Failure Yield

I want to share a fragment of a speech with you, which has comforted and empowered me since my graduation. It's when John G. Roberts Jr, the Chief Justice of the United States Supreme Court, was invited to speak at a graduation ceremony and delivered a speech titled "I Wish You Bad Luck."

TheVideo “I wish you bad luck”

"Now the commencement speakers will typically also wish you good luck and extend good wishes to you. I will not do that, and I’ll tell you why. From time to time in the years to come, I hope you will be treated unfairly, so that you will come to know the value of justice. I hope that you will suffer betrayal because that will teach you the importance of loyalty. Sorry to say, but I hope you will be lonely from time to time so that you don’t take friends for granted. I wish you bad luck, again, from time to time so that you will be conscious of the role of chance in life and understand that your success is not completely deserved and that the failure of others is not completely deserved either. And when you lose, as you will from time to time, I hope every now and then, your opponent will gloat over your failure. It is a way for you to understand the importance of sportsmanship. I hope you’ll be ignored so you know the importance of listening to others, and I hope you will have just enough pain to learn compassion. Whether I wish these things or not, they’re going to happen. And whether you benefit from them or not will depend upon your ability to see the message in your misfortunes."

Let's talk about failure!

1. Failure Yield

Failure can be useful, especially when the best and hardest work is done under a spirit of risk and challenge. Innovation inevitably leads to some failures. However, we also want to have predictable returns for the future. After all, we get promoted and paid more by controlling costs and improving efficiency, not by failing. So, many people see failure as a bad thing and try to keep it to a minimum, but this leads to less innovation. So, how do we evaluate a failure? Should we celebrate it or blame ourselves for it? How do we adjust for the next attempt? Would it be next attempt?

If you consider the denominator as the resources invested in trial and error, while the numerator as the knowledge and contacts gained from failure, you get the Failure Yield. The higher the yield, and the lower the investment, the higher the failure yield. By controlling the failure yield, you can have returns without losing control over costs.

How can we increase the failure yield?

1. Keep the investment small and cut losses quickly, similar to the concept of failing fast in Silicon Valley or lean startup practices.
2. Try to extract value from failures. To do this, you need to differentiate between types of failures, as explained in the following point.
3. Share the value of your failures as much as possible to increase the failure yield.

2. Three Different Types of Failure

Continuing from the previous point, let's differentiate failures from two perspectives :

can this failure be improved?

Will fixing it result in a significant return?

Therefore, failures can be categorized into Mistakes, weaknesses, and Growth Opportunity.

Mistake:

Mistakes are low-level errors that occasionally occur in things you usually do well. For example, Dave Evans, famous with his lecture of the "Designing Your Life" at Stanford University, shared a mistake he made in the course.

While he was away from home for three days to fumigate the house to get rid of termites, burglars broke in and stole all the valuable items. In this case, even though the mistake could have been avoided, it was a rare situation. So, Dave decided to treat it as a mistake - costly and painful but just a mistake. For situations like this, the failure yield is very low. The wise approach is to not dwell on it, admit the error, and move on.

Weakness:

This is the kind of failure that stems from issues you've always had. These kinds of mistakes tend to crop up repeatedly in certain situations. You know where they're coming from, probably tried to fix them, but keep slipping up. For instance, procrastination, short temper, lack of attention to detail, and so on.

I have this friend who's a slowpoke at everything, whether it's eating, talking, or walking, he's slower than everyone else. Even when we go out together, he's always the last one to step out...

He's suffered from being slow, but trying to change his character traits was tough. So, this dude eventually came up with a strategy: start everything early no matter what he's doing. And surprisingly, this gave him a reputation for being thorough in his work because of his slow and steady approach. Additionally, his slow eating pace turned out to be a blessing in disguise since he was the only one among our close friends who didn't have stomach issues.

Of course, tackling your weaknesses can be quite the game—deciding if you want to mend your flaws is a personal choice. But remember, fixing weaknesses doesn't yield much compared to either avoiding them, collaborating with others, or even outsourcing. If you're constantly battling your flaws, when will you have time to leverage your strengths?

Growth Opportunity

Failures that are genuinely worth rectifying offer growth opportunities. You can identify the root cause of these failures, find ways to correct them, and once you do, the rewards can be significant. Focus your attention on these types of mistakes.

For example, there's a story about a business consultant: during a phone call with a client, the client suddenly blew up, yelling and screaming, leaving him baffled. Later, he found out that a key member of the client's team had resigned that day, causing chaos. Although he followed his usual protocol during the call, it just hit a raw nerve.

He didn't often make such mistakes; client management was his forte. Reflecting on this incident, he realized that in his previous calls, he always went straight to the point, keeping the conversation tight and effective. However, this failure made him realize that if he were meeting in person, he would have started with some small talk first—it's where critical information often surfaces. Skipping the pleasantries was clearly risky, but he hadn't realized it before.

So, from then on, his approach changed: even during phone calls, he'd quickly exchange pleasantries before diving into the main topic of discussion. Spending a few extra seconds made a world of difference in how things unfolded.

After spreading this experience in his organization, not only did everyone's phone communication efficiency improve, but he also built his personal brand. Rather than brushing off that disastrous call with a complaint like, "Another terrible client encounter," he made it a learning experience. Otherwise, he'd have learned nothing and might have repeated the same mistake later on.

3. Keeping a "Growth Insights" Journal

In my sales work, I've been using a table to track my shortcomings to help me progress. Now, I've modified this table to serve as a "Failure Compendium" for observing both my personal life and work, managing my failures, and letting them help us become a better version of ourselves:

Measure these failures in terms of their learning return—were they mere mistakes, weaknesses, or growth opportunities?

If they were growth opportunities, what valuable insights can you derive from them?

It's impossible to live an ideal life without making a lot of mistakes. The key is to fail as quickly and efficiently as possible – the crucial thing is to increase the return on failure, invest minimally, differentiate between mistakes, failures, and growth opportunities, and finally share the experience. The significance of failure and setbacks lies in this:

It's not about how they happened, but what you gained from them.