Admit Failure Early
Originally posted on Linkedin
I’m sure everyone has heard from their parents, religious teachings, seminars, books, whatever it is – that failure is just a stepping stone towards success. It is undoubtedly true and I’m not going to debate on that. The fact of the matter is, just knowing this is not enough. It’s not going to bring you anywhere, and it’s not going to help you achieve your dreams.
People are afraid to fail. We’ve been conditioned since young that it’s a bad thing. Failed a test in school? Be prepared for the spanking that awaits you at home. Want to start up a new business? Don’t fail if not you’re going to lose all your money AND your investors’/family’/friends’ money.
We need to change that mind-set. Failure doesn’t mean that you suck, or you don’t know how to do anything. Failure, under all its ugliness and negativity, is just simply feedback. It’s from this feedback that we should extract the lessons, learn from them, and apply it to your next step in life.
It Can be Costly
What’s even harder than admitting that you have failed, is to admit it early. Reluctance, or even stubbornness, to admit failures early, can prove costly. Tim Ogilvie says, “It’s important for businesses, especially start-ups, to conduct trial-and-error experiments that yield results in a reasonable time frame--30 days, say, rather than several months.”
“Identifying failure early,” he points out, “is preferable to burning through 90 percent of initial capital before figuring out what's not working.” He views an entrepreneur's reaction to failure as yet another valuable skill required to keep a company moving forward.
Create a Culture of Sharing Failures
When Alan Mulally first started as Ford’s CEO, he challenged the members of his team to give an assessment of their businesses as a “green”, “yellow”, or “red” light. They all came back with “green” lights, which prompted Mulally to ask the members to come back again next week with a more realistic assessment.
The first person that came back and stood up to say that he had a “red light” was met with a standing ovation from Mulally. They then sat down and together, brainstormed to overcome that problem as a team.
We should all learn from Mulally. He wanted to create a new culture where people were not afraid of admitting that something that went wrong, and admitting it early. This was to ensure that the organization could have time to come to together and have an impact on the outcome.
People are afraid to fail, so understandably, people are also afraid to take risks. Know the saying “big risks, big rewards”? When your employees are so scared to take risks, they will play it safe. And playing safe will not bring your company growth. Yes it could go both ways – a risk could go horribly wrong resulting in losses, but it could also go brilliantly, leading your company to see growths and revenues it has never seen before.
An organization decided that they should start rewarding risk takers. Executives started highlighting the various risks people too. Whatever the result of that risk was – whether a success or failure – they celebrated it. This way, people took risks that were meaningful. Otherwise, they would not act unless they thought there was a high chance of success.
The brilliance of this is that it also weeds out early failures and lets your organization learn together from that mistake. Better yet, it will bring your employees together over a success.
Don’t be afraid of failing, and don’t be afraid of admitting to it early. Like Thomas Edison said, “I have not failed. I’ve just found 10,000 ways that won’t work.”
Besides being the CFO at Tradition, I'm also the founder shareholder of Jai Financial and Blake-Dair Consulting.