Fail fast, but learn quicker: How to take chances without risking tech disasters

Taking calculated risks is a key part of using technology for business advantage: but how do tech leaders try new stuff without risking everything?
Written by Mark Samuels, Contributor
Tech leaders must learn how to take chances without risking disaster.
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CIOs are often encouraged to fail fast. This kind of experimentation, so the theory goes, leads to the kinds of solutions to intractable business challenges that can provide the rest of organisation with a competitive advantage.

But there is a problem with the concept in practice. Former CIO turned digital advisor Ian Cohen says the idea of 'failing fast' is better suited to venture capitalists backing startups, rather than CIOs searching for great new ideas.

"Venture capitalists talk about finding unicorns, but they don't plough all their financial efforts into one place," says Cohen. "They know when the going is good, but they must also back other activities, some of which will fail. They have to spread their risk."

IT leaders, therefore, need a more nuanced approach to experimentation. And Cohen says the concept of 'succeeding fast and learning fast' should resonate strongly with CIOs. "Failing fast without learning is absolutely useless," he says. "There's much more to the process than just throwing money at something and thinking you can afford to fail quickly."

Research from analyst Gartner suggests CIOs around the globe continue to face tight financial constraints. IT leaders in the US report an IT budget increase of 0.9 per cent for 2015, which is slightly below the global average of 1.1 per cent. In the UK and Ireland, CIOs expect to increase IT budgets by 1.4 per cent through the current year.

The continued focus on cash control leads Tullow Oil CIO Andrew Marks to agree with Cohen and to suggest that 'failing fast' might be a false narrative for IT leaders. "You want to assess the likelihood of failure - but, let's be honest, it's an expensive business," he says.

Rather than wasting your own company's money, Marks encourages his peers to learn from others that have failed. "Use this knowledge and approach your own experiments with a plan," he says. "Be willing to write off the costs associated to your experiments. But, if you do, be prepared to use that data in other places."

Marks encourages his executive peers who are interested in experimentation to consider the use of pilot projects. If a CIO runs a prototype, Marks says he or she must make sure the project has a clear beginning and an evaluation process at the end.

"Ensure you have a deliverable in terms of experience and lessons going forwards," he says. "The prototype might cost your business £50,000, but you won't have spent the £500,000 the full project would have cost, and you'll have learnt some valuable lessons along the way. "

So, how else can CIOs encourage experimentation and foster innovation? Five IT leaders suggest their best practice tips for developing creative solutions to key business challenges.

1. Present proposals with lean principles

David Allison, head of business systems at Aggregate Industries, says CIOs looking to get the green light for new projects must find evidence for likely success. He says that, with many projects now being digital initiatives, the speed of deployment and competitor differentiation are likely to be key. "I would expect tangible evidence for project justification in the form of prototyping and feedback," says Allison.

"But never 'fudge' the benefits - this can come back to haunt you. Instead, look to present project proposals with lean, startup principles, with clear progress indicators, small initial investment and plenty of 'get outs' up front. There is nothing wrong with failing, so long as you fail fast, know why and learn accordingly."

2. Empower people by pushing decision making downwards

Mike Williams is software and IT director at water management specialist i2O, a firm that creates state-of-the-art solutions to the challenge of leakage in global water distribution systems. He says experimentation relies on a great working culture. "You must support learning through experience, some of which will be related to failing," says Williams.

"If you can support inquisition within the context of your own business, you will develop a healthy approach to experimentation. Look to self-empowerment, push decision making downwards and give people the power to choose. Make your people empowered and they won't be afraid to fail, and will discuss opportunities with their peers."

3. Sprinkle fairy dust and let people think differently

Sarah Flannigan, CIO at the National Trust, recognises how CIOs can struggle to get the attention of the top table. An experienced business leader who has worked in leadership roles across many functions, Flannigan says great CIOs encourage their staff to embrace risk. "It's important to inject energy and I like making people think differently," she says.

"You can read all the standard books on how to lead change but there's actually something crucial about sprinkling fairy dust - you have to think creatively and allow people to express their feelings. Great CIOs have indistinguishable qualities that allow them to think and then move beyond the IT leadership role."

4. Help line-of-business executives to help themselves

Chris Chandler, head of the CIO practice at recruitment specialist La Fosse Associates, gets to work with a lot of different IT leaders across a broad range of sectors. His experiences lead him to conclude that best CIOs strive for creativity - and they use these creative solutions to help executives across the rest of the organisation to lead business transformation.

"If you're not innovating, you're missing out," says Chandler. "Show the rest of the business, and your executive peers in particular, how you can deliver change. CIOs should help their line of business peers to make the most of new technology, rather than attempting to control their use of IT via a parent/child relationship."

5. Don't discount the contribution of traditional vendor partners

Doug May, regional IT manager for aircraft manufacturing specialist Messier-Bugatti-Dowty, says IT leaders looking to try something different can reach out to small, innovative businesses. But, sometimes, great solutions to organisational challenges will still come from more traditional sources.

"If something doesn't go well, move on," he says. "Try things and find a partner, either internal or external, that fits with you and your objectives. Look at how important the requirement is and, once you understand this, you can identify how far you can look for an alternative vendor. If the requirement is critical, then a startup may not be the best match."

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