Are we heading for failure overkill?

Big failures we pay attention to, systemic failure like the Global Financial collapse of 2007/8 – the BP disaster off the Gulf of Mexico (Deep Water Horizon) with the ecological disaster that followed and a whole host of disasters from 3-Mile Island to Chernobyl and beyond. We recognise these as catastrophic failures, what we don’t immediately recognise is our own moments of personal failure which become our learning experiences.

What is failure?

The fashion of 21st century failure which the current entrepreneurial world has embraced has its own problems. The culture of ‘Fail Fast and Fail Often’ is now the Silicon Valley text book of start-up to glory models yet not all failure is healthy or good. Degrees of failure exist, if a plane fails then we know it ends in tragedy but if the cake fails at least the dog is happy. Degrees of failure – contained failures as learning experiences, these are the planned for failure that we are aiming at.

Failure at its simplest form is a “lack of success” (Knell, 2018, P108) which implies of course that you have an appreciation of what success is in order that you can judge that you failed. This is never easy. I ran a franchise business for four years and, in line with many metrics I failed. The business was unsuccessful for me, I, unlike some of the other franchisees, could not make a success of it. Yet change the metric from the traditional and replace it with a customer centric outcome, then within that business we succeeded by helping over 100 families attain what they were looking for. Looking deeper into this I clearly learned a lot about small business development. It was a great franchise on that score and there were many tools that I have gone onto appreciate are vital in making some decisions. I also learned how hard business can be, how brutal and vulnerable it makes you feel at a time in ones life when ‘brutal and vulnerable’ are two things you don’t want to feel. The few times we let families down were horrendous and genuinely hurt like hell. This was not a venture that was entered into as ‘trial and error’, of some great experiment to learn, it only became that when failure struck. That was when I read Lean StartUp by Eric Reis, which changed my thinking but also made me realise that understanding how we recognise failure is crucial to our own measures of success.

For four years I ran a franchise which is, as I see it a closed mindset business. Was four years too long? On a metric of financial return then yes, it cost me a lot of money but in that slow burn period I learned about marketing, why visibility is hard to achieve let alone maintain; I learned about finance, how cash flow makes us live on edges that appear sharp and dangerous, about people, customers, their journey and mine with them. I learned about cultural plates, when two cultures within one entity rub against each other, creating friction, sometimes a gentle heat but at times a quake of movement. I learned that I didn’t like the box – and I recognised that despite 30+ years in corporates I had never been put in one. This was not some mythological heroic journey it was a trajectory that has gotten me to here, a place from whence I am to what I will become.

You could chalk this up to trial and error, why not, it is a powerful way of reflecting on things, but I never set out for it to be a deliberate experiment (you rarely would) it was life, I took it seriously and it cost me a lot. It should have spent longer in the ‘incubator’ or as Angel Investor Doug McClure called it ‘the fail factory’, and if I was to ever develop my own franchise I would certainly invest heavily in the incubation process for these businesses.

Am I on a path to success? I don’t know – I would like to believe I am. My vision of the future I would like to achieve is to see businesses flourish in my region because we have opened up the arteries and veins of our local ecosystem. We have demystified finance, given entrepreneurs the courage to look beyond the contained life and think about a bigger bolder business. In the mix of this is a healthy portfolio of investments, a business where recurring revenues, an ecosystem of them, support a growing platform for entrepreneurial spirit, of opportunity and a confident place to do business. Where quality jobs are now being created, our local talent pool can stay, build lives here, keep creativity and innovation on the doorstep and not ship it out to the growing metropolises where it is absorbed into a hotchpot of blandness. Homogenous led diversity my be a paradox but I see it as vital. Connected by a sense of place – allied by our shared belief in a better future for all – united in the common goal of quality job creation.

Every failure is a loss – it may in modern day business parlance be a learning win, but in reality if I fail I lose something. We only use the learning caveat to justify the loss – its only natural because otherwise we would stop trying. So we have to justify things – but for how long can we afford to lose? Equally, as a cartoon I saw so beautifully suggests, failure is indeed a subjective thing. “What you call colossal failure that jeopardizes everything, I call a ‘pivot’” (@marketoonist.com) – a tongue in cheek dig at the lean language and the current fashion for failure.

We know the stories of Dyson and his 5127 prototypes before ‘he got it right’ or Edison and his constant iteration towards success that he (and his team) went through but do we genuinely start every project with a mindset to fail? Are we saying that we all should? To embark on a purposeful life of practice – I think I am already there – where we deliberately act with a view to learn that is because we are open to failure.

I have always been of the view that progress is not a product of success. Every time I see ‘success’ I see poor decision making, I see laziness and sitting on laurels, I see homogenous practices of the unhealthy sort and I see dullness of life as we embrace the superficial trappings. Success does not breed resilience – it breeds vulnerability because what is important is the status-quo and the protection of what we have.

Purposeful practice is ongoing, iterative and meaningful work that says the status-quo is one thing but progress and change is another. There is a line of thinking, and I do ascribe to this, that the current entrepreneurial bubble is akin to the banking sector in 2007. That it is a bubble fit for bursting as cheap money fuels excessive risk, that interdependent start-ups who are the customers of other start-ups will all look failure in the eye when the bubble bursts. This generation, many of who have never experienced a gradual, slow burner of a recession, simply see opportunity within and have taken their eyes off the environment outside. Debt ridden, tech centric, de-humanised and facing uncertainty people will react not in the way that is predicted but in a way that is more akin to the ‘Black Swan’ event that Taleb talks of.

