Learning From Failure: The Genius of Little Bets

Let’s say your new job is to help give away money in order to solve complex problems such as climate change or poverty. To protect biodiversity in the Rockies. Or to reduce infant mortality in sub-Saharan Africa. How do you go about doing that? These days, you might search for some innovative program that you could bring to scale. A Big Idea that would create measureable impact.

A typical search for a Big Idea might involve months of intense research, consultations with experts, and in-depth analysis by senior staff. The result might be a detailed strategic plan—pages of PowerPoint slides, Gantt charts, and logic models—all intended to show how your outputs and outcomes will invariably lead to your desired impact.

Of course, this approach assumes your organization can muster the requisite insight and understanding to build the Big Idea—and that your grantees and beneficiaries will act the way you think they will act once millions of grant dollars are unleashed. But what if that doesn’t happen? And what if your resources are modest compared to the problem at hand? Do you still have the ability to contribute to a breakthrough?

Entrepreneur and author Peter Sims would say “yes.”

In Little Bets: How Breakthrough Ideas Emerge from Small Discoveries (Free Press, 2011), Sims explains how success doesn’t have to start with the Big Idea. Instead, he argues that a series of small bets can help you quickly learn what does and doesn’t work. His approach stems from his work with the faculty at Stanford’s Institute of Design, the so-called “d.school” where the concept of testing prototypes is used to foster creativity through rapid experimentation and feedback.

The individuals and organizations he draws on range from comedian Chris Rock and pundit Tim Russert to Hewlett Packard (in its early days). Sims is careful to note that these experimental innovators, such as he calls them, don’t lack a big vision—but they’re flexible, adaptable, creative, and willing to use “little bets to discover, test, and develop ideas that are achievable and affordable.”

Clearly, philanthropy is neither war nor comedy. But one of his early examples of an experimental innovator comes from our sector.

“Bill Gates, for one, doesn’t have enough expertise or insight about the problems the Gates Foundation is trying to solve … to know up front where their money will have the greatest impact. He must learn from hundreds of experiments in order to strategize about and prioritize his research.”

Later on, one of the best chapters in the book focuses on process of asking questions about problems that led to the founding of Grameen Bank and the practice of microfinance.

Above and beyond these specific examples, Little Bets offers the philanthropic sector much to consider.

To begin with, the complex problems philanthropy seeks to solve match the overarching challenge that Sims sketches in the opening pages of his book:

“The top-down, procedural planning approach is highly dependent on making predictions about the future based on past experience. … The fact is that much of what we would like to be able to predict is unpredictable. … In this era of ever-accelerating change, being able to create, navigate amid uncertainty, and adapt using an experimental approach will increasingly be a vital advantage.”

Whether your mission is to slow climate change or end poverty, this description of ever-accelerating change and complexity should ring true.

Second, the process by which Sims says organizations and individuals can cultivate experimental approaches ought to sound familiar to readers of this blog.

At the heart of the process is the act of listening to a variety of viewpoints and asking questions. It’s what Grameen Bank founder Muhammad Yunus called “the worm’s eye view,” and he acquires it when he talks to the women and men in the poor neighborhoods of Jobra, a small village near his university. After one such conversation with Sufiya, a woman who made bamboo stools, Sims writes,

Yunus felt shocked. He especially could not believe that Sufiya earned just two cents per day. “In my university courses, I theorized about sums in the millions of dollars, but here before my eyes the problems of life and death were posed in terms of pennies,” he recounted. “Something was wrong. Why did my university courses not reflect the reality of Sufiya’s life? I was angry, angry at myself, angry at my economics department and the thousands of intelligent professors who had not tried to address the problem and solve it.”

This process of listening and discovering problems to be solved is repeated by experimental innovators at diverse organizations ranging from Pixar to the US Army, and the problems they tackle range from figuring out how to move from a short animated clip to a feature film to fighting an insurgency that simply doesn’t respond to traditional tactics.

But none of the examples is as moving as the encounter between Yunus and Safiya, the woman who lacks the capital—mere pennies a day—to escape the grip of the money lenders. The encounter is all the more vivid because Sims writes in clear, vivid prose mercifully clear of jargon.

What do experimental innovators do with these insights? They try to solve them with little advances, expecting to fail more often—much more often—than they succeed. Yunus first worked to increase crop yields and then tried numerous other approaches before discovering that microfinance held great promise. A key to this approach is a willingness to realize that failure is a path forward. It’s what Sims describes as a “growth mind-set,” accepting that with great effort you can learn from your failures and improve.

“Of course, just failing is not the key: the key is to be systematically learning from failures,” notes Sims. “To be closely monitoring what’s working and what is going wrong and making good use of that information.”

For comedian Chris Rock, this means trying upwards of hundreds of jokes in front of a small crowd of regulars at a small comedy club in New Jersey and watching their body language, listening for the barest chuckle, to home in on what works and what doesn’t.

Sims concludes by returning to his initial point regarding uncertainty. “We’re taught to be linear thinkers—to follow pre-established procedures and plans—in a non-linear world. If only the world were predictable.”  He believes that creativity can become a way of life, if only we can overcome a lifetime of training and education, where “creativity routinely gets squelched. Perfection is rewarded, while making mistakes is often penalized. The term ‘failure’ has taken on a deeply personal meaning, something to be avoided at all costs.”

Clearly, none of us wants to fail at our mission. The stakes are simply too big, too many lives are at stake. But arriving at the clear goals, coherent strategies, and improved performance that form the basis of effective philanthropy may well involve more risk taking, experimentation, and failure than we are accustomed to acknowledging. Little Bets provides plenty for the sector to think about and CEP looks forward to having Peter Sims speak at our conference in May 2013.

Mark Russell is the Director, Communications & Programming at the Center for Effective Philanthropy.

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