Once again, my regular news feed from The Financial Brand delivers an article that directly aligns with what I have taught bankers for many years; that is our fear of failure is a huge stumbling block for innovation. In an effort to innovate, mistakes must be an option. You may remember my blog post where I described the tagline I placed on the Thinking Room wall at FNBB, “Innovation Occurs When Failure is an Option”. I get asked, “Why would you put a tagline on the wall that includes the word failure”? For the specific reason that the financial services vertical is especially weighed down by the abhorrence of mistakes. To use a baseball analogy, bankers bunt for singles. Think about it, Innovation is like a baseball player who hits home runs. When a home run is hit, the crowd goes wild and it is always a positive event for the team. But the reality is that all the players who lead baseball in home runs also lead the league in strikeouts. And in baseball, it is accepted that this will occur. But in banking, if the rule is to NEVER strikeout, NEVER! then no one will swing for the fences. It is this very concept of being allowed to fail that encourages people to innovate. And I’m talking about all innovation, even small process innovations. If failure is not encouraged, much less rewarded, why would anyone stick their neck out and come up with a creative idea? Which brings me to the Financial Brand article, which you can read here – The Financial Brand Fear of Failure Hurts Innovation in Banking Jim Marous takes a similar position about the timidity of bank staffers to innovate when failure will be punished. But he goes on to state that not only should bankers stop punishing failure but to encourage it using the “Fail Fast, Fail Often” model. It should be noted that the “goal” is not failure, the goal is always to innovate, to succeed in making a process or services better. But failure, when executed properly, leads to learning, understanding, insight and ultimately to success. Those that fail and give up, receive none of the benefits that failure brings. Marous also describes banker’s hesitancy to produce “Creative Destruction”, where a new innovation cannibalizes an existing product or service. You can see this play out in financial services where bankers are hesitant to move forward with services that might eliminate the revenue stream associated with, say overdraft fees or implementing faster payment options that cannibalize wires. While there are studies that indicate that a fear of failure can be a positive in some situations, I believe that bank executives should examine the overall culture of the organization and ensure that there is a specific effort to encourage innovation and responsible risk taking across the entire enterprise. Here at FNBB, I am often referred to as “a disruptor”. It is not a derogatory term; it is used to indicate that I am challenging the status quo and getting people to think differently about the future of banking services. And yet, there are many ideas that I promote that are not gated into execution. And that’s OK. I don’t consider those ideas a “strikeout”. In fact, there mere fact of bringing ideas to the table and having a robust discussion of how it may (or may not) fit into the strategic goals of FNBB is the very point of my job as Chief Innovation Officer. A disruptor is not someone crashing the halls of the bank causing a wake of destruction. We are, after all, professionals. But a disruptor does provide steady pressure and encouragement for the entire enterprise to think about how they think and be bold enough to come up with ideas that can move the organization to better processes, better services. A home run hitter that averages .250 is considered to be an extremely valuable Major League Baseball player. If we get 3 ideas out of 10 to make it to be fully considered, that would be amazing. In fact, some studies suggest that it may be more like 1 idea out of 30. If that seems discouraging to you, then understand that it is our perseverance to keep coming up with ideas that ultimately will make the difference in how our organizations thrive in the coming years. And as a senior leader, you will be directly responsible for creating an environment where that will absolutely happen. Feel free to take this saying and plaster it in your training room wall in really big letters: Innovation Occurs When Failure is an Option! Get busy failing, but remember Fail Fast, Fail Often. And ensure that each failure leads to learning and insight to improve the next idea. Will you take up the challenge to encourage failure at your institution?