By Matthew Egan
Companies say they value risk-takers, but reward systems often punish the experimentation, setbacks and learning that drive meaningful breakthroughs.
Organisations often celebrate innovation and risk-taking, yet their performance systems can quietly reward the opposite: predictable delivery, minimal setbacks and projects that look successful from the outset. Matthew Egan, Transformation Consultant with Microsoft, argues that leaders need to look beyond snapshots of performance and recognise the learning and progress hidden within unfinished work. The real test of a risk-taking culture, he suggests, is whether organisations reward the journey of experimentation and learning before success becomes visible.
In the autumn of 1878, Thomas Edison had a problem. He’d promised the world an electric light bulb, and investors – including J.P. Morgan and the Vanderbilt family – had poured money into the company formed to bring it to market. But deep in his Menlo Park laboratory, every bulb his team built burned out within minutes. Months in, there was no working product. Judged in that moment, by anyone reviewing his progress, this was failure. Not perceived failure – failure, full stop, by every measure available at the time.
Most people know how the story ends: Edison and his team eventually found a filament that held, and the company built on that unfinished stretch of work went on to change how the world lights itself. He’s often quoted as saying something to the effect of “I have not failed, I’ve just found many ways that won’t work” – the exact wording has blurred over the retellings, but the sentiment holds. What looked, in the autumn of 1878, like unambiguous failure turned out, with a few more months attached, to be the middle of a success story. The event didn’t change. Only the point at which someone chose to judge it did.
Most companies would say, without hesitation, that they want people willing to work through that kind of stretch: bold experimenters, prepared to be judged as failing on the way to a breakthrough. Yet very few would recognise that the way they actually measure and reward performance – in reviews, in meetings, in the stories leaders tell from the stage – is built to catch people at exactly the wrong moment. Not partway through a real attempt, when it still looks like failure, but only once the dust has settled into a clean, uneventful result. We say we want risk-takers. We reward the appearance of never having failed. And our best people are far too smart not to notice the difference.
The risk-taker your systems mistake for a failure
Picture two people on your team a year from now. One attempted something ambitious, hit real setbacks, adjusted based on what each one taught them, and is visibly closer to something valuable than they were twelve months ago – though they can’t yet point to a finished result. Reviewed today, this looks like failure. The other delivered a spotless, on-time, zero-surprise record by only ever attempting what was already safe to attempt. On a standard scorecard, the second person wins easily. The first is marked down for something that hasn’t finished happening yet.
But look at what produced each record. The “perfect” year likely came from narrow scope and modest ambition – nothing genuinely new attempted, nothing that could be mistaken for failure along the way. The unfinished one may be a Menlo Park in miniature: a stretch of real, visible failure that’s exactly the kind of thing that eventually pays off, if it’s given the chance to run its course. One of these people is quietly stalling behind a perfect record. The other is being penalised for a failure that, given time, may not turn out to be one at all. Most reward systems can’t tell the difference, because they were built to judge whatever’s in front of them right now, not what it might become.
Reward the trajectory, not the snapshot
The fix isn’t simply to tolerate failure, or to stop penalising it. That only gets you to neutral – a workplace where risk is no longer punished, but isn’t actively encouraged either. The real shift is to reward something more specific: evidence of learning and progress, wherever it turns up, whether or not it’s wrapped in a finished result.
That’s a different question to ask than “did this fail or succeed?” It’s: has this person learned something real since the last time you looked, and has that learning visibly changed what they do next? Edison’s forty-first attempt wasn’t just another try – it was informed by everything the previous forty had ruled out. That’s not resilience for its own sake; it’s progress, just measured in a currency most reward systems don’t know how to count.
This is where it needs to show up: who gets the enthusiastic nod in a Monday meeting – the person with a clean update, or the person who can show exactly what last month’s setback taught them and what they’re doing differently as a result? Whose project becomes the case study in the town hall deck – only ever the finished win, or sometimes the one where the story is “here’s what we learned and where that’s taking us”? Who gets the next stretch assignment – the safe pair of hands, or the person who’s just demonstrated they can turn a setback into a sharper next attempt? Every one of these is a chance to reward learning and progress directly, rather than waiting for a tidy result to reward instead.
Perfect delivery isn’t always the safer bet
Reid Hoffman’s early LinkedIn is a good illustration of why this matters. The 2003 launch was so incomplete he added “early adopter” to every profile as a kind of pre-emptive apology – no attachments, no basic features anyone would expect from a professional network. Judged in that moment, on any conventional scorecard, this reads as a failure to ship a finished product. What actually mattered was the learning it produced: real user feedback that built the platform that eventually mattered, rather than months spent perfecting features nobody had asked for. Hoffman later put it plainly: if you’re not embarrassed by your first release, you’ve launched too late. The embarrassment was the price of learning something a polished launch never would have taught him.
What to actually look for
None of this requires a new HR framework. It requires a shift in what you’re scanning for in the small daily moments where performance gets recognised – from “did this land cleanly?” to “what has this person learned, and where is it taking them?”
In reviews, ask what someone has learned since the last conversation, and what they’re doing differently as a result – before asking whether the project has landed yet.
In meetings, notice what earns the praise. Is it always the clean result, or does someone get credit for a sharper second attempt, built on a setback they’ve clearly understood?
In company updates look at whose story gets told. A case study built entirely around flawless wins teaches the room to hide their learning curve; one that traces a setback into genuine progress teaches them to show it.
Each of these is a small, repeatable choice. None costs anything to change. But together they are the actual mechanism by which a culture is built – far more than the words in the company values statement.
The real test
Edison’s backers didn’t pull their funding in the autumn of 1878, even though what they were looking at, by every available measure, was failure. What kept their faith wasn’t blind tolerance of failure for its own sake – it was visible evidence that each attempt was teaching Edison’s team something the last one hadn’t. The uncomfortable question every leader should ask isn’t whether the strategy documents mention risk-taking. It’s whether your reward systems are actually built to spot learning and progress in an unfinished project – or whether they only know how to reward the moment it finally looks done.
Matthew Egan
