Booking.com isn’t afraid of a little competition. The global accommodation website has repeatedly transformed its business model to become an industry leader. Today, the site books about 1.5 million accommodations every single day.

Their secret? Never be afraid to fail.

At Booking.com, company leaders recognize that the best innovations emerge out of trial and error. That’s why they’ve made testing, experimentation and failure a part of everything they do. Even after the company was acquired for $135 million by the Priceline Group in 2005, Booking.com stayed true to this design-thinking inspired approach.

A 90 percent failure rate?

Harvard Business Review recently hosted a podcast with Harvard Business School professor Stefan Thomke, which discussed how Booking.com and other disruptive companies have used design thinking to stay ahead of competitors. Thomke focuses on their willingness to let teams try new ideas, even when the risk of failure is high.

Thomke notes that disregarding risk is not an easy attitude to embrace. In the podcast, he points to research which indicates that, regardless of team confidence, nine out of ten new ideas will fail.

That stat alone is enough to cause many CEOs to cling to the status quo, but Booking.com’s leaders see it as a reason to take more chances. “If you’re running 10,000 experiments, you’re still getting 1,000 right,” Thomke says.

Testing everything is the Name of the Game

Booking.com conducts comparative testing on every new feature on its website, comparing details from the selection of photos and content to button color and placement. By testing two versions against each other (A and B) and tracking customer response, the company is able to constantly improve their user experience and remove any glitches from the booking process.

The company’s developers also conduct extensive user interviews to understand consumer preferences and to anticipate their future needs. “We regularly visit our partners in person, which gives us the opportunity to observe both their daily struggles and successes,” explains developer James Butler in his blog. “We also take opportunities to create with them (because) working with our partners in co-creation sessions allows us to get to the bottom of issues they are facing, together, at the same time.”

Thomke argues that this design-thinking approach of embracing trial and error, experimentation and customer empathy are a big part of how any company drives innovation. The ability to tolerate failure is a dimension of innovation that many business leaders struggle with, but it’s among the most crucial. Booking.com knows this, and it has helped make them the third biggest ecommerce site in the world.

It may sound like a scary way to run a business, but if you want to be disruptive, you have to take risks.

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