If today’s mantra for innovation is to celebrate failure as a catalyst for success, how do legacy enterprises fine-tuned to reduce failure become innovative organizations?

A new book from Deloitte and MIT Sloan Management Review, The Technology Fallacy: How People are the Real Key to Digital Transformation, addresses this question to helps organizations understand how to cultivate an environment conducive to innovation.

In today’s rapidly changing digital era, innovation has become critical to survival, and to innovate IT leaders must facilitate a shift in mindset at their organization to allow and even embrace a certain amount of risk.

“You have to start with the curiosity of an explorer,” says Anh Nguyen Phillips, digital transformation research lead at Deloitte’s Center for Integrated Research, and one of the book’s co-authors along with Gerald C. Kane, Jonathan R. Copulsky and Garth R. Andrus. “But you have to pair that with the discipline and structure of a scientist — develop a hypothesis, create experiments and tests to confirm or deny those hypotheses in a very precise way. Then, you eliminate and isolate variables to learn what is and what isn’t working.”

Rethinking failure

Research shows that risk taking, experimentation and failure are all necessary elements for fostering innovation, but most organizations are optimized for efficiency and productivity. Because of this, most IT cultures are designed to eliminate variation, reduce experimentation and minimize risk.

“That’s where a lot of organizations get stuck,” Phillips says. “Their IT functions have been approached in a specific, traditional way to keep the lights on and keep things running, but now they have to lead innovation, and minimizing variance and failure isn’t the only goal anymore.”