I was thinking about writing something on Expedia this morning, but I just saw the headline that Yahoo! has appointed a new CEO, and I saw an interesting quote attributed to her:

It’s the “3F” concept, or “fail-fast forward” — the idea that you engineer a company to fail in certain missions, to be resilient to failure, and to respond to it by overcoming quickly.

I was having a conversation with a colleague yesterday on how to best ensure big companies don’t lose their ability to innovate,  so seeing the above comment today made me think, as it did remind me a little of what we had been discussing. My point was that in big companies you tend to have 3 types of people

  1. Those who complain things move too slowly
  2. Those whose only interest is self-preservation and who try to force everything to move slowly
  3. Those who work out a way to take the best of being in a big organization, but without letting it slow them down

When I was younger I sometimes fell into the first category, but now I see  that if you really feel that way you will die from frustration in a large company and you should either get out, join your colleagues in group 2 and just sell out completely, or stop complaining and move into group 3.  Writing this I can’t help thinking of some text at the end of Ayn Rand’s preface to the 25th anniversary edition of her classic book The Fountainhead where she talks about the types of people she writes for. Unfortunately I can’t find the text on the web (at least with a quick search) but there is a good clip from the movie on youtube. Howard Roark was the type of person who would never survive in a large company, but at least he knew that.

Getting back to the new CEO of Yahoo and her thoughts on enabling innovation in a large company:

“So we started this thing called ‘fail-fast-forward,’ and the whole idea is, listen, failure is very acceptable. When it happens, make sure you identify it quickly, and hopefully it’s in a forward motion. And then start going again.”

In my opinion this is where many large companies lose out. There are huge projects, with big upfront investment or maybe the reputation of the entire company is at stake, or maybe it is a community product promised to a range of customers who are depending on it – in these cases moving too fast will almost certainly cause problems later.  Proper business cases and multiple sign-offs at the top level are crucial. But the problem many big companies run into is when they treat every initiative the same as the mega projects – this is what kills innovation – paralysis by analysis.

Fortunately I am now in a position where I get the benefits of working in a large company (eg. global presence, strong brand name, great infrastructure) but on a product that is still evolving at such a rapid rate that the early customers in production are having a big impact on the direction, and most importantly, enhancements are being built in such a way that if it isn’t the commercial success anticipated, it won’t matter in the overall scheme of things.  Eventually every product as it matures must be bought more into the mainstream, but knowing the right time to do this is never a 100% sure bet. This is one way in which senior management really add value – understanding that zero failure will almost certainly mean zero innovation, and determing an acceptable level of failure as a cost of growing the business.