Failed at business? Throw a party

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It's a blustery Monday night in Detroit and Cliff Bell's, a classy 1930s-era jazz club, is packed with people celebrating failure.

It's a failure fest, to be precise – an evening for aspiring entrepreneurs to get together and talk about lessons learned from goofing up.

"I've failed lots and lots and lots in life and in a variety of different ways. I have no doubt I'll fail again – probably this week," Leslie Smith cheerfully tells the audience. She writes a blog for Fail Detroit, a community of entrepreneurs and innovators, and is president of TechTown, which supports business startups.

Failure – or the idea of embracing failure as a vital part of innovation and entrepreneurship – has garnered growing respect in recent years. Some companies, such as drug maker Eli Lilly, consciously celebrate failure as an essential part of innovation, while others, such as the conglomerate Tata Group, give annual prizes for best failed idea.

It's something Canadians, often criticized for a conservative approach to risk and fear of failure, might note. Recognizing failure and learning from it are often the best paths to success.

Across sectors "the pace of change is so great that innovation is becoming the imperative to stay competitive. It's not a 'nice-to-have.' If you want your business to survive, you need to have this," said Ashley Good, the Toronto-based founder of Fail Forward, a unique consultancy which advises businesses, funders and non-profits on how to innovate and "build resilience."

That requires a cultural shift in thinking, she says, from assuming one knows all the answers, to "we need to try, and try a lot of things, and harness the creativity of our people," says Ms. Good, who has led Engineers Without Borders' annual – and ground-breaking – failure report, which "celebrates a willingness to be bold and take calculated risks."

Among the services Fail Forward offers is showing businesses how to conduct a "blameless post mortem" as well as hosting failure fairs and showing staff that failure can be an indicator of an innovative culture.

It's not just budding entrepreneurs who need to embrace failure. The public sector and non-profits would benefit from shifting attitudes too.

"Failure is the key to developing high-impact innovations," especially given the growth of complex and persistent social problems, said Tim Draimin, executive director of Social Innovation Generation, a Toronto-based partnership that aims to foster social innovation. Admitting what doesn't work is "okay since learning from failure opens the door to innovation success."

The importance of failing is such that there's even a publication dedicated to exploring it. Failure Magazine looks at "humankind's boldest missteps," with recent business case studies that include the demise of Washington Mutual, a collapsed U.S. bank, and the myths of micro finance. Its website lists the most popular stories being read – and the least popular.

The need to innovate to survive may mean the other "f-word" finally gets destigmatized. "In too many companies, failure is something to be avoided," the Intelligence Unit of The Economist noted in a report last year. "But it ought to be celebrated as a daring new idea that could point the way to future success."

Canada has no shortage of innovation, even as many entrepreneurs struggle to bring their products to market. An abundance of creativity was on show at Discovery conference in Toronto this week, from 3-D printers that print chocolate to cameras that track skateboarders and a flexible, paper-thin tablet computer.

Sebastien Fournier, who is making a solar airship (which looks like a blimp with solar panels), knows about failure. His Ontario startup weathered the recession and his team spent years struggling to develop reliable controls of the aircraft.

But he persisted. And the trial and error sharpened his commitment to creating a new mode of transport that requires no fuel and no airports, that can deliver medical supplies to places without roads, such as Northern Ontario or parts of rural Africa. The value of several years of tinkering has built knowledge or "trade secrets."

"My definition of an entrepreneur is someone who keeps failing until they succeed," he says, noting that Americans are more likely to try and fail while Canadians are more "reluctant."

Back in Detroit, a city itself in the midst of both failure and renewal, the panel of entrepreneurs has plenty of insights into the bright side of screwing up.

Among them: Ask for forgiveness rather than permission. Sometimes getting fired can lead to greater things. Fail early, recognize it and move on. Be open to rethinking the way you go about running your business. Know when to walk away. Don't be afraid to talk about failure when it happens. Not everything needs to be perfect. And last: It takes courage to fail.