From an evolutionary perspective, failures of imagination and missed opportunities to learn from experimentation are as potentially harmful for the health system as failures of practice. The conundrum is encapsulated in the fact that while commentators are steadfast about the need on the part of the stewards of the health system to avoid any waste of public dollars, they are also insistent about the need for innovation. There is tension between these two imperatives that is often unrecognized: the pursuit of efficiency, narrowly defined, can crowd out the goal of innovation by insisting on the elimination of "good waste" (the costs of experimentation) as well as "bad waste" (the costs of inefficiency) (Potts 2009). This tension is mirrored in the two broad drivers of performance reporting in health systems: public accountability and quality improvement. Health organizations, predominantly funded by public funds, are necessarily accountable for the ways in which those funds are used and outcomes achieved. This paper reviews how accountability relationships should be re-examined to create room for "good failure" and to ensure that system accountability does not become a barrier to performance improvement.