Acknowledge what went wrong and recognise that set-backs can lead to success
AS A general rule, the US Marines will act if they are 70 per cent sure of a decision. Like in business, there are no guarantees of success, but there are times when you need to act anyway. Failure is never an easy pill to swallow, but it can be constructive if you recognise your mistakes and improve upon them in the future. Here are three tips for bouncing back.
DON’T TAKE IT PERSONALLY
After a set-back, you should suspend feelings of anger and regret to analyse the causes of failure objectively, chief executive of the Authentic Leadership Alliance Susan Tardanico told Forbes. “Why did you fail? What might have produced a better outcome? Was the failure completely beyond your control? After gathering the facts, step back and ask yourself, what did I learn from this?”
Leadership coach Peter Bregman actually sees strategic value in claiming responsibility “for anything you’re even remotely responsible for”. He told the Harvard Business Review how “this solution transforms all the negative consequences of blaming others into positive ones. It solidifies relationships, improves your credibility, makes you and others happy, reinforces transparency, improves self-esteem, increases learning, and solves problems.”
ACCEPT THE INEVITABILITY OF RISK
The key is to accept that failure may happen and make more calculated decisions in the future.
“Many of us started with a binary approach to risk and failure: it doesn’t apply to me; I will not be the one who fails,” said management consultant Katarina Skoberne, speaking of her own failure to Management Today. “It is typical of youth and typical of entrepreneurial personalities to believe the rules of risk don’t apply to them.”
But it is equally important to recognise that data analytics and statistically “rational” decision-making models will never eradicate risk completely. Cognitive psychologist and author Gerd Gigerenzer argues that following rules of thumb (heuristics) can often lead to more optimal outcomes than assessing risk through data. This is because it is difficult to assess statistics in a vacuum. Conditional probabilities can confuse and mislead.
Failure can seem personal but most business leaders agree that bad ideas are necessary to weed out flaws and create something robust in the long term. The notion of “failing forward” is embraced in Silicon Valley and particularly in the creative industries. Apple may have posted the biggest quarterly profit in history earlier this year, but it has born some rotten fruit in the past. Think of the G4 Cube and Apple TV (both of which made it to the market).
Gambles must be made to break new ground, but there are ways to contain contagion. Bain & Company’s Chris Zook has recommended keeping potential failures close to a company’s core business “perhaps by introducing existing products into new markets” or vice-versa.
Once an idea is in development, it can be tempting to throw good money after bad. It is crucial to know when to cut your losses. Being burnt once will make it easier to recognise an escalation of commitment in the future and ensure that you don’t become too attached to any one iteration of your idea.
Speaking to Entrepreneur, chief executive of Peer Insight Tim Ogilvie recommends that young businesses conduct trial-and-error experiments which produce results quickly, ideally within one month, to identify failures early on and limit costs. This cautious method, he says, is a preferable alternative to wasting 90 per cent of initial capital.
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