Ford CEO Alan Mulally behaved radically to kick-start Ford’s recovery: At the annual company meeting of the top 500 leaders, he included in the many awards a special, first-of-its kind award: Failure of the Year.

He called out the winner, and invited him to the stage to receive his award… and to underline his commitment to trying radically, especially when it led to failure! Since the quiet buzz in most organizations pushes for success, it pushes for ‘not-fail’ also. ‘Not-fail’ can’t live with ‘innovate radically’: one will eat the other.

How to ramp up problem-solving to innovation? Make it safe to fail. Reward trying, not results. Watch the performance jump! Look closely at how you and your top leaders react to failure, because all your people are watching.

Here’s a 2-step process that works: 1. Acknowledge the failure. 2. Encourage the effort, not the result. Here’s the language:

1) “That didn’t work like we hoped, did it?”

2) “Nice job of analyzing the problem. Your answer sure made sense. Keep on thinking and trying your best ideas….we’ll make progress that way.” Or:

1) “That one didn’t do so well did it.”

2) “I like how you dug down to see what was really going on. That’s a great approach. I can’t wait to see what you dig up next!”

You’ll be applauding the results, and your people will love it!