How to Profit from Failures

How Asian companies can take a strategic approach to profit from mistakes and failures to innovate and shape the world

SpaceX made history this April 8 when it managed to land its rocket on a drone ship after the fifth attempt. This feat was achieved because Elon Musk and his team were not intimidated by failures, but were persistent in reviewing the data and rework the engineering to get it right. It is a significant step towards bringing down the cost of rockets, increasing the possibility of affordable space exploration.

In Asia, we don’t handle failures and criticisms very well. A radio station in Singapore once ran an ad that aptly portrayed how we prefer to deal with failure. It showed a boy playing tennis in the worst possible way while dad watches approvingly. As the coach tells him that his son simply doesn’t have what it takes, the father heard only the good stuff and came away with the delusion that his son will be the next Andre Agassi.

Some Asian countries behave in a similar way by claiming that their economies are already a success, even though corruption is rampant and their companies remain largely comprising of contractors and middlemen in the economic value chain. Our Asian approach to handling failure often involves saying that we have tried our best, lie low and then hope that the criticism will go away.

The other strange phenomenon is that as Asia thrives, our appetite for ambition and patience for failure lessen. While some Asian companies have begun to dominate in technology and innovation, others are still satisfied with simply copying or keeping the status quo. They are making money, so shaping the future of technology and design is not that important. This is an alarming trend. We should be at a stage where ambition, risk taking and thirst for knowledge are rising. Asia is in a right place, but it can be better.

In a sad chapter in China’s history, Ming Emperor Yung-lo, after sending the eunuch Cheng Ho to explore the world, decided to shut down the Navy. Cheng Ho had brought back impressive spoils and helped the imperial court learn more about the world beyond China’s borders. Unfortunately, court officials saw these presentations as confirmation that the Chinese were far superior and had nothing to learn from this strange new world. They deemed the Navy to be too expensive a hobby and went a step further to destroy all evidence and capability of building a blue-water fleet. Future generations of Chinese would lament this decision because the world would have been a very different place had the navy remained intact.

The ability and willingness to keep trying against the odds is what pushes the human race forward.

For Asia to rise as a continent with ideas for the future and not simply be good manufacturers or copycats, we need to embrace failure and encourage people to have the determination to make a comeback. Landing a rocket on a drone ship in the Atlantic would not have been possible without earlier teams who failed and contributed to the understanding of the challenge. The ability and willingness to keep trying against the odds is what pushes the human race forward.

How can you build a strategy to profit from failures? Here are a few ideas for you to consider:

1. Let the fear of failure inspire you

When embarking on a new venture, don’t get caught up in the possibility of success. Think rather of the different ways an idea can die. As Andy Grove said, “Only the paranoid will survive.”

In our firm, we encourage Consulites to consider the ways a project can go wrong and study the different factors before developing a solution. The team learns to be more innovative if they are forced to think within constraints. To get the most out of such sessions, you must moderate them lest people go to the extreme and become constrained. You want to challenge people to come up with solutions, not paralyze them.

At our strategic workshops for our clients, we ask participants to share one primary hope and concern about an idea before development. People tend to share the following three types of issues: first, issues that can be solved with the right processes and individuals; second, issues beyond the organization's control such as the business climate or national politics; and third, the outcomes that they desire.

People who raise matters that are within the organization's control tend to be more action-oriented and are willing to work to solve the problem. This then encourages a more solution-driven discussion versus a doom-and-gloom type of discussion which leads to paralysis.

2. Identify what type of failure has occurred

Be careful not to jump to conclusions when an initiative has failed without a meaningful review. The analysis should consider the journey thus far, from plan to process, to identify what went wrong. Look out for these three types of failures:

Failure of execution occurs because of human or process-related mistakes. A particular action may not have been done well, so the result was unsatisfactory. You can expect to see results after you change the processes or persons involved.

Failure of the environment occurs when the business environment is not sufficiently developed to support the venture. The venture may be making money, but securing financing is difficult. You will have to adjust the funding aspect to buying time for the initiative or venture.

Failure of concept occurs when no one is willing to pay for the product after it is out on the market. You may be putting in a lot of work and doing all the right things, but it is just not working out. You will have to change the business model and concept. 

3. Build a culture that takes failure in stride

Mistakes can be catalysts for great success. Do you know when people make errors in your organization? And when you do, how do you react to them? You want a team where people are open about their mistakes so that you can address them before they become problems.

Being forthright about one’s mistakes does not come naturally in the Asian culture, so the management must be supportive when people try to take personal responsibility and make amends. For our colleagues to share their reflections of failures or mistakes openly is common at our firm during our friday sharing sessions called circles.

After such a sharing, we immediately switch from identifying what has failed towards developing solutions. We don’t dwell on the mistakes or play the blame game. Trust is then built between management and staff, and people become less defensive and are more open to solving problems.

This approach of developing a psychologically-safe environment was affirmed in a Google study recently and for us, it has worked tremendously well. This culture took some years to develop, but it made us stronger and more adaptive to the fast-changing environment. Start nurturing a workplace where people are open to sharing their mistakes and failures openly, and you will soon discover a different and better perspective.

Share with me your stories of how you overcome failures and achieve success.

About Lawrence Chong

He is the Co-founder and CEO of Consulus, an innovation consultancy with business management and multi-disciplinary design capabilities. He is a featured speaker at global events such as World Marketing Summit and World Brand Congress. He served as the Immediate Past President of Design Business Chamber Singapore. His thoughts on  innovation and creativity appear in regional media such as Business Insider, Business Times, Marketing Magazine, Newsbase, TheEdge , Prestige Magazine, VTC10. In his personal capacity, he is a member of the Focolare, working for peace through dialogue with friends from different faiths.

About Consulus

We are a global innovation and design consultancy with business management and multi-disciplinary creative capabilities. Since 2004, we have helped companies, governments and non-profit groups achieve sustainable profit and growth by redesigning their organisations, business models and brand experiences. Our competitive advantage comes from the insights gleaned from reviewing companies in 18 cities throughout the Asia Pacific regarding their business and organisational models. Read about our PurposeCore programme if your organisation is looking for an effective transformation to meet the complex challenges of the 21st century.

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Consulus is the convener for Shape the World Conference, a creative thought-leadership event aimed at providing design-led strategies to inspire companies to innovate and shape the world. In 2013, Consulus launched the World Company Day initiative to inspire companies to shape the world creatively into a better place through daily work.

The Consulus Partnership is present in Singapore, Brunei, Vietnam, Sri Lanka, Thailand, Italy, Argentina, Bangladesh