Michael Jordan said it best, “I’ve failed over and over and over again in my life, and that is why I succeed.” When is the last time you did something abnormal, in business or your personal life? Something that many people around you tried to talk you out of (or maybe laughed at you for behind your back)? If you’re like many leaders or managers, the answer is unfortunately something like, I don’t know…a long time. Why?
I’m here to tell you that if you’re not consistently trying—and failing at—new things, you’re putting your business in danger. You’re choosing short-term safety over long-term growth and prosperity. Ironically, this status-quo thinking leads to the ultimate failure: the stagnation and death of your business.
Face Your Fears
Fear of risk is the most common obstacle I see when it comes to people refusing to embrace failure. It makes sense. Our brains developed in a manner that associates failure with becoming a tiger’s dinner. We’re also conditioned throughout childhood and adolescence to value correct responses only.
But this isn’t the Serengeti. It’s not Ms. Hoover’s third grade classroom. This is business, where some concepts are frequently counterintuitive. Long-term consequences are often the exact opposite of the immediate results.
The good news is you have the power to veto the primitive part of your brain and break the bonds of your educational conditioning. To stop seeing fear as something to run away from and start using it as a North Star.
Countless other people have done it, which means you can too.
A popular motto in Silicon Valley—one of the most innovative places in the world—is, “Fail fast, fail often, fail forward.” If countless men and women did not embrace their fears the device you’re reading this on (or the phone in your pocket) would not exist.
When Arnold Schwarzenegger came to the United States he spoke virtually no English. He had no acting or political experience. But by facing his fears he went on to be a commercially successful actor and the governor of California. It’s no wonder that his third rule of success is Don’t Be Afraid To Fail.
Facing your fears is a necessary step to achieving greatness. Let it be your guide.
Asymmetrical Risk
You cannot be afraid to take risks and fail; however, taking huge chances that put your whole company in jeopardy is even worse. It’s important to strike a balance—to take prudent chances. A great way to do this is by looking for opportunities that have asymmetrical risk. That is, opportunities that offer a disproportionate upside in relation to the downside if you fail.
Contrary to the glorified image of the entrepreneur betting it all on some longshot, the best business people are constantly capping their downsides. For example, Sir Richard Branson made a deal with Boeing that he could return the planes he purchased for a refund if Virgin Airlines failed.
· Tony Robbins employs a 5-to-1 ratio rule when investing. He must feel confident that an investment will quintuple in order for him to pull the trigger. By employing this strategy he can be wrong four out of five times and still break even.
Don’t buy the hype. You don’t have to—and shouldn’t—bet the farm on every single decision. On the contrary. You want to lose early and often, because losses are when we learn. But you need to stay in the game in order to deploy those hard-earned lessons and turn them into successes.
How do you achieve this tricky balance?
By setting SMART (i.e., Specific, Measureable, Attainable, Realistic, and Time-based) goals and developing practical strategies to achieve them. Ask yourself, “Where do I want the company to be in five years? What will it take to get us there?” Working backwards is a great way to get a realistic picture of the steps you need to do—and the pitfalls you need to avoid—in order to achieve your goals.
Cultivating Failure
“I lose on a daily basis, but I’m winning on the decade basis.”
-Gary Vaynerchuk
“All right,” you say, “I’m sold on the need to embrace failure. But how do I get my people on board?”
This can be tricky, especially if your company’s culture or industry has been historically risk adverse. My company’s industry, accounting, is the poster child for conservatism. My partners and I have found that being open to failure ourselves goes a long way. Attitude reflects leadership.
We also spend a good deal of time getting to know our employees on a personal level. Once you know what people really value, what motivates them, what they want out of life, it’s much easier to talk to them on their level. It also shows you their fears—and allows you the opportunity to assuage them.
Ray Dalio, the founder of Bridgewater Associates, talks about the importance of radical truth and radical transparency. Implementing these principles is a colossal help in cultivating the type of culture you desire.
If you really want employees to think outside the box and fail more often, tell them. And then, most importantly, when they do fail back up your words with action. Be supportive. Assure them that failing is all right—it’s part of the process—provided they learn from the experience. Be clear about priorities. Where and what kind of failure is encouraged and where is it unwanted?
For example: We tell our managers, “Managing your clients and giving them an incredible client experience is your priority. As a result, if you don’t meet your billable-hours goal, we are not going to penalize you for that. It will not affect your bonus. We want you to take a chance.”
This ties into the notion of radical transparency. The more clarity you provide for your employees the more likely they are to meet expectations, perform well, and stay with your company.
One of the most important things I’ve learned and that I consistently tell my team is this: Trust the process and the results will come.
Fear is an indicator that you’re on the right path. Utilize SMART goals and practical strategies to take asymmetrical risks and fail forward. Cultivate a culture that embraces failure by being radically transparent, radically honest, and encouraging employees to trust the process.
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Wesley Middleton author of Violent Leadership: Be a Force for Change. Disrupt. Innovate. Energize. (ForbesBooks), co-founder and Houston managing partner of BakerTilly LLP), a national tax and accounting services firm. With over 25 years of tax compliance and consulting experience, he has demonstrated a knack for helping business owners transform their companies into growth and strategy-oriented organizations that excel in operations, marketing, technology, customer service, and workforce engagement, as well as tax and accounting services. Middleton is a certified public accountant and member of the AICPA, Texas Society of CPAs, and the Association of Accounting Marketing.
Twitter: https://twitter.com/wesleymcpa
