SUCCEED BY FAILING (Ralph Keyes)

[Gast zrski]

One would think that the most successful people in business were determined to succeed and not to fail. Not necessarily. In some ways it’s just the opposite: those who focus too hard on succeeding don’t do as well as those who can tolerate failure.

 

In a rapidly changing economy you are likely to confront as much failure as success. You will then, of course, confront a natural fear of failure. This is perfectly normal, and not even a bad thing necessarily. Fear can motivate, and make one concentrate harder. It can even be stimulating.

 

Those who found businesses seem to thrive on the anxiety they confront and the excitement it creates. Entrepreneurs are renowned for their excitement-craving temperaments. If anything, they prefer the dark clouds and thunderclaps of impending catastrophe to clear days of smoothly humming businesses. Research on entrepreneurial attitudes suggests that orderly settings cause these risk takers more pain than chaotic ones. "We have days when it's kind of smooth," the owner of a food manufacturing business told Inc.magazine, "but those are not my greatest days" The founder of a restaurant chain concurred. "My eyes light up when I hear of a crisis," he said.

 

Ask any founder of a thriving business how things are going and you'll get an aggravated recounting of payrolls to be met, debt to be serviced, insurance to be bought, and the need to expand. Running the business is a million headaches. But ask that person what it was like to start an enterprise and watch his or her face light up. Getting a business off the ground is a heroic experience: one thrilling story after another of bill collectors pounding on the door, creditors whistling through the keyholes, and eating bologna sandwiches on the floor by candlelight because the furniture was repossessed and electricity turned off. Color comes to entrepreneurs’ faces as they recount such stories, and excitement rings in their voice.

 

Today’s entrepreneurs would have been yesterday’s explorers, scouts, and warriors. The evolution of society has depended on their adventurous spirit. The best business-founders see their failures as footsteps on the path toward success. Silicon Valley entrepreneurs consider failures “rites of passage,” “learning experiences,” and “steps on the road to success.” It's a truism in Silicon Valley that a high tolerance for failure underlies this sector’s dynamism. There you are told repeatedly, “Failure is tolerated here.”

 

A reluctance to try something new, they say, is worse than trying something new that fails. Among these business creators there’s almost a cult of failure, a cocky pride in their ability to take a hit and come back swinging. Microsoft’s Bill Gates was recently depicted in Fortune magazine as a risk-taker whose success has grown from the realization that “you have to try everything, because the real secret of innovation is to fail fast."

 

There are sound management reasons for being more accepting of failure and less impressed by success. That is not an altogether modern insight. The attitudes of today's entrepreneurs differ little from those of yesterday's inventor-moguls: Thomas Edison, the Wright brothers, Henry Ford. Ford called failure “the opportunity to begin again, more intelligently.” He spoke from experience. Before the Ford Motor Company took, two previous ventures of his had crashed and burned. Like contemporary innovators, earlier pathbreakers saw much to be said for business setbacks. According to IBM’s Thomas Watson, Sr., "The fastest way to succeed is to double your failure rate."

 

A study of 40 successful entrepreneurs found that most had run one or more businesses into the ground. Yet the vast majority said if their current venture collapsed, they would start another. Don't they ever learn, the more prudent among us wonder. Well, no. That's why entrepreneurs keep plugging. Getting knocked down. Trying again. On the floor. Back on their feet. Like wirewalkers, venture founders know that whoever gets on the wire may fall off. They just don't consider this sufficient reason to stay on the ground.

[molecuultje]

SUCCEED BY FAILING

    Ralph Keyes

 

Those who found businesses seem to thrive on the anxiety they confront and the excitement it creates. Entrepreneurs are renowned for their excitement-craving temperaments. If anything, they prefer the dark clouds and thunderclaps of impending catastrophe to clear days of smoothly humming businesses.

 

Dear Ralph,

your column gives a very nice summary of the typical characteristics of an entrepreneur : daring, thrill seeking and thriving on pressure. I guess you are right and perhaps that also explains why so many Americans love to become an entrepreneur and why so many Dutch people are reluctant and hesitant. Entreprenurship is according to some experts a cultural thing, a mentality which is hard to influence. No matter how many governmental measures are taken to improve bureaucracy, to introduce fiscal and other incentives, it still comes down to a state of mind that is present or absent. Some recently published articles in the Netherlands mention that the amount of bankruptcies has increased significantly during the last months. Some people claim it is because the Dutch government abolished certain certificate requirements before staring a company. Others say it is because of a general tendency of individuals to take more risks, to lend more money and accumulate more debts. Maybe it is just because we become more and more influenced by America and start to acknowledge that failing is allowed and that going bankrupt does not have to imply a stigma for life.

 

[Ridler]

I have got a little addition to the column. First, I would rather use succeed by improving. Making mistakes while improving is sometimes inescapable. But making mistakes is no goal in business, improving is. Making mistakes should be accepted, but when you make a mistake, you should correct it right away. Like a continious proces.

 

However, in most cases a entrepreneurs are also managers. Traditional management always says that there are two classes of people in the organization. One is a group of thinkers who think and innovate new ideas, and another is a group of workers who are required to work with their hands. The managers should encourage their subordinates to come up with improvements too. And so making mistakes should be accepted in the entire organisation. But improving a production proces, while producing is not desirable. Just like making mistakes is not desirable while producing. In this case mistakes should be eliminated. A good technique for mistake-proofing is the Japanese Poka-Yoke. These ideas are derived from the Kaizen business strategies. For more information:

http://www.kaizen-institute.com | http://www.mistakeproofing.com/

[rkeyes]

I think you're right, that a rising number of bankruptcies suggests more risks are being taken, and more businesses started, many of which fail. That's why some economists see a rise in bankruptcies as a healthy sign. The United States Congress recently tightened bankruptcy laws and many people objected that this would only discourage entrepreneurship. As

you point out, reducing the stigma in going bankrupt is a good way to encourge more people to start their own businesses.

 

The question of which mistakes are productive & to be encouraged and which ones are not and to be discouraged is complex (& addressed in our book). The key is to discourage mistakes in production, especially where safety is involved (tire manufacture, for example, as with Firestone) but not discourage mistakes made while trying new approaches that could lead to dynamic innovation. Creating what we call a "failure-tolerant" attitude toward this type of mistake-making encourages, as you point out, the desirable goal of getting more employees involved in making improvements.

 

_{I've posted this answer in Ralph's name, his Dutch is a bit rusty ;) (zrski)}

[Gast Kanban]

To explain Poka-yoke for the unknown easily:

 

Poka yoke literally translated, "FOOLPROOF". It has come to mean a device or technique that ensures the production of a good unit every time.

 

A simple example of a Poka Yoke device is a Diesel or leaded gas pump nozzle that will not fit into the "unleaded" gas tank opening on your car!

Also Mc Donald's French-fry scoop and standard-size bag used to measure the correct quantity are Paka-yokes.

 

Kanban