October 2024: Peripheral Perspectives - Losing

October 15, 2024

ALOHA, Peripheral Thinkers?!

I often think about you and your businesses and ways to help you grow and succeed. Nearly every day, I ask myself what I can share with you that will make a measurable difference in your success today, tomorrow, and?ten years from now.

We all want to succeed in our endeavors. So, what can I share with you that I haven’t already? I reviewed the last 21 issues of the newsletter. While much is left to share with you about the Peripheral Thinking? skills model, I uncovered a common theme underlying most of the past newsletters.

Winning.

How to win, succeed, thrive, and do it again and again. I love to win.

Admittedly, I’m proud of doing what others said couldn’t be done. However, as much as I love winning, seeing you win is even more satisfying. Above all that, I love helping you find and apply new perspectives to win repeatedly.

That’s why we are covering losing this month.

Wait! What?

We will talk about losing, but not from the typical ‘failing forward’ perspective.

It’s from a peripheral perspective… of course.

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Come on. Let’s dive into the periphery!

Peripheral Perspective – Losing

It’s natural to talk about wins. They are the North Star. The “how to” for success. Unless you’ve started multiple companies and led winning organizations consistently for decades, you likely look to the experts for the rules for success. ‘Experts’ define the formula for success using a backward-looking perspective. How did this company, or groups of companies, reach and maintain success over XX years? What is often left out or altogether missed are the losses that inform the long-term success of companies. What is also less reported, unless it is spectacular, are the losers.

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Perhaps the experts consider loss or failure a given that everyone understands. But there must be more to it than that. These ‘proven methods of success’ either leave something out or are ignored by nearly everyone. Otherwise, why do we still have such high failure rates in business?

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THE ODDS ARE NOT ON YOUR SIDE

Business leaders, entrepreneurs, and startups know that the odds of lasting success?are not on their side. Still, you/we jump in ambitiously… regardless of the statistics.

2024 statistics… About?90%?of startups fail.

• First year:?10% of startups fail within the first year?(Investopedia)
• Years two through five:?70% of startups fail during these years?(54 Collective)
• Five years:?50% of all businesses fail by the end of five years?(Jobera.com )
• Ten years:?70% of all businesses fail by the end of ten years?(Jobera.com )
• Thirty years: Only 5% of small businesses survive >30 years (Clarify Capital)
• 22,060 business bankruptcy filings in the year ending June 30, 2024 (uscourts.gov )

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There are debates about the accuracy of the percentage of businesses that fail over time. According to the Small Business Administration, it is less than 100% and greater than 40%.

Investopedia and Capchase agree that business owners say they’ve failed because?the money ran out, they were in the wrong market, didn’t do enough research, had bad partnerships, used ineffective marketing, and were not industry experts.?

• 38% of businesses fail because they run out of cash or can’t raise capital (Forbes)
• 0.05% of startups get venture capital funding?(Luisa Zhou)
• 34% of small businesses that fail lack the proper product-market fit?(Exploding Topics)
• 22% of startups that fail don’t have a sound marketing strategy?(Harvard Law School)

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And it’s not just 2024. For as long as we’ve kept track, businesses of all sizes have been losing market share, revenues, client/consumer trust, and even shutting down.

Ouch!

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It doesn't matter whether you lead a startup or a Fortune 500. You will lose. If you’re good, you won’t lose it all, but you will lose.

Look…

We have all failed at or lost something, right?

I failed more than one class. I won the United States Karate Championships in 1993 but lost the first round in 1994.

Heck, I lose my favorite Yeti cup several times a week ??.

Please let me know if you find a silver Yeti cup with my name on it. I’ve lost it again!

Enough doom and gloom.

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WHAT’S A LEADER TO DO?

Because no one has a perfect winning record, it is easy to write platitudes about how to pull yourself up by your bootstraps, learn from your losses to move forward, and how failure is simply a stepping stone to the future.

Most winners have experienced and overcome losses.

A few hours of online research identified ten traits of long-term successful businesses (20+ years):?

