Why failure can be good for you
This may sound counter-intuitive but let me briefly explain why. Failure isn’t fatal. But failure to change might be. In the world of American basketball, John Wooden is a legend. He coached UCLA to win 10 NCAA national championships in just 12 seasons. And he achieved this feat because of his ability to constantly adapt to new players, new rivals and new styles of play.
In our own industry, marketers and PR professionals need to be open to learning from failure.
Business leaders are continually being faced with complex changes: an aging population, the rise of the middle class in emerging economies with a different attitudes and beliefs and constant technological advancement of the web and mobile technologies that disrupt well-established business models, to a name a few.
What we’ve learnt over the past decade is that in a shifting environment consistent business performance isn’t enough to perpetuate itself. The recent shock departure of Tesco’s CEO and its lack lustre financial performance of late shows just how far “Britain’s most admired company” can fall from hero to zero.
To keep their organisations relevant, CEOs and other leaders must heed the reinvention imperative. This is why failure can be good for you.
This has happened in some of the biggest blue chip brands on the planet. Take IBM. Over the past century IBM has gone from manufacturing adding machines to inventing the PC to earning the majority of its revenues from services.
Another is Xerox. When the company began it was so closely identified with photocopiers that its name became not only the eponym for its product category but a common verb. Then Xerox went on to invent Ethernet and today it competes in areas such as mass-transit ticketing systems and e-discovery solutions.
Just ten years’ ago Samsung was known only for consumer electronics. Today it’s one of the most valuable brands in the world and spans advanced technology, construction, petrochemicals, fashion, medicine, finance and hotels.
Even adversity can be the precipitation for change.
According to the Institute for Crisis Management, some 75% of crises actually start internally – half of them from within management and a quarter with other employees.
Enhancing employee engagement may help to militate against this but it can’t be completely eradicated as organisations need to be able to manage human failure on a daily basis. Which is why to some extent internal crises are the hardest things to manage and when the lawyers get involved inevitably such short comings are swiftly covered up under a cloak of silence. But silence isn’t a sustainable strategy, even before the development of social media. It’s incredibly damaging today and organisations need to learn to express concern without conceding liability.
PR academic Quentin Langley, in his recent book Brand Jack, observes: “Those publics with long-term interest in your organisation need to be engaged on a long-term basis. You can even take this to another level, as Shell did with its post-Brent Spa, post-Nigeria “burden-sharing strategy”. This involved identifying “special publics” – academics, NGOs and the media – and engaging with them in round-table discussions about the problems facing oil companies.
“The Brent Spa crisis – when a Greenpeace campaign had forced Shell UK to back down on plans to dispose of an oil storage platform by deep sea disposal, almost certainly the safest way, and adopt a risky and expensive strategy of onshore dismantling – had taught Shell important lessons.”
From a business perspective, senior managers need to constantly think about reinvention and change in everything they do. It’s essential to get beyond pride in “what we’re really good at” which ironically can blind people to changes in what the world needs and what customers value most.
A key lesson that needs to be learnt is knowing how to make the distinction between enduring trends from those that are short-lived. Remember the fuss that surrounded Second Life and how we were all now going to play out our fantasies for real in a virtual world and make money from this?
Decision-makers – and even politicians – must be willing to take short term hits to performance in order to lay the ground work for long-term advantage.
Pressure from the London Stock Exchange to deliver in the next quarter is a given. The job of the business leader is to counter it with a point of view on where the industry is headed in the next five-10 years. If your strategy strikes outsiders as unexpected, that’s fine. They don’t know your business as well as you do.
Success is never final, failure is never fatal. It’s courage that counts.