What exactly is “failure” and how can we use it to succeed in Business?

It is bad to fail, yeah? Especially at work or in your business? Should we feel that failure is shameful, demonstrates you, your team or your organisation aren’t good enough?

Well what if I told you that we can use failure to be much more successful than you have ever been before?

Firstly we should define exactly what is failure:

“A business failure is defined as a business that closes or ceases operations, causing the creditors to lose money.”

According to UpCounsel.com the above definition is considered failure and I agree, in fact we do work every day to ensure that type of preventable failure doesn’t occur. However when we think of failure we more often think of times when we say the wrong thing to a client, miss the monthly sales target or project deadline. So let’s clarify what are the different types of failure so we can be clear on what failure is and the mindset we use with failure.

According to ,Entrepenur.com there are three key types of failure:

Preventable Failures:

These failures are the ones which are major and for example result in a business ceasing operations. Almost always business failure is preventable if the business was originally created with sound foundations and the key people in the company learn from the many intelligent failures they encountered through their journey.

Unavoidable Failures:

These are often situations a business has no control over like a pandemic or climate change. In business we need to be aware of risks and either mitigate for them or design our business to be resilient so it can be able to absorb unavoidable failures. For example if we have a single point of contact for a key client and that key employee leaves we can, in out minds, think it was unavoidable however ensuring there is a second employee who could step in is risk mitigation, creating a resilient business plus improving service for the key client.

Intelligent Failures:

These are the best kind, they happen fast and mostly don’t consume too many resources. Preferably we are clear on the boundaries the failure is likely to fail in and from which refer to in a ‘trial & error’ approach. These failures are as small as AB testing on websites or doing a pilot launch of a new product.

The first two types often have high impact and the Preventable Failures often are the result of not learning from the cumulative Intelligent Failures within an organisation which are very likely to have been occurring for a while prior to the major failure of ceasing operations.

So if Preventable Failures often are the result of not been aware of ongoing Intelligent Failures, what has been going on? Often when we were children we were raised to not ever “fail”, to look up to the kids that “succeeded” and to hide our feelings of shame when we didn’t win the game or get the scores we or our parents thought we should. When this behaviour occurs, what happens is we create our own ways to move past those feelings of shame as quickly as possible and very often we don’t realise there is an opportunity to learn from the failure – so we don’t reflect. Since we haven’t learnt the behaviour to grow by reflection of why we failed, we repeat that behaviour as an adult at work/in business where this behaviour has often also reinforced by the traditional command and control leadership style which mostly is low on empathy.

To add another dimension here, you may be aware of how difficult it can be to implement Change in a business especially when there has been little significant change in organisation for a number of years. According to ,J. Stewart Black who wrote “,It Starts with One” there are three key barriers to effectively implementing Change and the second one after “the Failure to See” is the “Failure to Move”. Black says that this second barrier is driven by people who may know that change has to happen and what needs to happen but they don’t move as they fear having to do the new thing badly – they fear their reputations will be worse off if they fail at the new thing. This fear can be exacerbated if they perceive the environment is not ‘safe’ for them to fail in. Therefore in places where the leadership doesn’t create a safe place to fail whilst implementing significant change and where the behaviour of learning through reflection on failure isn’t encouraged then that organisation will have a significant challenge.

How can businesses use failure to actually create success?

A couple of points have been suggested already though in summary what business can do to create success out of failure is:

  1. For the leaders to not only be aware that we, the team and the organisation learn the most after reflecting on intelligent failures but also to encourage learning within the key areas. Learning isn’t just about becoming more aware of how to do something better, it’s also about what out clients preferences are, how our team can best work together or actively listening to your direct report about their concerns (empathy).
  2. For leaders to create a safe space for people to fail. This means ensuring no one is punished for intelligent failure (excluding unethical or ongoing failures) plus a culture to reflect and learn at multiple levels in the organisation from the intelligent failures.
  3. For the culture of the organisation to realise that people, process & respond to failure differently. So some people may need time out or sometimes they can dive straight back in, however the failure always needs to be worked through and never ignored. That is the fear needs to be tackled head on.

What is success in business?

Almost every business owner will have their own definition of success however what generally is success?

A personal definition is to create a business that has a sustainable existence. This may be taken as broad however I believe that for a business to be sustainable it needs to:

  • Work load has to be sustainable, some months will be stretched and others not however all people who work with the business must want to return the next day or week.
  • Business growth is sustainable and is continuous. Growth is not just financial metrics or the number of employee’s but also the business improves its knowledge and ability to learn.
  • Client’s and the business grow together similar to a couple’s relationship.

For businesses to succeed they have to be able to learn from their failures each and every day, it has to become a habit. If you don’t then you’re likely to not grow and if you don’t grow you’re starting to die.

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