Australia has had mixed success when it comes to being a nation of innovators. A recent federal government report concludes that while Aussies are great at incremental innovation - which primarily means adapting overseas innovations - we fall behind when it comes to creating our own opportunities and bringing new things to an international marketplace.
Our bias towards incremental innovation is nothing to be ashamed of. Australia's resource and agricultural industries are some of the most competitive in the world due to our ability to improve existing technologies. And despite our country's size, we are blessed with the people, education and capital to foster success. So if it is not resources that are holding us back, is there something about our culture that discourages that big-picture thinking?
From my experience, what may be holding us back from innovation is our attitude towards failure. It might sound counterintuitive, but big innovation and failure are intimately intertwined. Any innovation is essentially a market experiment and as with any experiment, it carries considerable risk and high failure rates. Innovators in America, and particularly Silicon Valley, understand this only too well.
“A distinguishing characteristic of the US economy, of US culture, if you like, is failure is never permanent. You're not kicked out of the game,” said Harvard professor and an expert on entrepreneurialism, Bill Sahlman.
“As a matter of fact, if you are part of a failed venture, as long as you didn't lie, cheat or steal, you're considered 'experienced'.”
While Australians are comfortable with success, we do not do so well at embracing failure. Australians can be harsh on entrepreneurs who try and fail. For example, business people who lead failed companies are too often tainted with innuendo of wrongdoing, even if there is no proof of doing so. The moral taint of trying and failing in Australia is high, and because you cannot innovate without failure, many great ideas do not even get off the ground.
Recently, I was asked to fill a questionnaire in order to join an Australian advisory board. Of the 10 questions I was asked, there were multiple ones about whether I was involved with any companies that had gone into bankruptcy or receivership. Having spent years in America where being part of a dot-com bust was worn as a badge of honour, the contrast in having to disclose bankruptcy or receivership like a criminal record, rather than as an opportunity to talk about experience, was stark.
In that environment, why would would any Australian university graduate want to pursue a start-up and risk a career that has not yet even begun? As a culture we need to embrace failure as much as we embrace success.
The publication of Steve Jobs' biography revisits the time when he was pushed out of Apple - a company he co-founded. It was no doubt a difficult time for the entrepreneur, but instead of being tainted by this perceived failure, he was able to use that experience to move on and eventually rejoin the company, building it into the success it is today.
If you look into the history of many innovators - past and present - you will often find similarly rich examples of failure being a pit stop on the way to great success.
At Google, an appetite for failure is built by the way we do things. We are in an incredibly competitive industry and you need to keep innovating or you will become irrelevant to users and the market. How we deal with that it is through our culture of innovation, staying agile, taking risks, tolerating failure and learning from every mistake.
Google Wave, a product that tried to reinvent the way we collaborate, was developed by the Australian engineering team. While it didn't work out as a standalone product, the experience gave us a new understanding of how people use technology to collaborate. Many of the features we developed for Wave can be found in other Google products today.
Failure doesn't have to be expensive, it can be cheap and fast. At Google we have a saying: “Fail fast and iterate.” This is something we need to train all entrepreneurs to do. This creates an environment where people are encouraged to tackle large problems and take those big bets. If you have a work culture where bringing your mistakes to the table every week is a normal thing to do, it feels less like failing and more like learning.
The upside is that it has never been a better time to innovate. For Australians, the internet has made the tyranny of distance almost irrelevant and opened up a global market for our ideas.
Last month Julpan, a company founded in New York by an Australian-educated engineer, was bought by Twitter for an undisclosed sum. The fact that the company was only one-year-old shows how great ideas can quickly have enormous reach. While there are other reasons why start-ups like Julpan choose to head abroad rather than stick around and grow locally, they all point to a less than optimal culture on innovation.
Australia has the smarts to become a hotbed of innovation. We just need to create an environment where it is OK to take the risk.
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