Written by Amy Hamilton-Chadick for Westpac Red News.
Read the original article here.
Failure: For business owners, it’s the ultimate F-word. We don’t like to say it, or think about it. But failure is now being recognised as a force for transformation and reinvention.
While it’s not something to aim for, failure is an inevitable part of life for all of us, including our most inspirational entrepreneurs.
“Even the poster boys have their own failures,” says Debra Chantry, owner of Ventell and a business coach at Icehouse. She names Xero CEO Rod Drury and GrabOne founder Shane Bradley as two entrepreneurs who have invested in ideas that fell by the wayside before starting spectacularly successful ventures.
“I’ve had two failures myself,” Chantry says. “One was through naivete, and it was a bit of a learning curve. The other one was a spectacular failure. Looking back it was one of the best things that could have happened to me, though I wouldn’t have said that at the time.”
So how can you bounce back from failure and turn it into a springboard to success?
Turn a failure into a pivot
Having coached the founders of more than 100 companies, Chantry says she’s seen all types of failure, and they run the gamut from total collapse to survivable turnaround.
For some start-ups, the failure of one idea can be used as a pivot point to turn the company in a different direction. Take shopping network Tote – its owner found that instead of buying through the site, users were just assembling collections of favourite items to share with friends. That was the pivot: Tote’s failure provided the catalyst for Pinterest.
If you have to fail, fail fast
When your business is no longer viable, it’s better to pull the pin entirely than to keep throwing good money after bad, says Chantry. It’s a difficult decision to make, but failing fast can be the lesser of two evils.
“Sometimes you do have to give up,” Chantry says. “I’ve seen some privately owned business where the owner has invested over a million dollars and then it has failed. It can be an expensive lesson. So we say fail fast. You won’t waste your energy, time and money – and you’ll still have the lessons.”
Lean on your support network
The stigma of having failed can be painful, stressful and even damaging to your health, says Dr Smita Singh, an AUT lecturer at the Department of Management, Faculty of Business and Law, who has been researching entrepreneurial failure for a number of years.
Singh discovered that one of the most important ways to recover from a failure was the ability to tap into a social support network, and sometimes a stock of spiritual belief too, in order to help you put your failure in perspective. This, she believes, is what helps people to bounce back.
“Once you’ve been hit, you have to be proactive and tap into your social resources,” says Singh. “You can’t do it alone. Networking and getting out there can minimise the damage – the stigma of failure can be quite crippling, but don’t let it get you down.”
Analyse what went wrong
It’s tempting to try to pretend your failure never happened, but it’s important to learn from what went wrong. Chantry’s “spectacular failure” resulted in a liquidated company and the laying off of 15 staff; it was a distressing episode in her career. Talking to other business owners who understood the process of failure, and had moved onto bigger things, helped Chantry to start again and build the thriving company she has now.
“Don’t see failure as a ‘Don’t ask, don’t tell’ scary event,” says Singh. “Think of it as a chapter in your life that can be challenging and manageable – and an opportunity for a new and fresh beginning. You have to keep moving, keep working and keep making changes.”
Define your own success
Not everyone whose business fails goes on to start another one, but that doesn’t mean they’re a failure. Of the 21 failed entrepreneurs Singh interviewed in her doctoral research, 18 went on to new start-ups. But the other three were much happier going in a different direction: “On the surface the experience seemed negative but it taught them a lot about themselves, their resilience and their skills. It wasn’t a wasted experience, it was an enriching experience.”
Some people start their businesses because they love their jobs, says Chantry, and they sometimes find that running the company takes them further away from the work they enjoy. After a failure, they find out they’d much rather be working for someone else, and by not jumping into another start-up, they’ve succeeded in learning from their mistakes.
Don’t add to the stigma
Singh has one last reminder: If you have a friend or family member whose business has failed, be supportive.
“You need to remember that if a business has failed, it can be for reasons that are beyond anyone’s control – think of the businesses that failed after the Canterbury earthquakes,” she says. “The reality is that it can hit anybody at any time. It’s important for society to have an open mind and give entrepreneurs a second chance. They can get up and do wonderful things.”
