Another good reason to explore outrageous ideas is that they have the least competition in the marketplace. The Palm is a great example of this: Conventional wisdom (and venture capitalists) decreed that the handheld, pen-based computer was a failed concept. Jeff Hawkins and Donna Dubinsky went ahead in spite of the skepticism, and their competitors lost a lot of time discounting their success while the Palm device and operating system took hold in the marketplace.

Jeff and Donna were optimists -- and optimism really matters. We are so bad at predicting which new ideas will succeed and which will fail that sometimes the only practical thing to do is to encourage people to keep trying. The challenge for leaders is not only to hire and fund people who will be wrong most of the time about their wacko, deviant ideas, but also to know when they aren't wrong. There is one simple, proven, and powerful thing that you can do to increase the odds that a risky project will succeed: Convince yourself and everyone else that, with determination and persistence, the idea is destined to be a triumph. Some 500 studies on self-fulfilling prophecies demonstrate that confidence -- even misguided confidence -- helps people perform better.

On the other hand, the only thing that is more important than optimism is the capacity to pull the plug on a bad idea. The pharmaceutical company Novartis has a general policy of putting money on the table for each individual on a drug-development team who halts a development project. It's not a huge amount of money -- just enough to act as a countering force to the natural tendency to escalate commitment to a failing course of action. When it comes to innovation, the winning leadership attitude is a blend of cynicism and belief. Innovative people and organizations demonstrate tremendous conviction and passion when they're exploring new ideas, yet they also have the ability and instincts to move on to the next new thing. The key to sustainable success is not having the ability to invent new stuff; it's having the capacity to keep inventing new ways of thinking and behaving.

Polly LaBarre (plabarre@fastcompany.com) is a Fast Company senior editor based in New York. Contact Robert Sutton by email (bobsut@stanford.edu).

Sidebar: Want Innovation? 5 1/2 Weird Practices That Work

If you want to fill your company with great ideas, fill it with great people. And that, according to Stanford professor Robert Sutton, means welcoming weird people. Here are 5 ½ ways to do it.

Weird Idea #1. Hire slow learners of the organizational code. Specifically, hire people with a special kind of stupidity or stubbornness -- who avoid, ignore, or reject how things are "supposed to be done around here." Surround those slow learners with fast learners who understand how to promote their creative ideas.

Weird Idea #1 1/2. Hire people who make you uncomfortable -- even those whom you dislike. Once you've hired people who prompt discomfort, take extra care to listen to their ideas.

Weird Idea #2. Hire people whom you (probably) don't need. Interview and occasionally hire interesting or strange people with skills that your company doesn't need at the moment -- and might never need. Then ask them how they can help you. You might be surprised.

Weird Idea #3. Use job interviews to get new ideas, not just to screen candidates. Job interviews are a weak way to select employees. Still, there is a little-known benefit: They provide the opportunity to learn something new. Give job candidates problems that you can't solve. Listen as much as you can. Talk as little as you can.

Weird Idea #4. Encourage people to ignore superiors and peers. Hire defiant outsiders. Rather than teaching newcomers about company history or procedure, have the newcomers teach the old-timers how to think and act. Encourage people to drive you crazy by doing what they think is right rather than what they are told.

Weird Idea #5. Find happy people, and let them fight. If you want innovation, you need upbeat people who know the right way to battle. Avoid conflict during the earliest stages of the creative process, but encourage people to fight over ideas in the intermediate stages.