The Real Reason Your Organisation Struggles to Innovate 

By Barbara Salopek and Dr. Melisa Buie

Most organisations have built the tools for innovation. Whether those tools actually work depends on something no budget can provide. 

Every innovation strategy has a gap. It sits between the tools organisations invest in and the honest, sometimes uncomfortable conversations those tools require to function. At Nvidia, Jensen Huang has built one of the world’s most innovative companies by treating failure as a discipline rather than a liability. The research on why that approach works, and what leaders can do to put it into practice, has direct implications for how teams are led, how experiments are designed, and how organisations turn setbacks into forward momentum.    

Innovation takes practice. 

Every organisation says it wants innovation. Then something goes wrong: a project misses its target, a product launch underperforms, or a team experiment produces the wrong result. And the message shifts. Subtly, but unmistakably. 

Opportunities narrow. The people who raised awkward questions are labelled as problems. Employees absorb the real lesson: failure is survivable here, but only if you make it invisible. When failure goes underground, so does the innovation that was supposed to come from it. 

This contradiction is expensive. McKinsey research finds that teams with high psychological safety are 2.5 times more likely to innovate successfully, and organisations that build these cultures launch 21 per cent more new products annually.¹ Gallup’s 2025 data tells a more sobering story: only 3 in 10 employees strongly agree that their opinions count at work.²  

The Failure Paradox at the Heart of Innovation 

Jensen Huang, co-founder and CEO of Nvidia, is unusually direct about what that success has actually cost.  Speaking at Stanford University, Huang said: “I wish upon you ample doses of pain and suffering. Greatness comes from character, and character isn’t formed out of smart people. It is formed out of people who suffered.”³ 

That sounds uncomfortable. It is meant to. Huang’s argument isn’t that suffering is valuable in itself. His point is that character, resilience, and the capacity for genuine innovation are forged through difficulty, not shielded from it. He describes Nvidia’s own history in the same terms: near-death moments that forced the company to rebuild and rethink what it was actually capable of. The collapse of the NV1 chip in the 1990s, pivots through market dislocations, and years when the company’s future was genuinely uncertain shaped a culture of intellectual honesty and rapid adaptation.⁴ That culture now drives Nvidia’s position at the frontier of artificial intelligence. 

Huang’s philosophy centers on failing fast and failing smart. When a project isn’t working, the discipline is to recognize it, name it honestly, and redirect. That kind of speed requires something many organisations systematically eliminate: the freedom to bring bad news. 

The Cost of Silence 

Business leaders often treat psychological safety as a cultural nicety, the kind of concept that surfaces in engagement surveys and gets deprioritised when revenue pressure returns.  

McKinsey analysis shows that only 43 per cent of employees report working in a positive team climate, and leadership style is the primary driver of whether that climate exists.¹ When employees believe that raising concerns or admitting mistakes will lead to punishment or ridicule, they stop doing it. Problems that could have been fixed early compound in silence. Experiments that could have generated learning either never happen or are buried without a record. 

The absence of psychological safety doesn’t mean employees stop noticing problems. It means they stop telling anyone about them.  For organizations managing fast-changing technology, global pressures, and teams dispersed across time zones and cultures, the stakes are higher still. These conditions generate complexity and uncertainty: more variables, more interdependencies, and more moments when no one has a clear answer. A leader’s ability to surface information from across the organization becomes the difference between early course correction and costly stagnation. Psychological safety is the mechanism that makes information flow.  

Building the Infrastructure for Honest Learning 

Telling people that failure is acceptable is not enough. The more precise problem lies in the gap between an organizations innovation capacity and its actual innovativeness. Capacity is what you build: the tools, processes, and infrastructure that make experimentation possible. Innovativeness is what you cultivate: the willingness to use those tools, surfacing real risks, naming what went wrong, and acting on the evidence. An organisation can have excellent processes on paper while its people conclude that using them honestly is too risky. When that happens, the infrastructure is in place, but it is essentially inert. 