1. Visionary Leadership:?Clear strategic direction and goals set by leadership?
2. Creativity:?Fostering innovative ideas and solutions to stay ahead of competitors.?
3. Passion:?Strong enthusiasm and commitment from leadership and employees to drive the business forward.?
4. Customer Focus:?Prioritizing customer needs and satisfaction as a core business strategy.?
5. Adaptability:?Ability to adjust to changing market conditions, economic trends, and customer demands.?
6. Resilience:?Capacity to bounce back from setbacks and challenges.?
7. Strong Communication:?Effective communication across all levels of the organization?
8. Continuous Improvement:?Commitment to constantly learn, evolve, and refine processes?
9. Risk Taking:?Willingness to take calculated risks to pursue new opportunities?
10. Talent Management:?Attracting and retaining skilled employees?

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Any surprises here?

Any epiphanies?

Me neither.

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A solid, logical, doable list to follow. So why in the heck are there still so many losers year after year?

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THE ANATOMY OF LOSERS

It seems logical that the opposite of the 10 traits of successful businesses indicates why businesses fail—the traits of business losers.

1. Nearsighted:?No strategic direction.
2. Pedestrian:?Do the same ordinary things forever.?
3. Indifferent:?Make money if possible... or not.?
4. Customer Ambivalent:?Give customers just enough.?
5. Rigidity:?Resist change at all costs.?
6. Fragility:?Avoid effort for fear of breaking.?
7. Weak Communications:?Messages left to interpretation.
8. Infrequent Improvement:?Improve if and only when necessary.?
9. Risk Avoidance:?Risk is an unacceptable condition for business.
10. People Management:?Hire who we can and manage everything they do.?

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As entertaining as devising these “Loser Traits” was, they represent the antithesis of successful businesses’ rules.

These traits contain some truth and even examples of losing companies. However, just like the successful traits, they are clearly losing traits.

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So, here it is…

The number one reason analysts and industry experts give for losing companies is disregarding the rules of success. “Losers break the rules.” The rules of the market. The rules of supply and demand. The rules of raising capital. The rules of sales, operations, finance, HR, development, project management, etc. The unbreakable rules of successful companies.

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THE PERIPHERAL PERSPECTIVE

NOT SO FAST! All rules can be broken. Break some rules, and the consequences can be severe. Break other rules, and you will?find new paths forward.

There was a time when the following rules were undisputed:

• Blank Slate Theory: we are born without built-in mental content. No genetic transfer.
• Highspeed rail will never work because humans can’t breathe at 200 mph.
• The universe revolves around the Earth. Yep… we are at the center.
• Cheops law: “Nothing ever gets built on schedule or within budget.”
• The Earth is flat. I know some still believe this. Not going there.

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I agree that the 10 successful traits are worth following. However, how you follow them, in what order, and what other traits you add to your list is where we “break the rules.”

By now, you know I’m a big proponent of rule-breaking. I break the rules that don’t apply to how I see the world, think, and work. I see connections the rules dismiss. I research the ‘outliers’ that analysts ignore. I study the quiet, unassuming, successful leaders in obscure industries. I even break the “working hours rules.” I’m most creative and strategic between 6 and 9 a.m., social from 10 to 2, and most efficient from 3 to 7 p.m. A 9 to 5 schedule is at least 5 hours too short and misses the first 3 critical hours.

I also break the rules because the majority follow them, with little differentiation. The ‘followers’ are like white, aerodynamically efficient, four-door sedans differentiated only by a few lines and a logo. (gag reflex)

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So rather than concerning ourselves with whether to break the rules or which ones to break, let’s consider if you are following the wrong rules.

Imagine being told that Jim Collins’ 2001 book Good to Great is the final word on transforming your business from good to great. Of the 11 companies deemed ‘Great,’ only one has consistently outperformed the market. A handful are intact and underperform the S&P 500. The rest are in suboptimal levels of good and not good.

Following Collins’ observations and principles in 2024 gives you a less than 20% chance of reaching greatness, greater odds of mediocrity, and a surprising percentage of filing for bankruptcy—aka Good to Gone.

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• Here are some indicators that the rules you follow are wrong for you:
• Your company’s identity, goals, and success are defined by rules you didn’t define.
• The majority of your competitors subscribe to the same rules.
• The rules are industry-specific and unchanged for 5+ years.
• There’s a belief that breaking the rules is a company killer.
• Your industry’s leaders created the rules you follow.

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Don’t be afraid to break the rules. LOSING old, stale, unhelpful rules is a positive move for you and your business. Knowing what rules are wrong for you adds insights to your knowledge repository and frees you to find and make the rules that support your future.

