Some time ago I wrote about the courage that it takes to fail. I recounted the story of “Honest Abe” and how many times he failed before he achieved success. In this world that is so focused on success we have forgotten that the most successful people have failed many times, picked themselves up and tried again.
In business there are degrees of failure. The most catastrophic failure results in the death of the firm. But, there are more common failures. You lose a huge client that puts your organization at financial risk. Your cost of goods sold goes through the roof due to circumstances beyond your control. You launch a product that should have been a home run and it fails.
There are many reasons why companies experience failure. According to a survey this past year by the Turnaround Management Society the most common actually have less to do with the products or the structure of the company and more to do with other factors. In a report entitled Why Do Companies Fail?, the top two reasons cited were that “internal communication was insufficient and changes in the market were underestimated.
The full results of the study can be found here,
As I studied the report there was one more thing about failure that I believe should be considered. If you are going to fail, do it quickly and move on. This is a lesson that applies to every aspect of business, from internal operations to client relationships.
When you hire employees you want to believe that they will be a good addition to your team long-term. However, you need to assess their ability to do the job quickly. A mentor of mine once told me, “If they can’t measure up, fire them fast.” At the time I thought that was heartless. Today I know better. You really don’t know if someone is a good fit until they are on the job. Those early days are critical. If they do not have the skills, aptitude or the attitude to learn the job, you need to move on and find a better suited employee. Otherwise you waste a lot of time on training not to mention lost productivity.
The “fail fast” principle also applies to new products and initiatives. You can dump lots of money and expend resources on efforts that are not a good long-term bet. One client of mine spent three years developing a new product, not to mention significant dollars on a market launch. Two years later the product still did not have “legs” but they continued to try and make it a success. They finally decided to stop production. The signs were there early on, but no one wanted to fail. In fact, early failure would have saved them a great deal.
When it comes to clients no one wants to see a relationship fail. It takes time to get to know a client’s needs and wants. You may need to ramp up production for them or put in place some special processes. There are however some clients that you can never please. I’ll talk more about that in future post. When you see that you simply can’t make them happy the relationship, and the work, is doomed to fail. End it quickly or the burden of doing the work and the possible ill- will they might spread can have lasting effects.
In a preview post I encouraged business owners to dare to fail. Now I will add… and do it quickly!