Controlled Failure and UX: A Key to Innovation

In “Why Failure Drives Innovation,” Baba Shiv, Professor of Marketing at the Stanford Graduate School of Business writes:

Apple Newton and iPhone (Source: Blake Patterson)

“Failure is a dreaded concept for most business people. But failure can actually be a huge engine of innovation for an individual or an organization. The trick lies in approaching it with the right attitude and harnessing it as a blessing, not a curse.”

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The value of failure isn’t a new or unproven idea. But despite numerous stories and quotes about how tightly success and failure are tied, few companies embrace and harness the power of failure. What many companies want is “controlled” failure. Dr. Shiv describes one approach:

“One approach is to engage them in rapid prototyping — the process whereby they brainstorm wild new ideas, and then quickly develop a physical model or mock-up of a solution. This allows people to move quickly from the abstract to the concrete, and lets them visualize the outcome of their ideas. It gives the brain richer inputs.
Because not all prototypes end up as the best or final solution, rapid prototyping also teaches that failure is actually a necessary part of the process. You may chuck an idea and say, ‘Let’s try something else,’ but you keep moving in a positive way. This whips the brain into associating ‘failure’ with pleasure.”

Rapid prototyping allows teams to learn from their explorations and their colleagues.
Another approach is incorporating user-centered design (UCD) into your development process. UCD techniques take this approach a step farther by usability testing the prototypes. Including the people who will actually use the end result lets teams learn not just from themselves but also from their customers. The collaborative user experience design allows for rapid exploration and evaluation of with users contributing to the process, not only evaluating the outcomes. User-centered design offers a way for even risk-averse organizations to benefit from failure.
What controlled failure techniques have you used? Which have worked best, either in terms of discovering innovations or in terms of team acceptance?