It’s fine to celebrate success but it is more important to heed the lessons of failure ― Bill Gates
While an entrepreneur like Bill Gates recognizes the need to scrutinize the reasons for failure and learn from them, scholars have paid less attention to studying how failures affect a firm’s processes and how the whole organization might learn from its errors. The need to unravel how firms react and learn by failure is particularly salient in innovative processes, which are more likely to fail because of their uncertainty, risk, and complexity. Any firm that could reap the benefits of learning from failing innovation projects might improve its innovative performance. This aspect is compelling when looking at the development of a particular type of innovation: breakthroughs. Innovative processes finalized to such impactful innovations are characterized by more novelty and possibly more likelihood to fail. While searching for breakthrough innovations might lead to more failures, firms might still enhance their innovation capacity and breakthrough development through an efficient and effective process of learning by failure.
The present project aims to contribute to solving a relevant issue for society, i.e. the development of safer breakthrough medical devices, by analyzing how firms’ capabilities to develop breakthrough innovations may be affected by learning by failure. A better understanding of how breakthroughs in the health industry may support European firms in dealing with the complexity, uncertainty, risks, quality, and security requirements that characterize this process. The definition of more effective approaches for developing breakthrough innovations may enhance the firms’ innovativeness and competitiveness as well as the health outcomes achieved by citizens, healthcare providers, and national and regional health systems.
The project aims to achieve two main objectives. First, a quantitative assessment of the relationships between the firm’s capability to develop breakthrough innovations and the emergence of innovation failures, with a specific focus on the two most relevant approaches that firms use to cope with uncertainty: search strategies (i.e. the balance between exploration and exploitation) and R&D collaborations. This will allow for defining a novel, systematic framework, enriching the existing literature by clarifying under which conditions innovation failure may favor or hamper breakthrough innovations.
This novel framework is then exploited to pursue the second objective, aiming at developing a set of best practices, i.e. managerial tools and procedures, that firms can implement to better exploit learning by failure in their future innovative efforts. These best practices result from multiple case studies in which the insights provided by the quantitative framework are further analyzed and aligned with the internal innovation processes carried out by firms operating in the medical devices industry.