I’ve long believed in the concept of failing fast… learning quickly and deciding whether to invest more or drop a project like a hot potato.

In a recent blog posting by Bob Sutton, entitled Why Rewarding People for Failure Makes Sense: “Kill Fees” for Bad Projects, he brilliantly took the concept one step further. As noted by U.C. Davis Professor Dean Keith Simonton, it is widely recognized that a high failure rate is the hallmark of a genius. So to make sure that people fail faster, rather than holding on to a ‘failing’ project, Sutton suggests ‘reward them to fail’. Pretty bold move, but I really like it.

I’ve seen a number of derailed projects go farther and farther down the slippery slope, mostly because the decision-maker doesn’t want to admit to her bosses or peers that she made a mistake, or that the project just won’t deliver what they expected. Instead of taking steps to correct the situation, they make up excuses and throw more money at a failing project in the hopes that it will get back on track.

The example Sutton quoted from Merck is an excellent way to help companies maintain focus on the things that matter the most. It helps people make the best use of their time and their company’s resources. Now that’s innovation.