When you come across this phrase, what picture comes into your mind? To many, the picture of a donkey pulling a cart with huge pile of inflated sacks atop a steep hill would flash by. The fear is not of the overweight cart nor is it of the steep hill; the fear is of falling down. The fear is about failing. Failure is the heaviest load to carry and how we carry it decides whether we break down and fall into the dark well of gloom and self-pity or whether we rise again and tread the path to glory.
The fear of failure is worse than failure itself. When you say that you have failed, you still have gained the experience of the failure which comes handy in your next venture. But when you fear failure, you cannot focus on your present and hence you won’t learn anything from the journey making it a big disappointment.
This attitude of man is so critical in nature that it decides not only whether he would live a successful life personally but also whether he would be a proficient entrepreneur or a champion manager. Yes, the attitude to learn from the failures is what differentiates between the best and the ‘also exists’ organization. But how many organizations can actually ‘leave’ the path of success and stroll along the path of failure for even a brief moment. Not many, so to say. Unless of course, the organization believes that the synonym for failure isn’t disappointment or any other negative terminology. ‘Indeed, for a generation of managers weaned on the rigors of Six Sigma error-elimination programs, embracing failure is close to blasphemy.’, says Stefan H. Thomke, a professor at Harvard Business School.
Granted, not all failures are praiseworthy. Some flops are just that: bad ideas. The eVilla, Sony Corp.’s $500 ‘Internet appliance’, the Pontiac Aztek, General Motors Corp.’s ugly duckling ‘crossover’ SUV.
But intelligent failures - those that happen early and inexpensively and that contribute new insights about your customers - should be more than just tolerable. They should be encouraged. Figuring out how to master this process of failing fast and failing cheap and fumbling toward success is probably the most important thing companies have to get good at.
Organizations need to ‘get good’ at failures. It means designing ways to measure performance that balance accountability with the freedom to make mistakes. People may fear failure, but they fear the consequences of it even more. “The performance culture really is in deep conflict with the learning culture”, says Paul J. H. Schoemaker, CEO of consulting firm, Decision Strategies International Inc.
Some organizations have tried to measure performance in a way that accounts for these opposing pressures. At IBM Research, engineers are evaluated on both one and three-year time frames. The one-year term determines the bonus, while the three-year period decides rank and salary. The longer frame can help neutralize a year of setbacks.
In addition to making sure performance evaluations take a long-term view, managers should also think about celebrating smart failures by throwing ‘failure parties’ to recognize failures to be a part of the creative process. Most companies, however, don’t spend enough time and resources looking backward. That's a mistake. How do we learn if we don't examine the past?
Taking failures in their stride and utilising them as fire-power makes all the difference between ‘a’ man and ‘the’ man. He failed in business in 1931; Defeated for the legislature in 1932; Again failed in business in 1934; Had a nervous breakdown in 1936; Defeated in election in 1938; Defeated for Congress in 1943, ’46 and ’48; Defeated for Senate in 1955. Defeated for Vice President in 1956; Defeated for Senate again in 1958; Elected President in 1960. This man was Abraham Lincoln.
The founder of G.E., the largest conglomerate of the World, Thomas Alva Edison once remarked about one of his experiment which fell apart: ‘I have not failed, I have just found out 10,000 ways that don’t work’.
When the Vice President of Google, Sheryl Sandberg, apologised for an error because of which the company lost a few millions, Larry Page, Google's co-founder and unofficial thought leader remarked, ‘I'm so glad you made this mistake, because I want to run a company where we are moving too quickly and doing too much, not being too cautious and doing too little. If we don't have any of these mistakes, we're just not taking enough risk’.
In the 1950s the Jacuzzi brothers invented a whirlpool bath to treat people with arthritis. Although the product worked, it was a sales flop. Very few people in the target market, sufferers from arthritis, could afford the expensive bath. So the idea languished until they tried re-launching the same product for a different market – as a luxury item for the wealthy. It became a big success.
Many costly Microsoft product failures provided the learning and opportunity for development of many of Microsoft's biggest successes. Examples include:
a) Many apparently wasted years working on a failed database called Omega resulted in the development of the most popular desktop database, Microsoft Access.
b) Millions of dollars and countless hours invested in a joint operating system project with IBM that was discontinued led to the operating system Windows NT.
c) A failed multiplan spreadsheet that made little headway against Lotus 1-2-3 provided learning that helped in the development of Microsoft Excel, an advanced graphic spreadsheet that leads the competition.
‘At Dell, innovation is all about taking risks and learning from failure’, writes Michael Dell, the Founder & CEO of Dell Computer Corporation. Back in 1989, the personal computer industry was making the transition to a new type of memory chip, and found ourselves stuck with far too many of the old kind. That was a costly mistake, and it took them about a year to recover, but they learned from it. ‘The failure led us to develop a new way to manage inventory, and we went from being last place in the minor leagues to where we now win the World Series every year.’
Most people naturally seek positive outcomes and set about trying to prove that an experiment works. But designers, inventors, and scientists, all models for companies struggling to be more creative, take the opposite tack. They try to prove themselves wrong. That focus on potential flaws makes failure, and the lessons that come with it, happen earlier. Amy Edmondson, a professor at Harvard Business School who has studied how organizations learn from failure, says managers would do well to think more like scientists. “Failure provides more ‘learning’, in a strictly logical or technical sense, than success”, she says. “It’s a principle of the scientific method that you can only disconfirm (never confirm) a hypothesis.”
Failure's capacity to teach is exactly why venture capitalists often look for managers to run start-ups whose resumes include experience with a flop. Gordon McCallum, CEO of Virgin Management Ltd., can point to managers within Virgin who might have been overlooked by other companies because of failures in their careers. He’s also quick to note that errors on the job, as long as they aren’t repeated, are not only supported, but valued.
A company’s reaction in the face of intelligent failures can send tremors or thrills through a culture. If top executives are accepting, people will embrace risk. But if managers react harshly, people will retreat from it.
Failure is crucial without which breakthrough innovation - an imperative in today's globally competitive world - is so extraordinarily hard. It requires well-honed organizations built for efficiency and speed to do what feels unnatural: Explore; Experiment; Foul up, sometimes. Then repeat.
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