Embrace the Risk of Failure

Tom Panaggio

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When Thomas Watson Sr., the man who built IBM into an international business powerhouse, said, "If you want to succeed quickly, double your failure rate," he was clearly not advocating purposefully making mistakes or putting yourself in a position to fail. What he was saying was that your efforts are your key to success; the more you fail, the more you are trying to succeed by giving yourself more opportunities.

There is no doubt that failure is painful and costly, but successful leaders always view failure as a learning process step. The mere fact that we failed at something means we were trying to make something happen. We were executing, and that is truly positive!

Leading and building a business is like being a child learning to ride a bike. To master the skill of riding a bike and learning to be a successful business leader, you must first embrace the risk of failure and expect to fail. It is rare that someone can expect to accomplish either of these skills without a fall or two. And just as a child gets back up from a fall when learning to ride a bike, you have to be resilient to pain and the embarrassment of failing. You have to keep pushing ahead. What both child and business leader must realize is that failure is not defeat but a signal that it's necessary to embrace two essential risks: Decide that a change is necessary, and change.

Apply Watson's reasoning to learning to ride a bike, and the meaning becomes very obvious. No one can learn to ride a bike by making one attempt and quitting after falling off the first time. You must get back up, brush yourself off, endure a scraped knee or elbow pain, and keep trying until you succeed. Stop trying, and you have been defeated.

By expecting to fail, we accomplish two very important objectives: First, we are willing to embrace risking failure by doing something to keep our dream moving forward rather than avoiding risk and doing nothing. You can't be successful unless you try, something! Second, we set the proper expectation mentally that we are planning for the best but preparing for the worst. This is not a defeatist attitude. Rather, it gives you the opportunity to prepare for recovery and make another attempt.

Encourage a Culture of Failure

The traditional business mindset is to punish and penalize for failure. In a company, this breeds fear and stagnation. As people who must work for a living, we fear making a mistake, so naturally our instinct for self-preservation prevents experimentation or embracing risk. In order to truly create a dynamic success story, you must first free yourself and your team from fear of failure. Create an atmosphere where failure is accepted and viewed as a positive step toward ultimate success. When you give people the freedom to fail, you are also giving them the freedom to succeed. You must encourage a culture of failure.

It is important to distinguish between the two types of failure -unproductive and productive-and make sure you are encouraging the correct one. Unproductive failure results from incompetence, apathy, and a lack of effort, and it should not be tolerated. This is the kind of failure that destroys. Eliminating individuals who are not sincerely striving for success or who are merely going through the motions is important in building the right culture. I discovered through conducting employee interviews that one of their biggest complaints was of fellow employees who wasted time, made too many unnecessary mistakes, and held negative attitudes. These people created a non-motivating atmosphere and adversely affected employee morale.

Productive failure is the result of positive effort. It involves failing during an attempt to create something new, to produce an innovation, or to pursue any action to move forward. This is the kind of failure to cultivate in your business. Thomas Edison failed almost 10,000 times before he perfected the incandescent light bulb. His biggest contribution to mankind may not be his 1,300-plus inventions but his philosophy on failure: "I am not discouraged, because every wrong attempt discarded is another step forward . . . Hell, there are no rules here, we're trying to accomplish something." Adhering to this philosophy, his research lab, known as Menlo Park, created more than four hundred inventions in six years.

Give proper recognition to members on your team who have productive failures, and others will see that taking risks and embracing failure is an honorable pursuit, not something to avoid. A word of warning: While we do want to encourage risk taking and innovation, you cannot have anarchy. Having the freedom to explore also means being responsible, and there still needs to be accountability, not only to maintain order but also to have other team members learn from their peers.

Use Failure to Guide you Toward Success

The irony of success is that we do not necessarily learn from it. Failure, on the other hand, has more impact because of the pain it causes. Touch a hot stove and there is a good chance you learn never to touch it again. But win every game, and the "if it isn't broke, don't fix it" attitude makes it difficult to accept change. We can also become overconfident when we succeed too often, and we begin to lose focus or stop looking for ways to improve. Finally, success might lull us into a false sense of security when we fail to analyze why we are successful so that we can keep repeating whatever it is that is creating the success. In other words, when we always have success, we fail to be motivated to look for improvement.

The lessons learned from failure have the most impact, not just because of the pain you suffer, but also because you are motivated by failure to find success. The idea of short-term failures leading to long-term success appears to be contradictory. But as you embark on a journey for success, your eyes must be cast far down the road because success is a long haul. Throughout this series of articles I have maintained that by accepting risk you will get opportunity; therefore you must accept the risk of failure, not defeat.

Next, I will summarize why embracing risk is so necessary for long-term success.