Innovation Lessons from the World Series
As World Series 2009 closes out this week, we will have seen more strikeouts than home runs. But despite all the swings and misses, baseball's popularity shouldn't be surprising. Baseball embodies the idea of resilience. And resilience is exactly what the global economy needs.Â Â Â Given the recession and jobless recovery, baseball reminds us to take heart. "You just can't beat the person who never gives up," Babe Ruth once said. He would know. The Babe struck out 30 times in World Series games. It's this get-up-again quality that underpins the strength of athletes, innovators, and achievers alike. And with elevated unemployment rates—nearing 10% in the U.S. and Europe—we need innovators to pull us through. More Misses than HitsBaseball teaches us to overcome setbacks. Hall of Famer Reggie Jackson struck out a record 2,587 times in 2,820 games. If you saw Reggie play, you also saw him whiff. This year, Derek Jeter leads the Yankees with a batting average of .334, while Phillies slugger Shane Victorino is batting .292. This means the game's top players miss 70% of their at-bat attempts. Let's hope this lesson of resilience has been heeded by the entrepreneurs best suited to create new opportunities. A recent study by the Kauffman Foundation reveals that more than half of the 2009 Fortune 500 companies were launched during a recession or bear market: Intel (INTC), Microsoft (MSFT), Disney (DIS), Burger King (BKC), and FedEx (FDX) are just a few. Today, these companies employ thousands of people worldwide. Even in fields without a diamond, success requires stepping up to the plate despite past failed attempts. My own interviews with over 100 top entrepreneurs have confirmed the virtue of resilience. Every one of them described early failure as a prerequisite for success. Comeback StoriesFor example, PayPal reinvented its core product multiple times, teetering on the brink of insolvency, before it became the money-exchange hub we know today. Even the iPod and iPhone are comeback stories, representing Steve Jobs' resurgence after being fired from Apple (AAPL), his own company, 25 years ago. In Silicon Valley, LinkedIn founder and investor Reid Hoffman views failure much like a baseball player views strikes. "Frankly, if you tune it so that you have zero chance of failure, you usually also have zero chance of success," he explains. Competitive cultures don't over-penalize failure; instead they recognize its value. One of the reasons Silicon Valley is the innovation capital of the world is because technology companies view failure as incremental learning. Just like a batter burned by a fastball, agile competitors sharpen their instincts to anticipate better what comes next. In fact, many of the thingsÂ we use in daily life are the result of previously failed endeavors. The cleaning solution 409 went through 408 iterations to get the right formula. Similarly, WD-40 (WDFC) took 39 failed attempts. Unleashing PotentialFocusing on a portfolio approach, not individual wins or losses, is the mindset that spurs progress and innovation. Used by effective investors, companies, and baseball players alike. This framework for evaluating performance unleashes potential and bolsters success. In 2009, we've seen many failures—banks, automotive companies, regulators, and leaders. But "it ain't over till it's over," as Yogi Berra would say. While the global recession tests our resilience, innovators are just now stepping back up to the plate.