I was working with a leadership team last week when the Chairman said "I want our people to fail fast."

I love that phrase, because it encourages innovation. Unfortunately, it can also cause people to get real quiet and avert eye contact, looking at the ground like they just dropped their pencil.

"I know the last guy who failed fast, and he doesn't work here anymore."

If you want to encourage innovation by failing fast the right way, try these three tips:

1. Limit Potential Damage: Start with a small pilot. Maybe a limited region, service line, or a limited customer set.

2. Tolerate Mistakes: You should explicitly state this to people, otherwise they may not believe it, especially if they have suffered repercussions before.

3. Schedule a Course Correction or Lessons Learned Meeting: This applies to any project. Rarely do things go to plan. If we state a plan up front and have to unexpectedly change direction, some could perceive that it was a bad idea to begin with. Instead, build continuous improvement and lessons learned into your plan. It will encourage people to keep track of improvement opportunities and share them in a structured way.

Following these steps will ensure you fail fast the right way, and create a culture of rapid, consistent innovation.