. One's a Viking, the other a Pygmy. They're opposites, like day and night, wet and dry, short and tall. Or so we like to think.

Westerners tend to think in absolutes. If it's hard, it can't be soft. If it's cold, it can't be hot. You're a winner or a loser. To succeed, you mustn't fail. Opposites, in other words, can't coexist. Eastern thought is more relaxed on this point. It embraces paradox: yin-yang, sweet and sour, the symbol of crisis embracing opportunity. Such concepts accept seeming contradictions as normal. In an increasingly complex world, we might be wise to follow the Eastern example.

There are compelling reasons to avoid making facile distinctions between success and failure. Assuming that they're opposites and, therefore, unrelated, is a fallacy. Nothing is so similar as opposites: love and hate, fear and longing, dread and desire. Laughing segues easily into crying. Scalding and freezing water sting in much the same way. Scratching an itch is not pain followed by pleasure, but both at once. Success and failure, too, have much in common. They don't necessarily duel to death. Sometimes, these two dance. One leads, the other follows, although it's not always apparent which is which, and who's doing what. Rather than coming from different tribes, success and failure are kin. Each contains genes of the other. The pollen of failure fertilizes the stamen of success. Together they produce hybrid vigor.

In simpler times, distinctions were easier to make. Gender roles were clear: Men held jobs, women kept house. Businesses with strong bottom lines were successful. Those that lost money were failures. Today, however, companies are judged as much on future prospects as they are on current performance. Profitability isn't always equated with success. Even stable corporations with solid profit-and-loss statements may be seen by investors as failures in the making. Today's hot company is tomorrow's iceberg. Overnight, fickle consumers turn their backs on products they had made into big hits. Word processing programs that were state of the art just a few years ago -- XyWrite, WordStar, DisplayWrite -- are museum pieces today. Hayes Modems set an industry standard (Hayes Compatible), then disappeared. After defining a fashion genre, Starter jackets went bankrupt. Success is a moving target, as are its symbols. What stood for success yesterday may represent failure today, and vice versa.

Can you imagine Steve Jobs and Stephen Wozniak taking a break to read Dress for Success while wiring the first Apple computer? Try to picture Bill Gates consulting the book Success! when launching Microsoft. Michael Korda's 1977 book featured drawings that illustrated do's and don'ts for conveying the image of a winner. One pictured The Loser's Jacket Pocket. This pocket held three pens and a glasses case. The nerd look, in other words. At the very time that his readers were studying how to avoid looking like a loser, Korda's loser look was common among those who eventually enjoyed the most success of all -- on the author's own terms. A company like Microsoft was chockablock with employees who, to all appearances, were hopeless losers. A 1978 picture of Microsoft's eleven scruffy founders that's posted on the Internet is labeled, "Would you have invested?"

In a rapidly changing business environment, it's futile to try to stay abreast of symbols of success: the suits, ties, shoes, watch, pen, desk, and corner office that make one appear successful. Some of our most dynamic companies and those who work there shun those symbols. Yesterday's notions of success and failure have gone the way of gray flannel suits. In today's business climate, the concept of success has become vague, complicated, even contradictory. Measures of success and failure are more ambiguous than ever, part of the broader complexity of a global, digital, online economy.

To cope with this economy don't flee from its complexity; embrace it. In the world to come, we will repeatedly face fluid, ambiguous, even paradoxical, situations. Wisdom consists of realizing that every seeming paradox, all apparent contradictions, can't be resolved. Some even contain seeds of necessary change.

Many paradoxical notions are already floating about today's business world: Grow your business by destroying your business; to get big, think small; increase your share of markets by ignoring the concept of market share. We would add: Manage success and failure by not making clear distinctions between the two. How? Rather than trying to hang a label on every act -- one reading SUCCESS or FAILURE -- recognize that most situations contain elements of each. It's not success or failure but success and failure. When it comes to this issue, both/and is a far more useful concept than either/or. We can't cleave these two so cleanly, and shouldn't try. Using success and failure as a yardstick limits our ability to create, innovate, and take risks, which is the only way to stay afloat in the emerging economy.

