Failure as a Service (FaaS): What it is? Why should I care?
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The first in a two part series on maximising the positives from failure when organisations are iterating with new approaches in an effort to digitally transform.
The requirement for organisations to iterate quickly with innovation and scale what works is increasingly important.
Many organisations have tried various approaches to achieve this and failed. The organisational landscape is littered with decommissioned ‘Innovation Labs’ and no-longer-filled VP of Innovation roles. Failure, however, does not need to be a slope to inaction nor the end of the process.
Reimagining Failure as a Service (FaaS) can offer the benefit of scaled learning which leads to more successful innovation projects going live.
How? Understanding your organisation's culture of urgency and ability to execute are the two key ingredients.
This article clearly defines FaaS, its benefits and provides initial guidance on where you could begin to assess your organisation’s readiness to capitalise on it.
After reading this article you will have an understanding of the essential elements of any FaaS approach. These core elements being People/Culture and Organisation, Operations, Market & Customer Insight and Leadership.
A follow up article will look at how to assess what your current reality is across these elements and approaches to enable FaaS in your company.
What is FaaS and where has it come from?
Failure as a Service (FaaS) is a concept the business world will be hearing a lot more about in 2018 and beyond. It was highlighted in a Forbes article as one of the Top 10 Trends in Digital Transformation for 2018 and we believe its influence on how businesses innovate in the coming year will grow. So, what is FaaS, how has it evolved and what could it mean for your business?
The term FaaS is vague. It is either housed in older technical development concepts such as Failure Testing or limited to tactical ‘Fail Fast’ approaches such as rapid prototyping, lean startup, agile development or visualisation techniques. Fail Fast thinking, which has been both derided and lauded for several years, has largely been a binary discussion about entrepreneurial mind-sets of ‘succeed’ or ‘fail’. The thinking has been that failure is fine, as long as you learn from it. This mentality is encapsulated perfectly by FailCon, an annual conference about embracing failure. Tendrils of it also herald back to a 1992 paper by Duke University’s Sim Sitkin calling for ‘intelligent failure’ and not just a blunt belief of ‘if at first you don’t succeed, try, try again’.
So how can we define FaaS today? We believe FaaS is the process which enables organisations to iterate new ideas, optimise those which work, quickly discard those which don’t and learn from both.
The ‘service’ element is two-fold. Firstly, partnering with external organisations to fast-track the adoption of FaaS approaches and secondly building capability in-house then leveraging it across the business. Over time, partnering externally can also build internal service capability.
Why is business now ready for a matured view of FaaS? FaaS thinking is seeing increased momentum in the last few years. This momentum is being supercharged by two variables.
The extent to which companies are taking the reality and rapidity of digital disruption more seriously and the degree this reality is exhibiting itself across the business, especially in senior leadership, as a ‘call-to-action’ (what we summarise in our follow up article as a culture of urgency) and,
Awareness of the benefits that adopting fail-fast approaches can have for a business, the extent these approaches/tools and processes exist in organisations and the maturity of these approaches (or, the ability to execute).
Highlighting these two variables, a recent study by Deloitte Digital and MIT Sloan Management Review found that companies who systemically use fail fast approaches which enable experimentation and iteration, are more likely to be digitally mature and more successful in responding to digital disruption. Our own thinking about the Dysfunctions of Digital Transformation also highlights various negative signals which exhibit if an organisation is not enabled to understand nor execute on FaaS thinking and approaches and therefore is blocking its potential to drive digital transformation.
It is worthwhile noting, for some hyper-successful companies, a FaaS mentality is seen as a cornerstone of their success. These companies have built and leveraged the ability to learn from failure across the business.
“Our success at Amazon is a function of how many experiments we do per year, per month, per week, per day…” ~ Jeff Bezos
The cultural and practical benefits of embracing a deeper and systemic approach to FaaS are numerous. These include:
Learning culture: Learning supersedes knowing, allowing for more openness and sharing of ideas since mistakes are accepted and learnt from.
Less resistance to change: Through a learning culture, teams become comfortable with the inherent ambiguity that exists today and have less resistance to change over time.
Bias for action: The constant assessment and recalibration leads to greater agility and knowledge, helping an organisation keep up with, and get ahead of, the competition.
Quicker time to market: Products and services are brought to market quickly for more feedback from the consumer and refinement.
Risk tolerance: A culture that embraces failure enables an organisation to take more calculated risks.
Capitalising on FaaS. It's a spectrum.
Capitalising on FaaS means understanding both the necessary elements within your organisation to unlock its benefits and finding the best approach to FaaS for your organisation. When we look at the necessary elements, we see the following four as crucial.
People, Culture and Organisation: The degree of a shared understanding by employees for the need to fail fast, how to do it and how to action the learnings.
Operations (Process, Technology and Facilities): The structures, tools and processes present in an organisation which enable employees to fail fast, learn and iterate.
Market and Customer Insight: The degree to which the needs of the customer are considered, and met, through an organisation's innovation processes and the degree of market knowledge re: the drivers and direction of change relevant to an organisation.
Leadership: The extent to which there is a clear, well communicated and agreed vision of the need to iterate and experiment for learning and innovation.
There isn’t a silver bullet approach to FaaS for an organisation. There are numerous approaches which could be undertaken, and overtime, evolved and spread more systematically. The starting point is for your organisation to ask, "To what degree do I have the essential elements which will enable success with any FaaS approach?" Then, once this clarity has been achieved, your organisation can explore the right solution space for the best FaaS approaches.
The table below is an example of different FaaS starting points. Each one is potentially more appropriate for a given organisation, dependent on how ready it is across the four key elements discussed above. To the far left of the table, if an organisation is low in readiness across the elements, simple prototyping approaches could be implemented in some project teams and evolution occurs from there. In the middle, more structured and systemic approaches which are transversal in an organisation could be investigated, as the prerequisite success elements exist. Finally, to the far right, more experimental approaches such as Corporate Venture Building could be looked at as a deep level of external assistance is required.
In our follow up article on this theme, we will look at a simple approach to assess your organisation’s ability to implement FaaS approaches and start capitalising on the benefits inherent with them.
If you have found this article interesting and would like to start a conversation on how your organisation could start benefiting from FaaS, we’d love to talk.