As counterintuitive as it may seem, failure is an important part of business success. So, if a product doesn’t sell or a key hire doesn’t perform, don’t fret: Your missteps provide you with opportunities to learn and grow as an entrepreneur.
“Failure is underrated,” asserts Steve Rigell, president of consulting firm Peemptis. “The best lessons come from failing. When we succeed the first time, the only thing we’ve learned is what works in that situation, [whereas] the richness of learning what doesn’t work is available as a reference in many subsequent experiences.”
Rigell points to American inventor Thomas Edison as having the right mind-set. Edison’s experiments were often failures, but he never regarded them as such. After many unsuccessful attempts at creating a light bulb, he chalked up his struggles to experience: “If I find 10,000 ways something won’t work, I haven’t failed. I am not discouraged, because every wrong attempt discarded is another step.”
Truth is, failure is part of doing business. “Most failures caused by small-business owners are usually based on lack of business experience, guidance, mentors, training, and support,” notes Peter Tourian, CEO and founder of Araya Clean Property Services.
Here’s why you need to redefine failure, along with some tips for using it to your advantage as a small-business owner.
Leaders need to recognize their errors and accept their shortcomings. After all, continuing to use the same unsuccessful strategies is futile. When it becomes clear that you’ve failed at something, embrace it.
“Far too many leaders do not know how to admit failure. They blame others, or the environment, or even bad luck,” says Gerry Czarnecki, author of Take Two and Call Me in the Morning: Prescriptions for a Leadership Headache.
“How you respond to failures is way bigger than how you failed,” says Jim Grew, president of the Grew Co., a strategy and leadership consultancy.
Don’t dwell on the negative, he advises. Instead, use the failure as an opportunity to start a new project, find a better employee, or improve a product design. When things don’t go as planned, analyze what went wrong and why. Think about what you will do differently next time and what you can do now to recover.
Simply put, redefine failure. “Sometimes a failure is the best thing that can happen to a company,” says Susan Baroncini-Moe, founder of Business in Blue Jeans, a marketing and consulting firm. “For example, if you hire someone who turns out to be a terrible fit, you can learn so much about what you missed in that initial hiring experience that you never make the same mistake again.”
Don’t take missteps personally, either, says Rick Bisio, author of The Educated Franchisee. “Just because the project or the employee was a failure, it does not mean that you are a failure. There must always be a separation between the event that did not work and the personal sense of worth. The difference can be summarized in ‘It failed’ vs. ‘I failed.’”
Learn and Move On
Mike Samson, co-founder of CrowdSpring, an online marketplace for creative services, offers his company’s story as an example. CrowdSpring built and launched a website, but it couldn’t fully scale its operations as traffic and registration increased. The site was slow and sometimes crashed. People were frustrated.
“We were an e-commerce business, and we couldn’t handle our traffic or customer service,” Samson explains. The underlying problems were related to the site’s basic code and content management system, he says. CrowdSpring tried to put Band-Aids on the problem, but those were only temporary fixes. “We eventually had to … rewrite everything, take a couple of steps back, and do it right. This caused major issues with our creative community.”
The lessons learned were priceless. “Full transparency builds real trust and true respect. Question your assumptions, always. Do the right thing, even if it hurts you. Focus,” Samson says.
Another takeaway: “Customer service is one of the most important competitive advantages,” he says. “Poor reputation for customer service has even forced large companies to completely change their branding. Look hard at exactly what people are contacting you about and consider this data when making decisions on improvements, new features, services, and policies.”
As Josh Denton of Denton Consulting Group notes, “If a company is not failing at something, it’s not trying. Products fail. Key people leave. Industries implode. Failure does not have to equate to gloom. Go forward.”
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.
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