True Leaders Know the Value of Failure

Inspiration from IBM’s Tom Watson

by Stefan Lindegaard

True Leaders Know the Value of FailureA legendary story about Tom Watson Jr., who guided IBM in its glory days, bears repeating in any discussion about smartfailing.

According to the story, a vice president who had lost the corporation $10 million on an experiment that failed was called to Watson’s office. Fully expecting to be fired, the VP brought along his letter of resignation and presented it to Watson, who refused it with this statement: “Why would we want to lose you? We’ve just given you a $10 million education.”

After hearing those words, how hard do you think that VP worked on his next project…and the one after that…and the one after that? If ever a company president wanted to insure that someone would work his heart out, those were the words to say.

And naturally, as news of this episode inevitably spread throughout the organization, others no doubt from it exactly the message Watson wanted to send: Don’t be afraid to take risks in pursuit of innovation; you won’t be punished if you fail. No wonder IBM dominated the computer industry under Watson’s leadership.

Watson is also credited with saying, “If you want to succeed, double your failure rate.” In this recent post, Tim Kastelle of the Innovation Leadership Network, wrote that he believes Watson meant that we should encourage cheap fast failure. As Kastelle puts it, we should be “testing ideas and finding the ones that don’t work when they are still ideas, rather than things.”

I’m always looking for more examples of leaders who understand the value of failure and how to motivate people to strive for innovation. If you have any good examples, please share them. Thanks.

Editor’s Note: You might also enjoy this post – Don’t Fail Fast – Learn Fast

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Stegan LindegaardStefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Stefan Lindegaard




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No Comments

  1. Lisa Petrilli on December 12, 2010 at 11:17 am

    Hi Stefan,

    I appreciate this story tremendously and just wanted to add that in addition to the VP “working his heart out,” the value of the lesson is also that s/he’ll work from an entirely different – and more empowered – mindset. This alone, I believe, is invaluable and an outcome of truly transformational leadership.

    Thanks so much for the post, Stefan. All the best,


  2. Nikos Acuna on December 23, 2010 at 3:01 pm

    Great post. Failure as a perfect feedback loop always keeps me moving in the right direction as well.

    Looking forward to connecting.


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