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Most startups – most businesses, in fact – fail. While the popular 90% theory has been debunked, the reality is not too far off: Over half of small businesses fail within the first five years, two-thirds in the first 10. While experience and funding can help reduce the risk, they don’t make anyone’s ideas immune.
The biggest companies, including Google’s Google Plus, Google Glass, Project Loon, Facebook Credits, Amazon Fire Phone, Netflix Qwikster and Apple Nudon, have all made major mistakes. In some cases, these mistakes paved to way to amazing technologies that prior efforts sought to tackle too early. We only pay less attention to their failures, because those companies learned how to create “fail-safer” approaches — methods that allowed them to take failures and use them to grow.
A “fail-safer” environment isn’t safe from failure. It encourages it. It’s not done by sweeping disasters under the rug. It’s also not done by downplaying or discounting failures with rationalizations. It’s done by creating a system that allows your team to try, make mistakes, learn, iterate, and repeat that process until they find success. Companies that have adopted a fail-safer approach manage to create and perfect methods that allow them to innovate and improve. New doors to success unlock when organizations reconsider and refine how they try, fail, learn and repeat.
Related: Why Failure Is Necessary in Order to Succeed as an Entrepreneur
Many people don’t realize that the success they see from others around them is truly the tip of an iceberg filled with failures. However, there are ways to build a fail-safer environment:
1. Build transparency
Transparency and alignment across the organization are critical. Transparency doesn’t just refer to ensuring the accessibility of data — I can’t count how many times I assumed I had fully equipped my team for solid decision-making after installing a few dashboards. At its practical best, transparency consists of making the data understandable. At my own company, we not only provide a dashboard for every data point in the organization, but we also schedule weekly tactical meetings and monthly startlogic syncs to ensure that the entire team understands not only the why behind specific goals but also how their daily tasks are intrinsic to the bigger picture. This furnishes them with the tools needed to take calculated risks where necessary and arms them with enough information to call the right shots when things go south. Above all, it builds trust in the face of failure.
Taking calculated risks is essential. We must understand the importance of what we are trying to solve in a greater context, as well as the implications of any delays. This changes our appetite for risks, and as a result, may shift our strategy for solving a specific problem. The establishment of a business furnishes a bird’s-eye view for all involved; as businesses grow, they tend to break down tasks and silo the work, resulting in structures where individuals may know their personal finish lines, and may even comprehend the global company goals, but fail to connect the two.
If I’m tasked with building a bridge but don’t know what might be traveling on or beneath it, I won’t know the best way to pivot when I hit delays. If I don’t know who is intended to cross the bridge and what type of weather it needs to withstand, I won’t understand the implications if the bridge fails to achieve these goals. I might fail in either the design or the timing of the project, but I can’t choose the area where my organization can sustain this sort of failure, because I don’t understand the bigger picture.
2. Provide incentives for autonomy and internalize spheres of control
A world of data won’t help me make the right choice if I believe the outcome is out of my hands. Many problems are truly out of your control, but believing that the outcome cannot be changed, renders you less effective in decision-making. When one has agency and control, they can begin to visualize the outcome they’re looking for rather than feeling helpless. More importantly, you diminish your chances of turning absolute failure into sudden strokes of genius, simply because you have been given the confidence to “try.”
There are two types of control externalization: practical and psychological. The first one is the easiest to solve: Provide autonomy. Ensure a team tasked with a specific goal has control of the entire set of assets required to complete that goal. We address this by creating pods called “brands,” each composed of engineers, designers, product personnel, analysts and marketing professionals. Each operates as a mini-company with a specific goal set from above but with full autonomy to devise strategies to attain this goal. Their sphere of control is bigger, and they are less likely to encounter problems caused by dependence on external resources.
Related: 10 Lessons About Failure That Every Entrepreneur Needs to Know
3. Ramp up responsibility
The other type of control externalization is a little more complex, as it is psychological in nature. You will always encounter external risks: geopolitical changes, competition, a stomach virus, etc. The greater the challenge, the harder it is to maintain optimism when facing these epic dangers. It’s best to craft processes that build up an individual’s responsibility over time, so early failures are more likely to be small ones. We wouldn’t put a student driver in a muscle car for the first lesson — it makes more sense to start them out in a reliable junker and award them with increasing autonomy as they demonstrate greater discipline and skill.
4. Make failure socially acceptable
No one with skin in the game ever feels truly “safe” from failing, but a clear understanding of failure as a crucial part of success lessens the burn. At our company, everyone acknowledges failure, which embeds a thread of ownership into our work, even when it doesn’t go well.
When something goes wrong, scolding the person in charge might feel like the right move, but it isn’t likely to improve their performance. Those capable of holding themselves accountable first will recognize the gravity of their actions without the scolding. Those who deny culpability will reframe the scolding as a deficit in your character instead of their own. When people feel comfortable stepping forward with a mistake, we have the luxury of taking the time to understand what, rather than who, went wrong. You can change the people who make the decisions, but you gain a lot more when you change the way decisions are made.
Related: Why Entrepreneurs Should Aim to Fail – That’s Right. They Should Actively Seek it.
Consider trust in the greater purpose of failure and what it means for success. Instead of looking at it as a loss, view failure through the lens of ultimate victory. When you acknowledge failure instead of averting your gaze from it, you’ll start to recognize it as an asset — failure almost always comes with an opportunity to improve and succeed.
Failure is not statistical. It’s binary. And you may be one failure away from a huge success. You can’t predict where or when that will be, but you can create an environment where failure after failure doesn’t distance you from your desired outcome — instead, it simply brings you closer to the success you’re after.