For many companies, reaching a high level of innovation and success does not come immediately. Many of them need a “come from behind” strategy in order to be market leaders. Others need to hit the depths of failure before they can rise up Phoenix-like and reach new heights of success. Learning to fail is a critical requirement to turnaround performance.
For a company that is failing, what does it take from leadership to drive it to being a market leader? I call this process Learning to fail or failing forward, where stale companies with undesirable products can be successfully turned around. I’ve done it myself several times.
In 1999 I was recruited by an Israeli company called Commtouch that operated out of a chicken coop on the outskirts of Tel Aviv. Comprised of twelve engineers crunching away on code, the company tasked me with writing a formal business plan which later became the platform for a public offering. The company lacked direction, and put the pressure on myself to institute aggressive goals that resulted in turning the company from an $800k single-product venture to a $30 million market leader. The company was later worth $1.3 billion.
I joined a company previously known as Datumcom three years ago and was put in charge of turning it around. When I came on board the company was trying to make location-based apps but was spending money without looking at the ROI. At trade shows they spent thousands on hiring women to dress as pirates and hid $10,000 at the venue and attendees had to use location tools to find it. Some of the ideas weren’t bad, but they did not represent a cohesive strategy that would drive real growth. I pulled everything out of the former company, leaving just the legal structure, a few select employees and kept the investors.
I knew it needed a new brand image and business model and restructured the company as Locaid, which is now a leading Location-as-as-Service (LaaS) provider. Transforming this company into a success took fast and decisive action, which are essential for those who want to their business to fail forward. I could have taken the route of reining in spending and refining marketing strategies but that wouldn’t have been enough. This situation required drastic actions which are now paying off with the company’s explosive growth.
During my trials building up these failing companies, I learned some hard truths which helped me learn what it takes to bring back firms from near death. I encourage entrepreneurs to follow these six truths / best practices in order to “fail forward” and succeed.
- Take 100% responsibility. A key lesson I learned very early on in my career is to take 100% responsibility for everything that occurs with the company. You’re the leader and disappointments should fall on your shoulders just as successes will be a chance to shine. Own up to failures but don’t let them own your drive or optimism.’
- Visualize success. Self-visualization can be a very powerful tool. Elite baseball pitchers or golfers visualize outcomes in their mind right before taking action. You need to visualize yourself and your venture reaching the pinnacle of success in order to have the right positive frame of mind.
- Be focused on what you will achieve. Add some specificity to your plans so they don’t simply become dreams. Write down reasonable goals with timeframes in order to give all of your energy that additional focus. Hold yourself accountable for any missed goals.
- Follow my “SCOPER” method. SCOPER stands for being a Strategic, Creative, Optimistic, and Paranoid Executer. It really means covering your bases. You need to be creative and hope for the best while also thinking strategically and remaining paranoid about both the risks and the competition.
- Take action early. If you see your business needs to move into another direction, don’t wait another minute to step in and make changes. In the entrepreneurial game, those leaders and companies that can’t pull the trigger on necessary actions simply get left behind.
- Measure everything. While you always need to have a measure of gut instinct, you want to make informed decisions. This is where metrics come in. Get a sense of the numbers for the failing business so you have benchmarks for improvement.
Even if you’re a business leader who has mastered these six tips and has a great plan, you might not be able to rescue every company due to external issues or market timing. You will, however, gain valuable experience that comes with pushing yourself to personal limits and managing failure with positive thinking and a look to the future.
Have you learned to “fail forward”? What’s your secret to success? Share your thoughts on these action items and your own in the comments section below.
Posted by Rip Gerber on June 11, 2013 at 6:30am