Embrace Failure As An Inevitable Option
Cook
For many companies, avoiding failure is a standard operating procedure. The unfortunate side effect of avoiding failure is avoiding risk. If you accept the fact that failure will occur, then your ability to expand your options and take risk grows dramatically.
What you do with failure makes all the difference. First and foremost, when something is going bad, stop doing it. If you're losing money on a product or service, stop offering it. If a marketing tactic is not working, stop using it. If a new strategy is producing little results, stop implementing it.
When you stop, you have a few options open before you. You can change or modify what you were doing, or drop it completely. The option you choose often depends on the "autopsy" of the failure. Look at the financial impact. The size of the loss will frequently make your choice obvious. If you missed the mark entirely, and the returns are abysmal, then dropping the approach entirely is usually a good thing. If your results indicate some level of success, but not the returns you originally wanted, then modifications might be in order.
When modifications are a consideration, analyze the strategy and the execution. Strategy can be either appropriate or inappropriate; execution can be either good or bad. When both elements match up, decisions are easy.
• If the strategy is appropriate and the execution is good, continue forward because you're succeeding.
• If the strategy is inappropriate and the execution is poor, you've got a big failure on your hands. Just drop it.
But when the mismatches occur, decisions can be tough.
• If the strategy is inappropriate, but the execution is good, you're gambling. Good execution can mitigate poor strategy, producing some level of success. Or, good execution can accelerate a poor strategy, hastening failure.
• If the strategy is appropriate but the execution is poor, you could have trouble. Poor execution hampers a good strategy, leaving management in the dark because it cannot assess the adequacy of a strategy.
When faced with a decision about modifications, look first to implementation problems and fix them. Take the time to distinguish implementation problems from strategic problems, and make sure your execution is solid. Without this, you can never know if the strategy is sound. With solid execution, you can clearly assess the strength of the strategy.
The "face" you put on failure is also important. When something does go wrong, admit your mistakes. If you messed up with a customer, admit the mistake, apologize, and fix it. Respect the intelligence and integrity of the customer, as well as the marketplace. If you try to hide things, they eventually find out. When they do, their resentment will be stronger because of the deceit, not the original mistake.
Employee interaction and consequences are also critical. Accept that employees will make mistakes. Have processes in place that minimize the risk of the same mistake occurring again. Leverage failure to learn and train, as well as to emphasize accountability. This is important because if no one is accountable for the failure not occurring again, then it inevitably will occur again.
If you believe in the "sandbox wisdom" that the best lessons come from mistakes you make, then failure in business should be accepted and leveraged. Failure is inevitable. What you do with it makes all the difference.
Ken Cook is founder and managing director of Peer to Peer Advisors and developer of the Relationship Based Business Development System. For details on this approach to business development, visit www.peertopeeradvisors.com.
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