In the moment, failure sucks.
And with half of all new companies in the U.S. failing in the first five years, this statistic can wreak havoc on the minds of a lot of small business owners.
Many of them become risk-averse and unwilling to push the envelope for fear that their companies will fold, and that they’ll end up back at the drawing board. But if you never fail at anything in the short run, then you’re setting yourself up for long-term failure.
Failure doesn’t just teach you what you’re doing wrong; it also teaches you how you can get things right in the future.
And you’d better believe that your competitors are willing to take the risk to explore new methods, practices, and opportunities. The lessons they learn will give them an advantage.
Related Article: Boaty McBoatface and the Failures of Crowdsourced Marketing
Building Failure Into Your Business Model
Failure should be part of any business model. You can’t plan for success unless you plan for failure, too.
For instance, at LinkedSelling we implement a new marketing initiative every month or two. I expect that only a third of those initiatives will succeed, meaning that in any given year we’re looking at as many as eight potential big failures.
But the successes will more than make up for the losses, and with each failure we learn something new about how we can improve. These are some of the failures we’ve learned from the most:
A Lack of Experience
We started an online magazine back in 2013. Everybody was optimistic at the time, but it turned out to be something that we didn’t know how to do, and we lacked the knowledge and resources to market it effectively.
Ultimately, though, I don’t regret making the decision to try something new. It gave us a different experience that we could learn from. Today, we all consider it to have fallen into the bucket of “try lots of stuff, and the successes will outweigh the failures.”
Forgetting to Factor in Existing Core Business
In 2014, we launched a new division in a parallel business, but our team wasn’t prepared for the task. We didn’t have a group of dedicated people who could focus all their energy on the new division, and we lacked the resources needed for success. That left us stretched, and it caused a lot of disruption to our core business efforts because we had to divert some of our current employees’ focus to the new division.
We had to abandon the venture after six months of effort, and I’m always mindful of this experience when considering a new initiative for the company. We try to take a practical and really hard look at the resources any new project will require and consider the impact it will have on our existing core business, too.
Jumping the Gun With Hiring
We were looking to hire a new salesperson back in 2014, and we thought we’d found the perfect candidate. He seemed a great fit for the business, and we wanted to move fast, so we skipped over some of our usual due diligence.
He was with us for less than six months, and it was a complete disaster. He overpromised to clients, signed terrible deals, was dishonest, and started to challenge every decision we made at the executive level.
Even after we terminated him, he kept causing problems. He tried to steal some of our clients and launch his own competitor to our business. He lacked the skills and resources to be a real threat to us, but his efforts were still a distraction. Whenever we’re hiring, we keep that mess in mind and take things slowly.
Allowing Others to Weigh Us Down
It’s never easy to fire people, but over the past couple of years we’ve learned a few tough lessons about letting poor performers stay on too long. We used to rationalize our decisions by saying, “We need this person right now because who else will do the work? Let’s just do the best with who we’ve got.”
But this mentality is just kicking the can down the road and delaying the inevitable. And it causes more harm in the long run. When one team member is dragging everybody down, the whole company’s work suffers, as he or she creates a toxic situation that forces other team members to do more to compensate.
It creates a lot of negative energy when the rest of the team sees a poor performer being propped up and not pulling his weight. Confronting these issues head-on and cutting the cord quickly is a lot better.
Related Article:Building Greatness: Why Some Projects Fail and How to Avoid It
The Lessons We’ve Learned
So, those were some of our biggest failures. But guess what? The business is still going strong. And it’s not in spite of our failures that we’ve succeeded; it’s because of them.
We didn’t mope around like a teenager who’s just been turned down after asking his crush to the prom. We evaluated our mistakes and gleaned valuable information that helped us improve. These are the three most important lessons we’ve learned:
1. Hire Slow
Forty-six percent of new hires fail within the first year and a half. Had we known that when we hired our lousy salesperson, then we might have been less eager to ignore our usual protocol.
A clearly designed hiring process is a must for any business, and it will really save your sanity. Communicate clearly with candidates, and set expectations that will put their minds at ease. The hiring process is stressful for everybody, and the calmer you can make it, the easier it will be for the right candidate to shine. Be diligent, slow down, and think intentionally.
2. Fire Fast
When it’s clear that you have a poor performer on your hands, let him go. If you don’t make the tough decision now, you’ll be faced with an even bigger mess down the road, just as we were.
But don’t do it out of the blue. You need to create a culture in which employees understand what’s expected of them. Talk with potential hires about your stance on firing before they join the company, and then communicate expectations regularly once you’ve picked the right person. If an employee falls short of those expectations, act quickly to stop the rot from spreading.
Related Article:5 Reasons Most Companies' Big Data Projects Will Fail
3. Be Open and Persistent
Owning a business means being in charge of your own destiny, and more than 60 percent of small business owners think the sacrifices and challenges that come with the job are worth it. To overcome those challenges, however, you need to be persistent.
In the face of every failure, mistake, difficulty, or challenge, you need to be dogged in your determination and willing to try new approaches. When launching a new initiative, be aware of the consequences that failure brings, and consider the impact the initiative could have on your core business. Stay open to new possibilities, and if they fail, remember that you can learn from them.
When an opportunity comes knocking, don’t bolt your door because you’re afraid of failure. Be prepared to take risks, act decisively, and show the persistence you need to succeed. You might see some setbacks along the way, but your business will be stronger in the long run.