Abstract
Although failure is a conceptual cornerstone for research on innovation, we know little about the diversity of how it transpires and its impacts on firms. We present a process model and typology of the diversity of innovation failure. The model uses process theorizing to show how two ‘types’ of failure (task and outcome) can occur within the innovation process. We then offer propositions on how a firm’s anticipation and value for these two types of failure can vary. Using the anticipation-value dimensions, we present a typology of four ‘modes’ of innovation failure. The four modes (and associated learning response) are inadvertent failures (prevent-alert-eliminate); hazardous failures (predict-modify-mitigate); fortuitous failures (probe-expose-extrapolate); and excursive failures (facilitate-analyze-harness). To validate and illustrate our models, we use video-ethnographic data. Together we provide an overarching framework for greater theoretical insight and stronger empirical rigor in studying innovation failure and how to learn and benefit from it.