We love to focus on the big, public failures, and treat these market flops as the ultimate cautionary tales. But we are looking in the wrong place. The costliest failures are the ideas that never get a shot.
If you work in innovation, you likely feel this. You watch your best ideas sit stale and you witness another lab being spun up only to be dead on arrival when the new CTO shakes things up. You might start to feel like you aren't very good at your job.
“I realized that if innovation was in my job title, culture change had to be at the top of my job description," says Bud Caddell, founder and CEO of Noble.
Drawing from years of experience leading innovation labs and transformation efforts across industries, Bud reframes how organizations should approach uncertainty, risk, and failure.
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The “Wishing” Wand and the Whiplash of Scale
Test small before scale kills your project
To really grasp how deep this dysfunction goes, Bud points to a project that fundamentally changed his career. A big-box retailer came to his team with a specific problem: they had trained people so well to buy groceries that customers no longer thought of them for holiday gifts like toys and electronics. They needed a reason for people to come to the store.
Bud’s team developed a "wishing wand": an RFID-enabled wand that kids could use to tap toys in the store, creating a digital wish list for Santa. They planned to make 30 or 40 of them, testing in just two stores to see if it changed behavior.
Then the CEO got wind of it. Suddenly, the plan to produce 30 wands became a mandate to buy a manufacturer in China and mass-produce them for every store by the holidays. It became a pet project. But as quickly as it ballooned, it collapsed. The head of stores refused to give up two feet of retail space for a kiosk because he couldn't monetize the square footage. The CMO refused to give up the ad budget because he was incentivized around online attention, not in-store behavior.
"It went from this idea of, let's make 30 of these... to let's buy a factory... to suddenly, like it was a completely dead project," Bud explains. "And, this all happened in the span of two weeks."
The project died not because customers hated it, but because the organization could not agree on how to handle the uncertainty. This creates a whiplash effect that paralyzes teams. To fix this, we must first agree on what we are actually talking about when we say "risk."
Distinguishing Uncertainty, Risk, and Failure
Clarify these critical concepts
Organizations tend to conflate three distinct concepts, creating a fog that makes smart decision-making impossible. We need to create space between them.
Uncertainty is what is just not known for a fact. It is a fog. "An uncertainty could be a landmine or a goldmine. We just don’t know until we start to venture into that territory."
Risk is known probabilities. These are not uncertainties anymore; we have a deeper sense of the trade-offs of action versus inaction.
Failure is any deviation from the intended outcome that causes harm.
The dysfunction arises when companies mix these up. You cannot throw expertise and forecast at true uncertainty. Yet, that is exactly what happens when leadership asks for an ROI forecast on a brand-new idea that hasn't been tested.
Most organizations fear failure to such a degree that they prefer minimal risk with low upside over uncertainty with high potential. They assume they can plan their way out of all risk, spending endless hours in meetings pretending they can control the environment outside the organization.
The Three Types of Failure
And how to respond differently to each
Let’s look at failure in more detail. When it does happen, we must stop treating it as a monolith. Bud identifies three specific types of failure, each requiring a different response.
Procedural Failures. These are avoidable errors, like missing something on a checklist. We often label this incompetence, but we should look at systemic conditions first: teams doing too much, managing too much work in progress, or trying to move too quickly.
Strategic Failures. These are simply bets that didn't pay out. We thought the ROI would be higher, but it wasn't. The goal here is to learn by design—testing small, like the original plan for the wishing wand, rather than betting the whole company.
Response Failures. This is when we miss signals or wait too long to act. The goal here is to sense and adapt.
“The goal isn’t to eliminate failure,” he stresses. “It’s to match the response: minimize procedural errors, learn by design from strategic ones, and sense and adapt when response failures occur.”
The Deception of Fuzzy Goals
Turn slogans into testable objectives
One of the primary leverage points for changing how an organization handles risk is attacking "Fuzzy Goals." We all know what these sound like: "Delight the customer." "Lead the industry in digital." "Be more innovative."
"Fuzzy goals are a shield because they can sound ambitious, but they avoid any discomfort of choosing, prioritizing or acknowledging unknowns," Bud says.
Leaders use them because they sound empowering, but they lead to a breakdown of trust. Leaders wonder why teams aren't stepping up, while teams look at the slogan and feel skepticism, knowing it is likely a political message for the board rather than a directive for them.
If you inherit a fuzzy goal, you must push to "defuzz" it, since a real goal needs a timeframe. "If it’s not three years, that’s not a sober timeframe for transformation." It needs a desired outcome, not just an output. It needs conversation around acceptable losses—what are we putting on the table?