Deliberate purposeful practice is, according to Ericsson and Pool, as cited by Knell, “a focused way, with clear goals, a plan for reaching those goals, and a way to monitor your progress.” It is also a way for us to understand our personal drivers of activity and the motivation that we will need to drive through and onwards past failure (Knell, 2018, P112)

Creativity and innovation live in a world of ambiguity and risk that will generate opportunities through happenings, uncontrolled and at times not automatically seen as a positive event.

Serendipity and the Serendipity Effect can take failure and recast it as a moment of breakthrough, a realisation that we have arrived somewhere new and unplanned. Nature (2018) has identified four such serendipitous events:

1.    What is happening in one domain has implications for something entirely different in another

2.    As we open source problem solve we, unexpectedly, solve a totally different problem

3.    A predetermined pathway to a solution takes an unexpected detour and solves the same problem but in an entirely different way

4.    A solution to a problem fails to realise itself at that moment, but over time, through many different considerations and involvement, a solution emerges.

One common theme in all these moments of serendipity is that the human involvement is driven by those with a solid understanding of their domains. My wish is that my experiences, my education places me at the heart of my domain, ready for whatever chance happening should come along.

We counter ambiguity and risk through the process of forecasting, that is by presenting some prediction we solidify the risk in people’s minds. It is our way of saying we are in control because we can predict and if we predict a fan of outcomes, strangely, we are in even more control. This is the way the BOE presents its inflation report, in a fan-tail of probabilities and predicted outcomes all of which say ‘we are in control’ because we have a plan should any of them materialise. This is debatable and probably profoundly wrong as it is about us protecting a status-quo not moving forward in deliberate practice to change the torpidity of the current system.

This forecasting does not allow us to think of the Black Swans those, outliers of events that no fan of probabilities can feel comfortable placing a prediction or % on (100:1, 1000:1 or 10^9:1 – take your pick). Black Swans are extreme impact events, a meteor hitting the Earth or knocking our moon like a billiard ball away from Earth’s gravitational pull or a financial crisis that could have taken everybody down because we are all in the same boat, assets still being mispriced and held to maturity with no reason to believe they will be repaid. The third aspect of a Black swan is that once they happen all the experts say they were predictable. So many people win on these events that they firmly believe they are ahead of the game, and in the short term they are. Success is clearly there to say they did it, they beat the system. Their models are the ones that everyone should apply – and once they do we are all facing the same way again, all in danger of burning the retinas on the back of eyes as we all face the sun.

Agile behaviours are needed to manage failure – the risk is the more we fail the less agile we become and eventually the failure rate exceeds the success rate and we create even more losers than winners. The current entrepreneurial revolution is starting to make me question the longevity of the model as I see so many people enter into a world of ‘independence’ and a lifestyle of ‘laisse faire’ work, that if we continue on this route march there won’t be any taxes to fund healthcare, society will simply remove safety nets and then, once again, the current inequality will look like socialism.

There is this idea of making failure survivable but some people can’t – some people throw the dice of entrepreneurism and it burns them because they have committed so much into this life that when it does not work they enter an emotional blackhole. Being agile when you are cooked to a crisp is not possible, we snap, but that is the mantra that the ‘experts’ those who have done it, tell us what we have to do. So many books written about intelligent failure or failing fast that we now believe that this is the only way to learn and we bin the other options.

It is how we learn that matters, that single loop iterative style or the double loop of complexity as we seek to understand the environment we learn in and maybe have to change that? If we can learn more effectively we can do more with it, we can become more fluid, morph and change, be more agile and bring in new thinking. Everything in our lives has got us to this point, don’t discard what you have done in the belief it offer us nothing, sift through the muddy waters as you pan for gold. When I left the City and wanted to work locally I saw my skills of no value to the local business community. It tool me seven years, and still learning, to appreciate within my experiences are nuggets that have helped me shape other people’s opportunity but also my life. I keep panning for gold because I the filters will reveal more. It may be luck what I uncover but the game is to appreciate how that piece of unhidden experience can be a key to a whole new set of experiences.

So where does this leave the entrepreneur faced with a journey of discovery? You will fail at many things on this road but try to keep something back. Build resilience, build a resilient business, not a one trick pony but a stable from which a thoroughbred might emerge. Be clear about your purpose, make sure that this is aligned to what you do and if it is a stepping stone, then make sure you make that stone yield something. Always take time to reflect, never easy when you are in the heat of a battle, but it is an essential part of the learning. Most importantly, in my mind, recognise that you are not alone – knowing who you are helps others to figure out whether you are someone to be around.

Recognise that learning does not have to be about failure; learn from others, learn from a world of education, from books, from academia, research, learn from every facet of your life and experiences and then practise. Make something happen but make that happening informed, deliberate and motivational to you

“Practice does not make perfect; practice makes improvement.” - Tannian

Relocon is dedicated to agitating the entrepreneurial ecosystem of NE Essex and Suffolk to uncover entrepreneurial opportunity in the pursuit of quality jobs. We connect the resources of our region to the needs of the entrepreneur, we establish a community of practice in the domain of entrepreneurism and in doing so, enliven debate, explore opportunity and lift the lid on the aspirations of our local entrepreneurs. Interested to know more – www.relocon.co.uk or email [email protected]

References

Knell, L. (2018), Why Creativity Matters: insights for individuals and organisations. Milton Keynes, 2nd Ed, The Open University

Nature (2018) The Serendipity Test. Nature, 31st January [online]. Available at: https://www.nature.com/articles/d41586-018-01405-7 (Accessed: 11.12.2018)

Taleb, N.N (2008) The Black Swan. The Impact of the highly improbable, London, Penguin