Innovation is the opposite of predictable, mistakes will be made and the riskier the bet the higher the chances of failure. With the current state of the global economy driven by the War in Ukraine and climate change, the demand for innovation is as high as its ever been.

So about that failure word, it’s going to happen and you should encourage and celebrate the right type or you will kill innovation in your organization.

The easiest way to kill innovation in your organization is to punish people after a setback. There are setbacks and then there is failure. When we rip into someone after failure, it puts that individual on the defensive. They get the message loud and clear: avoid doing that thing out of place of fear and being humiliated by your boss or maybe even fired.

What should you do instead?

If you’re a leader who’s driving innovation in your organization, you should clarify expectations and let the team know that people who fail responsibly will not be punished. In other words: make intelligent mistakes; not dumb redundant ones.

Amy Edmondson, author of Fearless Organization distinguishes between 3 different types of failure:

1. Simple failures ( = mistakes). These failures are the ones where we know how to do it right, but for some reason, the process didn’t go right.
2. Compex failures ( = accidents). In these failures, a set of factors come together in a novel way despite the reasonably familiar contexts.
3. Intelligent failures ( = discoveries). These are the undesired results of thoughtful forays into new territory.

The type of failure you should celebrate is intelligent failure.

Intelligent failures are those that arise from thoughtful actions or experiments – what we like to call smart risks – and result in useful learning, allowing us to move forward more wisely. Intelligent failure = discoveries; they’re the path to innovation.

Bottom line: Don’t punish people after failure if you want to inspire and drive innovation in your organization. Celebrate and encourage intelligent failure.