The Epidemic of Mindless Execution
Make work visible and kill “busyness”
Even with clear goals, organizations often fall into mindless execution. "There is such an epidemic of busyness in most organizations," Bud observes. We are handed projects, and we follow the same path we always have. But if you approach work the same way that you always have, you are likely to get the same results.
We treat "pace" as a proxy for success: look how many meetings I am in, look how many features we are shipping. But this is often just motion, not progress. To counter this, we need to clarify the opportunity before we start and use checklists for the things that are easy to forget but lethal to skip.
We also need to make work visible. Bud’s teams share a "week note" every Friday—what they did, what they learned, where they are stuck—sent to the entire company. It forces better behaviors because the work is in view. We also need retrospectives that are not just academic discussions but venues for real conversation. "I’m just a big believer that the existing culture cannot be used to create the new organization," Bud states. You have to act as if you are from a different culture as you go about the work.
Confronting “Phony” Learning
Conduct the SEPR test: Substantiated, Exploited, Proportional, Relevant
When things go wrong, we comfort ourselves with the idea that "at least we learned something." But organizations are swimming in fake learnings.
"A lesson learned needs to be substantiated, exploited, proportional, and relevant, otherwise it’s just narrative," Bud explains.
To follow the SEPR test, innovators should follow the below steps:
Make It Substantiated. Real learning requires proof or observation, not just internal feelings. If you can't show evidence, it's not learning—it's speculation.
Exploit What You Learn. Learning without action is useless. If you discover something valuable, act on it. Otherwise, you're just collecting insights that sit in decks.
Keep It Proportional. If you spend a billion dollars and learn that customers hate the color yellow, that's not proportional learning. The cost of discovery must match the value of the insight.
Ensure It's Relevant. The learning must connect back to the hunches or hypotheses you had when you set out. If it doesn't answer your original question, you've wandered off course.
Politics: The Dark Planet
Master politics or miss out
We can talk about frameworks and goals all day, but we cannot ignore the gravity that distorts everything. "Politics is the dark planet orbiting the solar system of innovation," Bud says.
We want to believe in a meritocracy: the best ideas win. But good work rarely speaks for itself. Innovation requires champions, therefore if you do not engage in politics, you and your ideas will lose.
You have likely seen the political killers of innovation:
The Scarlet Letter. You fail once and are branded forever. One misstep defines your credibility, making it nearly impossible to get approval for future projects.
Consensus. Just one "no" can kill an idea, no matter how many people say yes. This turns innovation into a veto game where the most risk-averse person wins.
Revolving Doors. A sponsor leaves, and the project resets entirely. New leadership means starting from scratch, defending what was already approved.
Snipers. They wait until success starts to emerge, then line up to shoot holes in it. The closer you get to shipping, the more vocal the critics become.
"You absolutely need powerful sponsorship inside an organization. Without it, it’s almost impossible to do innovation," Bud warns. You need someone with clout and stamina who can fight for resources and provide air cover.
Tactics for the Political Arena
Secure sponsors, staff A-players and manage vetoes
Engaging in politics feels icky to many innovators. In actual fact, it is only selfish if you put your personal interests first. The reality is that less noble people will happily take up the space you are willing to sacrifice. To navigate this "Dark Planet," you need to master a few moves:
Secure Sponsorship. Find out who has power and influence. What do they need? It might have nothing to do with innovation, but you must find a way that your work connects with their goals. You have to build that relationship to understand their real desires.
Staff the Best People. The people who work on an innovation team have to be the absolute best people—because the weakest person brands the entire team. Your team needs to be the people who are best at generating demand for their own thinking.
Map and Manage Veto Players. Understand who can kill your project. Address early resistance head-on. Have the uncomfortable, smiling conversations about why they aren't a fan of the work.
Compromise to Survive. We often become passionate about our ideas and refuse to bend. But compromising isn’t losing; sometimes you need to sacrifice a bit of the vision to get the idea into the world.
Your Next Move: Embrace Discomfort to Change Risk Appetite
The work of innovation is not just about coming up with the next "Wishing Wand,” but about fixing the boardroom dynamics that killed it. It is about finally recognizing that execution is what companies are starving for, not more ideas.
Looking forward, we must prepare to do the messy, human work of culture change, and:
Stop throwing expertise at uncertainty and start building teams that can test and probe,
Stop hiding behind fuzzy goals and start having sober conversations about timeframes and acceptable losses,
Stop pretending politics doesn't exist and start wielding it earnestly to protect the work that matters.
“With continuous movement and adaptation, we move closer to changing the company’s appetite for risk—but it is non‑negotiable that we stomach some of the discomfort ourselves.”
That is the missing piece to smart risk-taking and can be catalytic to the future of our teams.
