Once upon a time, a business failure was considered disgraceful, something to be avoided at all costs.
But in today’s world of innovation and disruption, failure has been transformed into an accolade rather than an embarrassment. Leading a failed business venture is thought to build character and bolster resumes.
Indeed, a number of management thinkers now believe that if you don’t fail, it’s not because you’re flawless but because you’re not trying hard enough. That’s the argument at the core of The Wisdom of Failure: How to Learn the Tough Leadership Lessons Without Paying the Price by Laurence Weinzimmer and Jim McConoughey.
“Real failure doesn’t come from making mistakes; it comes from avoiding errors at all possible cost, from the fear of taking risks to the inability to grow,” they write.
Another study takes a similar approach. In The Other “F” Word: How Smart Leaders, Teams and Entrepreneurs Put Failure to Work, John Danner and Mark Coopersmith point to Thomas Edison as the ultimate role model. The famous inventor didn’t consider any individual flop – and Edison had thousands of them — to be a setback. Instead, a failure was an achievement: He was figuring out what didn’t work.
Danner and Coopersmith consider fear of failure to be even more damaging than failure itself.
“Fear of failure limits most organizations’ willingness to take risks, innovate, expand creativity and fully engage their workforce – thus compromising their chances for success,” they write.
They advise embracing failure as an inevitable part of the path to success. Consumer product WD-40 went through 39 botched formulations before the 40th recipe worked. The Angry Birds mobile game needed 51 failed iterations before it landed on a winner.
Danner and Coopersmith see a value in being “failure savvy” – taking setbacks not as a scathing rebuke but as a learning experience.
Of course, it’s crucial that managers learn their lessons from their failures – and that the flops not be so colossal that the entire company collapses.
Coca-Cola’s decision to drop its popular formula for “New Coke” is widely considered a failure. But Coke’s managers were both bold enough to take a risk and wise enough to admit defeat, and the New Coke debacle ultimately became a blip in an otherwise-stellar corporate history.
Pets.com and Webvan, on the other hand, were run by managers so obsessed with internal metrics that they overlooked the obvious reality that their companies were on the verge of collapse. Both Silicon Valley companies became symbols of the excesses of the first dot-com boom.
The lesson, it seems, is that a failure that can be contained and corrected qualifies as a learning experience. But a failure that involves liquidation court and mass layoffs is still just a failure.