The Fastest Way to Drive Greater Business Impact

Everyone wants to "make an impact" in their career, but the vast majority of people take the slow lane. Not on purpose, but out of fear.

At Wayfair, we often spend a lot of time and energy achieving buy-in for multi-month initiatives. Especially as an IC without direct influence over the team’s priorities, it takes significant forethought, planning, and documentation of my ideas before I can get something ambitious added to the roadmap.

Why is this the case? Doesn't all that time spent NOT building the idea dramatically slow or stifle innovation?

Absolutely it does. Wayfair has fostered a results-driven culture where each employee is rewarded for their successes and punished for their failures. It's woven into the "core competencies" against which promotions and pay raises are determined each year.

And what's the natural consequence of this incentive structure?

People are scared of failing.

They tend to pursue a new idea only if they are confident in its potential for success, because their reputation is at stake and they need to be seen as someone who "drives results" within the company. Planning cycles are drawn out, ambitious ideas get deprioritized, and employees become discouraged from vocalizing their moonshot visions for the future.

Oops. By incentivizing people to succeed, we've inadvertently disincentivized innovation. So what's the better alternative?

Reward failure too.

It's counterintuitive, but rewarding failure as much as success is the key to encouraging innovation within a company. That way, experimentation is championed above all else. Bake this into your incentive structure by giving promotions and bonuses to those who run the most experiments per year, and you'll quickly see a shift in company culture toward innovation.

Why does this work?

Failure ➡️ Feedback ➡️ Knowledge ➡️ Power.

Rapid experimentation drives innovation because every experiment provides valuable feedback on what worked and what didn't. The faster you fail, the faster you can funnel the learnings from that failure into the next experiment. Over a long enough time horizon, this feedback loop virtually guarantees that you'll spawn plenty of creative ideas and hit some home runs along the way.

Ironically, that "virtual guarantee" of success is exactly what Wayfair employees are striving for today. We're just going about it the wrong way, because we've been incentivized to succeed, not fail.

That's the secret.

Failure through rapid experimentation of new ideas is an essential step on the path to driving greater business impact. It will often get you there faster, with more certainty, and lead to more innovation than 6 months of planning, documenting, and discussing ever could.

P.S. Steven Bartlett discusses this phenomenon and how it's impacted all of his businesses in Law 21 of his book, The Diary of a CEO. It's available for free as an audiobook if you have Spotify Premium. 🙂

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