Silicon Valley is populated with people who fear only sitting on the bench while someone else scores with a great idea, says Professor Baba Shiv. How people approach failure is a key to success, he argues.
"Failure" is a dreaded concept for most business people. But failure can actually be a huge engine of innovation for an individual or an organization. The trick lies in approaching it with the right attitude and harnessing it as a blessing, not a curse.
I've coined two terms that describe how people view failure: the type 1 mindset, and the type 2 mindset.
The type 1 mindset is fearful of making mistakes. It characterizes most individuals, managers, and corporations today. In this mindset, to fail is shameful and painful. Because the brain becomes very risk averse under this line of thinking, innovation is generally nothing more than incremental. You don't get off-the-charts results.
The type 2 mindset is fearful of losing out on opportunities. Places like Silicon Valley and the Stanford Graduate School of Business are full of type 2s. What is shameful to these people is sitting on the sidelines while someone else runs away with a great idea. Failure is not bad; it can actually be exciting. From so-called "failures" emerge those valuable gold nuggets — the "aha!" moments of insight that guide you toward your next innovation.