By Phil Gibbs on August 9, 2010
Not many of us have a life goal of failing. Nor do we wake up in the morning and think, “I need a power breakfast because I’m going to fail today.” Neither do companies develop strategic plans that have a section labeled failure, although they probably have a section that addresses risks. Every business plan that asks people to invest definitely should outline the risks. We rarely talk or write about failure, much less predict it.
Now you are thinking, that’s kind of obvious. Yes, but the fact is that failure is all around us in our personal, professional and business lives. We need to talk about it, perhaps plan for it, certainly learn from it and maybe even manage it.
As a start, here are three things to consider about failure, with a focus on failure in the business context.
1. Success requires failure
We all have heard that we learn more from failure than success. The problem is that failure is not fun. In fact it is often very painful. But it is the pain that causes us to exert energy to learn and try to avoid future pain. This goes to the heart of learning and success. The executive who has never been fired may not be prepared for some tough situations. The company that has never been through lean times is probably not very efficient.
Failure is a prerequisite to success. Business has cycles. Lives have seasons. As utopian as they may sound, any organizational, social or political system that tries to eliminate failure also eliminates the opportunity for success. Never fall for the false promise of no more failure, but plan for and learn from failure.
2. Success increases the likelihood of failure
One statement I remember from a very prominent professor back in my graduate school days was that the most successful companies are the companies that are the most likely to fail. That seems counter intuitive, but you only have to think of the top tier companies that are either no longer around or are greatly diminished. When was the last time you ordered something from Montgomery Ward, or went into a Woolworth’s, or made a reservation on Trans World Airlines, or waited for a backordered Compaq computer?
So why are the most successful companies most likely to fail? It is actually pretty simple—they feel like they have the business figured out and then the environment around them changes. It always does. Extreme success decreases the likelihood that the changes will be perceived and adaptations made. After all, they are the best in the world, they may have invented the industry and they certainly know what the customers want.
3. Success at the expense of failure
Often success in one area comes at the expense of failure in other parts of our lives. This is especially true with extreme success. In fact we often say that success requires sacrifice. We can think of successful business people whose social lives are a mess, or financially successful people whose family life is in shambles. And there are people whose personal lives are wonderful but their business and financial lives could be considered a failure. So is this really success?
Balance in life is often advocated. In organizations we talk about optimizing the system. But ultimately this is a value question. What value do we put on our business, financial, family, social and spiritual lives? This is a value decision we all make, but should make intentionally.
4. Success is often just dumb luck
OK, I know I said three, but again I failed. And yes I know the saying, “The harder I work, the luckier I get.” But let’s admit it, sometimes success is just dumb luck. When we look around at really successful people, don’t we often ask, “How did she do it?” “He’s not that smart.” “He’s never has an original idea in his life.” Let me just say it, “Right place right time.” Now I have it off my chest.
While success sometimes is dumb luck, sustained success involves much more and almost always includes failure. If we know we are going to experience failure, we should think about managing it. Maybe we can coin a term, “managed failure”. It has a certain ring to it! I know you are thinking it reminds you of “managed healthcare”, but we won’t go there. More to come on managed failure later.
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