When Fast Failure is Needless Failure

It often feels like the rules of business are being reinvented around us almost daily. We keep hearing about new types of companies, new forms of transactions, new customer demands, even entirely new industries. People seem set to “Uberize” almost anything.  I certainly see all this in my sector, healthcare, where almost everything is up for grabs--and especially in my own area of focus, healthcare globalization.

Leaders at every organization are under pressure make inroads into one or more of these new markets and approaches. The obvious first step: figure out what's going on. Yet I'm frequently surprised to see even brilliant, successful executives plunging forward with investments of significant resources and good will into domains they clearly haven't taken a lot of trouble to understand. The results are predictable.

Why do even the best and brightest make this basic mistake? I don't think it's because they believe it's OK to jump in with knowing what's going on. I think it's because they're sometimes so uninformed about these new domains, and confident in their own abilities, that they don't even know enough to recognize how little they know.

Here are some of the warning signs that you might be at risk of unknowingly making the mistake of leaping without truly looking:

You think your knowledge, experience and tactics apply universally. You're a successful leader, you've figured out how to make things work time and time again, you've built a great team and run a formidable organization. So what if you're entering an entirely new game? It's not as if the same basic rules don't apply. Except they might not apply at all. What has worked for you before might not work in this new territory.

You're taking your cue from everyone else's excitement. Welcome to groupthink! The herd mentality is alive and well in the business world. You hear people talking about this next big thing, you see competitors getting involved, the press keeps writing about it. But none of this enthusiasm offers any evidence you're doing the right thing in the right way. Every disastrous business bubble was a groupthink festival, and the outcomes favored those who proceeded more thoughtfully.

You're letting a partner lead the way. An impressive organization has approached you to partner, they clearly get it, they'll set things up, they're telling you everything you want to hear. What great luck! What could possibly go wrong with entering a partnership you don't really understand?

You're not hearing any good reasons to rethink your approach. Actually, you're just not listening. There are always voices of caution, and either you're not seeking them out, or you're ignoring them. The problem here is "confirmation bias": We tend to pay special attention to information that backs us up, and not so much for information that conflicts with our thinking. You should go out of your way to seek out critical voices, and to look for ways to test and validate your assumptions.

This is the time for bold action! No leader wants to be accused of excessive risk-averseness, and of getting left behind by disruptive forces that demand fast responses. But there are times when a certain level of caution is exactly right thing. You need to thoroughly, wisely and accurately assess risks to the greatest extent possible rather than just plowing right over them. Ignoring risk isn't bold leadership, it's an abdication of leadership responsibility.

You're being pushed from above. What choice do you have but to plunge ahead, given that your boss, or board members, or shareholders, are breathing down your neck and demanding progress? That's a legitimate concern, of course. But in the end you'll be punished more for a fast bad outcome than you will be for slowing things down a bit so you can better figure it out and get a good outcome. Fast failure looks good compared to slow failure, but terrible compared to medium-speed success.

When it comes to entering new markets or ways of doing business, you obviously don't want to be paralyzed by a fear that you don't know everything about it. But there's a happy medium. And in general I find the safer bet is to assume you're missing something, take a step back, and dig deep for at least a modicum of clarity and validation before making any big moves that could have lasting negative consequences.