Pre-mortems and post-mortems are two of the most effective tools in that infrastructure.  A pre-mortem runs before a project begins. The team imagines the initiative has already failed and works backward to identify why, using structured risk thinking. A well-designed pre-mortem also sets the parameters for a rigorous experiment: a clear hypothesis about what you are testing, defined scope, a realistic timeframe, and agreed criteria for what success looks like and, just as importantly, what stopping looks like. By surfacing potential failure points in advance and setting those boundaries explicitly, teams calibrate expectations before the work begins. When something does go wrong, it is less likely to feel like an unexpected disaster and more likely to be treated as information the team anticipated might emerge. The conversation shifts from “how could this happen?” to “we thought it might, and here is what we learned.” That shift alone changes how failure registers in a team’s experience. 

But a pre-mortem only works if people are willing to voice genuine concerns rather than optimistic projections. That is where innovativeness becomes the deciding factor. Psychological safety determines whether the pre-mortem is an honest risk inventory or a ritual that produces the answers people think leadership wants to hear. 

Post-mortems close the loop. After a project concludes, the team examines what happened against what was expected. Which assumptions held? Which signals were missed? The discipline is to separate facts from interpretations before analysis begins, preventing the most confident voice in the room from setting the account. A post-mortem that produces three specific things to do differently next time is worth more than an hour of attribution and blame. Done well, it converts a setback into an organisational asset and feeds directly into the design of the next experiment. 

The same dynamic applies: the post-mortem serves as a form of infrastructure. Whether it generates genuine learning depends entirely on whether people feel safe enough to say what they actually observed. 

This is why psychological safety is not a precondition for culture change in some abstract sense. It is the direct enabler of every practical tool in the innovation system. Build the capacity without cultivating the willingness, and the tools sit unused or are used performatively.  Cultivate the willingness without giving people structured tools, and positive intentions produce anxiety rather than learning. Both are necessary. Neither is sufficient alone.  

The Question Leaders Need to Answer 

The next failed project or missed target in your organisation is a test of leadership as much as the idea itself. It will reveal whether learning has practical value in your culture or whether self-protection remains the rational response to bringing bad news forward. 

What Huang demonstrates at Nvidia is that tolerance for failure does not accompany innovation. Failure produces it. Organisations that protect their people from that discomfort do not create safer cultures. They create cultures where problems hide, where experiments are too small to matter, and where the kind of breakthrough thinking they say they want never progresses far enough to be tested. 

Building a culture where failure is safe to admit is not about lowering standards. It is about creating the conditions where information moves and where experiments are designed with rigour. 

The organisations that get this right will be more adaptive, more innovative, and better equipped to navigate what comes next. The ones that don’t will keep saying they want innovation while steadily eliminating every condition that makes it possible.

About the Authors 

Barbara Salopek is an international innovation strategist, TEDx speaker, founder of Vinco Innovation, and lecturer at BI Norwegian Business School. With over 20 years of experience, she helps leaders turn innovation ambitions into results through strategy, culture, and people. She is the author of Future-Fit Innovation, a finalist in the 2026 International Book Awards. 

Dr. Melisa Buie is the co-author of Faceplant: FREE Yourself From Failure’s Funk, shortlisted for the Leadership Book of the Year 2026, as well as a speaker, facilitator, and organizational strategist with over 30 years of experience across industry, government, and academia. 

References 

1. McKinsey & Company. Psychological Safety and the Critical Role of Leadership Development. https://www.mckinsey.com/capabilities/people-and-organizational-performance/our-insights/psychological-safety-and-the-critical-role-of-leadership-development 

2. Gallup. State of the Global Workplace 2025 Report. https://www.gallup.com/workplace/349484/state-of-the-global-workplace.aspx 

3. Jensen Huang, speaking at the Stanford Institute for Economic Policy Research, March 2024. Reported by CNBC, 15 March 2024. https://www.cnbc.com/2024/03/15/nvidia-ceo-huang-at-stanford-pain-and-suffering-breeds-success.html 

4. Press.farm. The 6 Failures of Nvidia’s Jensen Huang. https://press.farm/the-6-failures-of-nvidias-jensen-huang