We have a lot of interactions with CMs (Contract Manufacturers). These companies are excellent—they can do ten thousand things and not make a single mistake. Their business must work this way to stay competitive.
Product development, on the other hand, is different. In product development, you are lucky if you do ten things and get one right. For example, I just spent many hours researching a dozen Bluetooth UCs, and only one was chosen to be included in the product. I got one right out of twelve attempts.
Some would say this is an unfair comparison—and that is precisely my point. You cannot compare product development to other business functions by how many things are successfully done. Different business functions are mainly doing the same thing repeatedly. Product development is, by definition, making something for the first time.
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This has implications for company culture. In some business functions, “failure is not an option” can be used to amplify consistency, adherence to processes, and avoidance of risk. In a product development environment, “failure is not an option” will reduce creativity and stifle decision making, thus, increasing cost and time to market.
For product development, it is crucial to provide a culture where “mistakes” are understood as being part of the job and as part of the processes of achieving the goal—much like “no” is referred to in sales as just something necessary to get to “yes.”
However, this does not mean that teams should not be held accountable. You do not want the idea of permissible failure to deteriorate into systemic apathy for results. Insist on “corrective action” to keep teams improving and learning from these mistakes. Whenever there are less than the expected results, the team must determine what went wrong, why it went wrong, and what they will do to prevent the mistake in the future. Even though failure can never be prevented, if we ultimately succeed, putting mistakes front and center keeps us focused on making a few of them as is possible.