Much has been written on the impact of failures, but a recent interview got me to thinking a bit more about this and I thought I might pass along what I came to in my thinking on it.
In an interview the other day, I was asked about mistakes I had made and what I had learned. The discussion then branched out into the role of mistakes and failures in a business. What I ultimately came to was that mistakes, including failures, are opportunities.
I say this because mistakes are a major source of learning. In many ways, life is about coming up against obstacles, challenges or problems and then trying to overcome or solve them. Imagine a life in which you had none. Pretty boring in my view. It would be a life in which nothing new came before you, no unexpected bend in the road, nothing to raise your heart rate.
So, what role do mistakes or failure play in a business? Well, first, to remain in business over the long term, you have to be continually re-inventing yourself. Your customers’ needs change. Competitors come, go and are changing. Staying where you are threatens the continued existence of the business.
But trying something new has inherent risks. Did you really understand what the customer needed? Did your new design really solve their problem or enhance the value of your business? Or, did you miscalculate or fail to execute well? You will never bat 1000% on change efforts. But, you can learn from them and ultimately navigate to a change that does improve and save the business.
The real challenge lies in how you treat failure. As CEO or board member, do you create an environment that encourages innovation even though there is the risk of failure? Or, do those in your organization who experiment learn that they are better off staying the course regardless of where it is ultimately leading, rather than trying innovations or taking risks?
I am reminded of the famous story involving the legendary Thomas Watson, CEO of IBM. He once hired a young man out of business school and charged him with a project to introduce a new product. The effort failed. The young man got a call from Watson’s secretary to schedule an appointment with Watson for the next day. The young man went home and told his wife to call the realtor and movers as likely he would be fired tomorrow. Watson initiated the meeting the next day with, “young man, I’d like to talk to you about your next project.” The young man replied, “Mr. Watson, do you know who I am?”. Watson responded, “Of course”. “Well I thought I would be fired in this meeting because of the failure of my project.” Watson replied, “young man, I just invested $1M in your education, I am not about to fire you. I want a return on my investment.”
Understanding and honoring the value of mistakes and failure is challenging on a business-wide scale, but also challenging for supervisors at all levels. Delegation involves letting go. Once delegated, a task may not be done “your way”, and there will inevitably be mistakes. Can you live with that, understanding that the resulting learning and growth are valuable by-products that in the long run will likely pay returns that exceed the cost of the mistake or failure.