Digital

Transformation
Innovation

To innovate more
as part of digital
transformation, define
failure, not success.

© 2020 Gartner, Inc. and/or its affiliates. All rights reserved.

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 1

Introduction
Leading and encouraging innovation as part of digital transformation has become a key part of the job for many CIOs. In fact, 90% of CIOs
surveyed* admitted that it was a real challenge, with 53% hoping to address that challenge at an upcoming conference.

Knowing that it is key for success is one thing — but the bigger challenge for CIOs is understanding how digital transformation can help
navigate opportunities as well as control disruption and uncertainty.

This eBook explores 4 truths about failure in a corporate context to help you innovate as part of digital transformation.

1 Great innovation requires failure

2  ost humans, especially the corporate kind,

M
are wired to avoid failure

3  ot all failure is the same. Some is good,

N
some is great, some is bad

4 Name your fears and seek out failure in

small doses

* Gartner CIO & IT Executive Summit 2019 CIO Attendees

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 2

1
Great Innovation Requires
Failure
Successful business leaders would have you believe that if you fail fast,
fail forward and fail often, you will experience more innovation — and
they’re right. But you most likely don’t work for a small startup, but part
of an established international organization that has a failure-phobic
culture, CEO and shareholders.

Knowing in principle that failure is necessary and being prepared

for the sense of impatience, frustration and even recklessness that
innovation can trigger doesn’t make it easier for professionals to
accept when it happens. This public expression of truth is especially
important for IT leaders who encourage innovation.

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 3

2
Most Humans, Especially
the Corporate Kind, Are
Wired to Avoid Failure.
The human brain is split into two sections. One section is your
emotional brain, impulsive and powerful. The other section is your
analytical brain, rational and thoughtful. For example, if you’re on a diet
and in a bakery, your analytical side is telling you not to succumb to
the cake. At the same time, your emotional side is begging you to buy
more cake.

What does all of this have to do with innovation and failure? When you
ask your employees to fail fast, fail forward and fail often, you’re going
up against the emotional brain, which is bigger and often in charge
due to the tempting options on offer.

The word “failure” induces a fear reaction in the majority of employees,

especially those working in large organizations. You know you need
to innovate, and you know your employees will fail on the way to
greatness. But you’re not a startup. Your culture probably does not
value and celebrate failure. And your employees know it; their brains
know it. Their experience in the working world has reinforced the
notion that “failure” does not help enhance their career.

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 4

3
Not All Failure is the Same.
Some is Good, Some is
Great, Some is Bad.
It’s common to think that one either succeeds or fails at something. Great failure is the kind that comes with important learning you could
But when one examines failure more closely, it becomes apparent that not have gathered any other way than by trying and failing. Bad failure
failure is not binary. In fact, there is a spectrum of failure from great, is the kind that comes from shoddy work, demanding ROI too early
good and bad. (or killing ideas too soon), or proceeding based solely on gut instinct
rather than user-centered evidence. Somewhere in the middle of
the spectrum is good failure, where experiments are being tried and
Great Good Bad
assumptions tested.
We learned from our We created We did shoddy
experiments, and experiments to test work.
changed course a hypothesis.
We went on gut
when necessary.
We laid out feeling instead of
We tested assumptions, obtaining evidence.
assumptions in the didn’t start with
We tested on
right order. those individually
revenue and profit
sufficient for failure.
We focused on from Day 1.
evidence, not We had no
debate. alternative to this
project.

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 5

In the scientific method, hypotheses are validated or invalidated via a
series of experiments. The focus is on evidence, not personal opinion,
and the outcome is gathering learning that can be used to move the
innovation along. The key is that whether you prove or disprove your
hypothesis, the experiment is a success as long as you were rigorous
in your exploration. If you disprove your hypothesis, you capture what
you learned or what you would have needed for the outcome to be
different. Note that in the illustration, the scientific method doesn’t
have failure as a parameter.
To further explore good, great and bad failure, conduct a premortem.
A premortem explores the possibility of failure before you begin,
by asking, “It is 12 months in the future and our project has failed
spectacularly. What went wrong?”
Since you’re asking a hypothetical question, participants are more
likely to provide doubts, questions and obstacles than if the team was
already reeling from a failed attempt. This exploration ahead of time
removes the taboo around failure at the start, rendering the possibility
of failing less scary.

