The benefits of courting business failure

June 28, 2012, 3:08 PM UTC

FORTUNE — We were in the rooftop bar just a few hours before it was strictly decent to be there. But with the news we’d just received, who could blame us?

I had to push a client to the breaking point while still keeping him on my side, encourage my creative colleagues to keep pushing the boundaries while keeping them from heading off the roof from feeling that their integrity was being compromised, and I had to do it all in the backdrop of a huge European regional meeting we had called.

Paul Smith, the regional creative director for Ogilvy & Mather’s offices in Europe, the Middle East, and Africa, sat hunched over his drink. Chris Garbutt, executive creative director for the Paris office, paced back and forth, frustrated and disappointed. As worldwide chief creative officer, I needed to figure out how to solve this problem.

We had all convened in Vienna, a city that can claim an embarrassingly large share of responsibility for Western culture’s great achievements. Dozens of creative directors had come together for three intense days of critique and sharing ideas.

Managing a creative team is like building with mercury — structurally unsound and toxic.  So instead of trying to construct creativity, as if it were a kind of widget you can build, I try to create the best possible environment for it to grow. Face-to-face meetings are the best occasions for me to lay the groundwork for this kind of environment.

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And here, right in the middle of one of those cherished meetings, dropped a creative problem of the first magnitude. Chris had taken things well into the unknown, just as he ought to. He and his team in Paris had produced an impressive commercial for a major beverage brand with an upscale and slightly conservative image. The film had been in the works for three years. The team scrimped on each expense to pour every cent of the budget into the commercial, and they still ran out of money. They were teetering on the edge of failure or even outright, expensive disaster. With some budgetary acrobatics, our global CEO Miles Young and I found them another $80,000 to work with, and I’m glad we did. It was the kind of film that wins acclaim — and more importantly, rings the till.

The client loved the film, too. Well, most of it. But one scene took things too far for them. The week before, I flew to the client’s European headquarters with Ogilvy’s regional chairman Daniel Sicouri to sell the commercial. Screw the money. We thought this was brilliant creative, and we had to convince them. Any reasonable person would wonder why we didn’t just instantly cave and cut the offending scene. It was just two seconds of footage, and the client hated it. Why stake so much on it?

We resisted because those few seconds of film took the commercial from being great to being dangerous. Those seconds seemed longer than they really were since they displayed a scene of visceral and conspicuous extravagance in the midst of a global recession. That moment was where the film went so far out there that it courted failure.

The greatest creative work exists on the edge of what was thought to be possible. If you have a frame of reference to judge your work, I tell people, then you have not ventured far enough into the unknown. We were all here in Vienna talking about that right now, and I was terribly worried that the client wasn’t ready to march with us.

My worries were not misplaced. Paul pulled me aside and said, “We’ve got to cut that scene.” My reaction was less than polite, but it was downright chaste compared to Chris’s. We headed for the bar, cornering Daniel to insist on one final appeal to the client by phone, not one of us envying him his job. We waited there as a half-hour dragged into an hour. I already knew the answer was no, but we had to try. I had to stand up for the integrity of the team I had led into this perilous creative, and now political, territory. I had to defend not just the work but also my team’s willingness to take a risk.

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Chris and Paul were just as adamant. They knew, as I did, that those fleeting images were the difference between good work and work that was worth three years of effort. That scene was what made it worthy of an award, and that would make the film more effective for the client. Creatively awarded work sells 11 times more than non-awarded creative work, according to a 2010 study by Thinkbox and the UK-based Institute of Practitioners in Advertising.

Creative management is often a chaotic process filled with tremendous risk. We don’t know the answers in advance. A combination of honed gut instinct and analysis allows us to experiment to find what will work. When someone runs into a sharp elbow, every creative leader knows he or she must stand up for the work and praise the impulse that gave birth to it.

Daniel came out of the lift with a face full of no. Chris stalked off, upset because he had risked so much and had been burned. We couldn’t sell the scene we wanted, and it was his work that was poorer because of it. He came around soon after, with a back-up scene to slot in, pushing to take it to the edge, ready to get torched all over again. Insistent, he was back in my face, determined to find a way to make it great, consequences be damned. Clearly, he had learned nothing from the client’s reaction. After a moment, I realized that was the perfect lesson to absorb.

Tham Khai Meng is worldwide chief creative officer of Ogilvy & Mather and chairman of its Worldwide Creative Council. He recently served as jury president for the film and print categories at the Cannes Lion International Festival of Creativity this past June.