Over the last year, there has been a growing trend among prominent business leaders. These leaders are encouraging their employees to take more calculated risks and not let fear of failure hold them back.
Today’s leaders may be pulling inspiration from Google’s cofounder Larry Page’s principle on Moonshot projects. Or maybe it’s the words of legendary venture capitalist Tom Perkins, who was all about taking intelligent business bets when he said, “Only two out of about every 10 projects resulted in a home run.” But when you do have a home run such as Genentech, the 800-fold return on investment covers and pays for the miscalculated ventures.
In a recent interview, Catherine Courage, vice president of user experience (UX) at Google, made the suggestion that you should “embrace fear, rather than letting it hold you back.” Courage loves the quote “Growth and comfort do not coexist. And the twinge of doubt is often a sign that you’re pushing to the next level.” She went on to say, “The potential rewards of taking a chance are tremendous, and far more significant than the fear and risk you may be feeling.”
In May 2017, Coca-Cola announced it had a new CEO, James Quincey, and his first order of business was to beseech rank-and-file managers to get beyond the fear of failure that had persisted at the organization since the “New Coke” debacle so many years ago. “If we are not making mistakes,” he asserted, “we are not trying hard enough.” With a company like Coke — one that needs to majorly reinvent its image and product offerings due to changing consumer habits as well criticisms that soda is linked obesity and diabetes — leaders need to try new business experiments. And trying new things means some, maybe even most, won’t work out as a financial success.
Last June, even as the Netflix CEO Reed Hastings had been enjoying unparalleled subscriber growth, he was still concerned that his extremely popular streaming service had hit too many shows and was canceling too few new ones. He said the Netflix hit ratio was too high and that the service should actually have a higher cancel rate overall. The takeaway was that current viewer data of what shows people watched the most is not a crystal ball into what new shows will be a breakout hits. By taking risks, Netflix puts itself in position to have shows that are “just unbelievable winners,” Hasting stated.
Even Amazon founder and CEO Jeff Bezos, considered the wealthiest and most successful entrepreneur ever, is making the case that his company’s innovation and growth is forged on its failures. “If you are going to take bold bets, they are going to be experiments,” he said after Amazon purchased Whole Foods last summer. “And if they are experiments, you don’t know ahead of time if they are actually going to work. Experiments are by their very nature prone to failure. But a few big successes compensate for dozens and dozens of things that did not work.”
The message from these business leaders is as easy to comprehend as it is difficult for most of us to put into practice. There are many startups and companies that claim to live by the virtues of creativity and innovation. Yet quite a few of these same leaders and organizations often live in fear of making mistakes, wrong turns and missteps — which is why they often have so little innovation and creativity. Living the life of an entrepreneur, if you are not prepared to fail, you aren’t prepared to learn either. Unless leaders and organizations manage to keep learning as quickly as the world is changing, then they will never keep evolving and moving forward.
So having conveyed this point, what is the right way to be wrong? Are there certain methods or techniques that allow innovative companies and individual workers to immerse themselves in the necessary connection between a small failures and huge successes? As an example, Smith College, which is an all female school in Western Massachusetts, developed a program titled “Failing Well’ to teach its high achieving students something everyone could benefit from — dealing with and overcoming setbacks. The leader of the school’s initiative, Rachel Simmons, told the New York Times, “What we are trying to teach is that failure is not a bug of learning. It’s the feature.”
When students take and complete her program, they receive a Certificate of Failure that declares they are “hereby authorized to screw up, bomb or fail” at a relationship, a test, a project or any other initiative that is deemed very important and “still be a totally worthy, utterly excellent human being.” Undergraduate, as well as graduate, students who are prepared to handle failure are less fragile and more daring compared to those who expect perfection and flawless performance.
This lesson can and should be applied to business scenarios or applications as well. Take for example, the CEO of Domino’s, Patrick Doyle, who has been running the pizza giant since 2010. He has turned around a legacy business into a tech enabled category disruptor by having one of the most successful seven-year runs of any business leader in almost any industry. But for all of his company milestones or wins, he protests, there is its willingness to face up to the inevitability of mistakes and missteps.
In 2016, Doyle gave a presentation at a CEO conference called Business Leaders For Michigan. Doyle talked about two major changes that stand in the way of companies and individuals being more open and honest about failure. The first hurdle, he insists, is what he calls “omission bias” — which is the reality that most people with a new idea will often choose not to pursue the idea because if they try something and it does not work out, the setback might damage their career or performance review. The second obstacle is being able to overcome what he calls the “loss aversion” — which is the tendency for people to play “not to lose” instead of playing to win, because for most of us, “the pain of loss is double the pleasure of winning.” Except maybe if you are addicted to gambling.
Doyle goes on the explain that creating “the permission to fail is energizing” and also a necessary condition for success — which is why named his presentation “Failure Is an Option.” And that may be the most crucial lesson of all.