Here is a template for a premortem you can use with your teams.
Identify the Problem

Template for a Premortem to Define Failure in Advance

1. Provide Short Overview of Project.
Gather Data
2. Failure Exercise:
 Imagine it is the “go live” date and everything has gone
spectacularly wrong. What happened?
 List all the possible reasons for failure, big and small. No
Hypothesis
solutions allowed at this point.
 Pick the top 10 problems — rank according to
showstoppers and those most likely to occur, Discard those
you have no control over, such as an economic downturn.
Test the Hypothesis (Experiment)
3. Solution Exercise:
 Identify proactive solutions (to prevent the problem).
No Yes  Find backup plans (to repair the problem if it occurs).
Does the New Data Agree?
 Assign owners and add to risk log.

Capture learning, create As the name suggests, the key is to conduct a premortem before you
new hypothesis. start, as a no-holds-barred exploration of what could go wrong.

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 6

4
Name Your Fears and Seek
Out Failure in Small Doses.
In any work environment, employees tend to be good at setting goals In this fear-setting exercise, the objective is to explore the vague — and
but less so at exposing the fears that go with them. One way to do thus potent — fears that could hold a team or individual back from
this is by engaging in a fear-setting exercise, much like a goal-setting pursuing a bold innovation. The exercise demands as much rigor in
exercise. fear-setting as one would use in goal-setting.

Start by defining the worst things that could happen if you were to
pursue the innovation. Do this as a team. Attempt to get beyond an
Checklist for Naming Your Fears
intellectual analysis by visualizing the project if the worst occurred.
Explore how the worst-case scenario would feel. Could you waste
Define worst Prevent worst Repair worst
money? Lose credibility? Lose your job? What is the worst that could
things: things: things:
happen?
1. 1. 1.

2. 2. 2.

3. 3. 3.

Benefits of taking Cost of inaction Cost of inaction

action: 6 mos: 18 mos:

1. 1. 1.

2. 2. 2.

3. 3. 3.

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 7

Next, analyze ways to prevent the worst from happening and come
up with ways to lessen the consequences if the worst really did occur.
Create a safe place for innovation where your credibility will remain
intact. Negotiate longer time frames or innovation-friendly metrics that
will mitigate the worst.

Next, write down all the benefits of taking appropriate action.

Presumably, the innovation is worth pursuing because of all the
possible future benefit. Provide as much detail as you can about the
benefits that could accrue from this innovation.

Finally, and most importantly, write down the cost of inaction. That
is, analyze the cost of not pursuing the innovation, after six months
and then 18 months. The cost of doing nothing mostly doesn’t get
treated with the same rigor as the risk of doing something, and
that is a mistake. In a world of digital transformation, the cost of
inaction goes up every day.

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 8

To successfully lead innovation and strategic business change as
part of digital transformation, CIOs should:

Work with your team to describe the bumpy road to

innovation, making it as real as possible. Executive
agreement in principle is likely not enough to see you
through the inevitable obstacles on an innovation journey.

Define good, great and bad failure before you start. Adopt
great failure practices by following the scientific method:
Construct hypotheses and test them with a series of
experiments. Rely on evidence, not just opinion, to move
forward.

Use premortems, working backward to determine what

potentially could lead to the failure of a project, and the
fear-setting exercise to both mitigate the fear of failure and
prevent problems before they occur.

Identify small areas in which your team can fail safely, to

ease into the feeling of vulnerability and risk that comes
with innovation.

Change your language from using fear-triggering words like

“failure” to positive terms like “learning and experimentation.”
Only do this if you are sincere, as a lack of authenticity will
backfire quickly.

Go forth and fail fabulously on the road to digital transformation

innovation.

Digital Transformation Innovation - Gartner CIO & IT Executive Summit 2020 9

Where will you find the latest ideas and
technology to ignite innovation?

Gartner CIO & IT Executive

Summit
18 – 19 June 2020 | Frankfurt, Germany

Innovation can be used to address challenging problems in existing

processes or operations, develop new digital products or services,
or enhance existing ones. Innovation can also lead to entirely new
business models. And innovation initiatives can range from small
projects with very limited resources to major corporate investments.

Register today to unlock the inspiration, insights and confidence

needed to innovate and win in digital transformation.

3 ways to register
Web www.gartner.com/eu/ciode
Email GlobalConferences@gartner.com 
Phone +44 (0) 20 3993 1848

© 2020 Gartner, Inc. and/or its affiliates. All rights reserved.