Everyone knows but rarely practices the secret to successful innovation: knowing how to fail early, and fail cheaply. Which is why P&G is still actively investing in game-changing innovations even amid the recession.

Real innovation is becoming rare which is why P&G knows it’s important to master the ‘art of failing’. P&G’s CEO, Lafley says, ‘In our industry, only 15%–20% of new products succeed. P&G’s success rate is a little over 50%. But we were at that lower industry average in the ’90s. We improved our batting average by clarifying and simplifying the innovation process. We set checkpoints with clear measures for each phase of the process from ideation through development and commercialisation. If a project looks like it won’t make it, we drop it. You learn more from failure than you do from success but the key is to fail early, fail cheaply, and don’t make the same mistake twice.’

Ref. http://blog.futurelab.net/2009/04/the_secret_to_successful_innov.html