Failure isn’t pleasant but it is inevitable. Often, it is a stepping stone on the way to success. This is especially true in entrepreneurship. Given the considerable degree of uncertainty and ambiguity associated with starting and running a business, failure is a common phenomenon.
For the last decade, Christian Harrison has studied entrepreneurs and the keys to their success. Unsurprisingly, many have failed more times than they have succeeded. While failure may initially be a blow to your confidence and even put you in financial trouble, it is not the end of the road. Some of the greatest innovations are based on several failed attempts.
Indeed, entrepreneurs often stress that taking risks is important to the success of their business.
Sir James Dyson struggled for five years to make the world’s first cyclone vacuum cleaner work. It took him 5,126 prototypes before number 5,127 succeeded. In the meantime, he had gone into debt, and his wife was growing vegetables and raising chickens to get enough food to support the family. He took significant risks in his business and even signed his house to the bank. Now a multibillion-dollar company, James Dyson insists that although its finances have changed dramatically, his company’s spirit of risk-taking has stayed the same.
It is worth noting, however, that despite their propensity to take risks, entrepreneurs tend to be analytical and calculative about this. In other words, preparing to fail can help mitigate its effect.
Planning to fail
To an entrepreneur, resilience is the ability to anticipate possible risks, cope effectively with unforeseen experiences, and adjust to changes. Successful entrepreneurs are usually good at picking themselves up.
For you to be resilient, failure needs to be viewed as an opportunity to reevaluate and reorganize your past decisions.
Several entrepreneurs shared that they draft out plans and anticipate changes in their business. Some of these entrepreneurs had big customers on which the profitability of their business depended. They drafted out plans considering the impact on their business if they were to lose that customer. Would the business survive? What effect would it have on their profitability? What measures could be put in place to reduce the impact? These questions guided them in their plans and could inspire your thinking before you take a risk.
As an entrepreneur, it is important to recognize opportunities to grow or reach a new market. Sometimes being successful makes you complacent – by doing the same thing repeatedly, you don’t learn how to grow and improve. Although failure can be a hiccup, it opens your mind to new opportunities and perspectives.
Even great companies understand the value of failure. When Coca-Cola introduced the “new coke” in 1985, the fiasco cost the company millions. Ten years later, then-CEO Roberto Goizueta described it as the best thing that happened to Coca-Cola. The company learned from this and since then has provided other versions of the product while keeping the existing “classic” Coke.
Failing on a grand scale
Failure can affect entire companies or even economies. Take the 2008 financial crisis, which caused recessions in several countries. While of course not every issue raised by the crisis has been solved, the aftermath did result in reams of new legislation, the creation of new oversight agencies, and better structures to prevent similar failures from happening in the future.
If nations can fail, do not be deterred when you do. Rather than running away, embrace and learn from it. In the world of entrepreneurship, there will always be change and turbulence. Those who “fail forward” and learn from their mistakes will eventually be successful.
Source: The Conversation (Edited by d-mars.com)