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There are no sacred rules—except legislative or regulatory—that can’t stand up against scrutiny.

That aligns with one of my favorite sayings: “No amount of scrutiny changes the truth.”

The truth about your success is found in your wins and losses, as well as those of other people, industries, countries, and cultures.

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While losing is a fact of life, what you learn from losing is powerful, especially when viewed through alternative perspectives.

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NOW WHAT?

It’s time for some sober reflections. List the rules you follow and shine a bright light on each one. Ask:

1. How does this rule ensure?that my business achieves the big goals?
2. What evidence proves this is the best rule to achieve our vision?
3. Does this rule contradict or detract from any other rules I follow? If so, which stays and which needs breaking?
4. What rules do super-successful organizations use? (OUTSIDE your industry)
5. What rules do I not see or am unwilling to see that need questioning/breaking?

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I’d love to hear what you learned, what you plan to do next, and what you disagree with.

Remember… I’m here to help.

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Until next time… I’ll be looking for you in the periphery!

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How you can help people you know:

If this or previous newsletters have helped you, will you share it with 10 others? In January 2023, I set out to share Peripheral Thinking? with 100,000 people by the end of 2025. To date, I’ve reached 23,531 people. With 14 months to go, I need your help to reach 77K more. More importantly, tens of thousands of people?will achieve more than they ever thought possible with your help. I believe you know people, business owners, industry leaders, event planners, and organizations that will benefit from you. Will you please do one or more of the following?

1. Share this newsletter and the link to subscribe with 10 others. https://www.dhirubhai.net/newsletters/lessons-from-the-periphery-7164646484234153984/
2. Ask me to speak at your next event. https://www.pauldanielsjr.com/speaker
3. Recommend a friend to follow or connect with me. https://www.dhirubhai.net/in/pauldanielsjr

Additional News

We’ve covered a lot of ground together in the last 22 months. You have learned about:

(Jan ’23) The Recession and how business innovators never stop innovating.

(Feb ’23) How to use other people’s “Common Tools” to find new paths to growth

(Mar ’23) Different insights from different people—Tenure, Junior, and Stranger

(Apr ’23) Abstract Art Parallels Business Innovation

(May ’23) How to Thrive Anywhere, Anytime

(Jun ’23) The ‘Visioning’ Skill (Big Picture Thinking)

(Jul ’23) Group Dynamics and its Contribution to Growth

(Aug ’23) Grit. Groups. And Growth—My Personal Confessions as a People Pleaser

(Sep ’23) Quality, Quantity, & Variety—The information and sequences for insightful decisions

(Oct ’23) Lessons from COVID to Survive and Thrive

(Nov ’23) The Problem with Problem-Solving

(Dec ’23) Adaptability – Pros and Cons

(Jan ’24) The ‘Deciphering’ Skill—Uncovering usable concepts from complex ideas

(Feb ’24) How Peripheral Thinking? Skills Enhance 3 of McKinsey’s Rules for Revenue Growth

(Mar ’24) How Rules, Rhythm, and Revelation—Structured, positive distractions

(Apr ’24) The Peripheral Thinkers? Perspective on PERSPECTIVES – very meta ??

(May ’24) My MOM—Tenacity, support, and other traits from one afternoon in the 1960s

(Jun ’24) Diversity—Its critical and sometimes unusual contribution to business innovation

(Jul ’24) The “Summer Slowdown”—A real or mythical influence on productivity

(Aug ’24) The ‘Surveying’ Skill—The big picture view to proactive innovation

(Sep ’24) LinkedIn vs. Peripheral Thinking?—approaches to Business Innovation

(Oct ’24) Losing—What it is, isn’t, and a peripheral perspective of rule breaking

If you haven’t read or revisited the monthly newsletters lately, they are free here:

https://www.pauldanielsjr.com/newsletter

How I can help you:

I give audiences & leaders new perspectives and skills to overcome obstacles and build innovative businesses that last.

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Let’s connect if you are planning an event or know someone who is.

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Programs are designed for your needs and delivered in 1:1, group, and ongoing advisory sessions. Visit https://www.pauldanielsjr.com/contact , select ADVISORY, and I’ll contact you to discuss your needs and determine if/how I can help.