Failure Pride

At the cutting edge of today's economy, creative minds have already embraced the symbiotic nature of success and failure. A more relaxed attitude toward both is routine among innovators throughout the country. Failure, they say, is "a step on the road to success." Some consider setbacks a badge of honor, unmistakable proof that they're bold risk takers. Far from hiding their blunders, they brag about them.

Attitudes toward success and failure are a fault line dividing generations. For any number of reasons, younger cohorts find the prospect of going belly up less daunting than their predecessors did. Partly, it's simply that they have less to lose by taking chances. Partly it's because they've known only affluence (the Depression to them is the subject of black-and-white documentaries on public television). It's also due to an attitude shift, however. These new workers realize -- as a few thoughtful people always have -- that pursuing success is like chasing the horizon, and that failure is an integral part of an interesting life.

Organizations that don't accommodate this shift in attitude risk losing some of their best, most innovative employees. Trying to retain them with the usual lures of salary, benefits, and perks won't work. Tweaking compensation packages accomplishes little when it comes to attracting and retaining innovators. This hardly means they don't care about money. Symbolically, it's terribly important as a way of keeping score. Money keeps you in the game, but it's the game that matters, not income as such. They would rather be given challenging assignments than get paid a premium to do routine tasks well.

Consider what so many younger employees do for relaxation: climb rocks, raft rivers, bike mountains, surf waves, trek in distant locales. In such activities, the risk of wiping out is a large part of the appeal. At work, they disdain "success" for the same reason that they go bungee jumping: as a flight away from security and toward adventure. So many come from sheltered backgrounds that the prospect of excitement entices them more than the security of a good salary. Stock options get their attention better than pension plans do. You might say they're starved for daring, suffering from risk hunger. It's no coincidence that their leisure activities stress challenge and sneer at luxury.

Winning and losing isn't what they're all about; intensity is. Activities such as hang gliding and snowboarding don't have "winners" or "losers." All are completely captivating. If the game isn't 100 percent engaging, their devotees want to know, why play at all? Did I succeed while playing? Did I fail? Who cares? What's your point?

History's real elite has always considered the distinction between winning and losing essentially beside the point. When confronting triumph or disaster, said Rudyard Kipling, they "treat these two impostors just the same." During discussions with CEOs of thriving companies, the terms success and failure rarely come up. Those who are fully engaged in life and consumed by what they're doing seldom stop to consider whether they're headed toward a win or a loss. Pursuing victory and avoiding defeat is not what the highest achievers are about. They're hunting for far bigger game.

Copyright © 2002 by Richard Farson and Ralph Keyes

About The Authors

Dr. Richard Farson has led several organizations noted for innovative programs. Farson helped found the Western Behavioral Sciences Institute in 1958 and remains its president. In this capacity he directs its International Leadership Forum, an Internet-based think tank that brings influential leaders together to consider critical policy issues. A University of Chicago Ph.D. in psychology, Farson has been a Naval officer, college dean, research director, organizational consultant, and a member of the Human Relations Faculty of the Harvard Business School. He is the author of several books, including the critically acclaimed Management of the Absurd, now published in 11 languages. He lives in La Jolla, California.

Ralph Keyes is an author, speaker, teacher, and author of sixteen books focusing on numerous topics. His bestseller, Is There Life After High School?, is a Broadway musical that is still being produced.

Product Details

  • Publisher: Free Press (July 2, 2003)
  • Length: 144 pages
  • ISBN13: 9780743225939

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Raves and Reviews

Tom Peters I'm furious with Richard Farson and Ralph Keyes! They've written the book I always wanted to write.
This is the best management book I've read since Farson's last one, and doubtless the best I'll read until his next one. He is the master. Move over Drucker.

Richard Pollak The Nation A welcome antidote to the numbing conventional wisdom about what constitutes corporate success and failure. It shows how to make the business environment both vital and humane.

Michael Murphy Author of Golf in the Kingdom Promises to become a classic in the genre of modern wisdom literature.

Jane Alexander Actress, author, and former Chairman, National Endowment for the Arts The authors make a clear case for understanding that failing precedes almost all great wins in our society....A valuable book for just about anyone in our competitive world.

Harlan Cleveland President Emeritus, World Academy of Art and Science Truth always seems to come in small paradoxical packages. This [one]...reveals the fusion of opposites as the essence of truth.

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