A retail CEO once invited me to the opening of a new concept store. The company had made a big investment in the new concept and so there were high hopes that this trial would succeed. The store looked great, and the initial customer reaction was extremely positive. I turned to one of the project managers and asked him if he’d been closely involved with the development. “Well,” he replied laconically, “It’s too early to say.”
Behind his witticism was an understanding that his business demanded immediate success. It had an unwillingness to accept any sort of failure, even when testing new concepts. Failure was not a learning opportunity; it was simply an opportunity to seek a new career. Unsurprisingly, this business did not have a strong track record of either innovation or pace. Managers did not want to stick their head above the parapet and take a risk on a new product or initiative, as the chances were they would be shot at.
There is a paradox here. The desire to avoid risk and potential failure can create the very conditions that make failure more likely. There is no growth without risk. Yet many successful companies seem to forget the behaviors and attitudes that created and drove their success. Researching my new book, First & Fast, I came across numerous examples of major corporations including Nokia and Boots that had seen growth plateau and decline as a result of a bureaucratic, risk-averse culture gaining hold in these organisations. And, through my own experience, I have seen first-hand how the fear of failure can inhibit the growth and success of many smaller and mid-sized businesses.
But it is possible to reverse this cultural shift and develop an entrepreneurial approach in businesses. Here are 12 ways you can overcome the fear of failure paradox and accelerate growth:
Clarify your expectations.
What is your #1 goal? If you’re not clear on what you want your organization to achieve you’ll never settle on a strategy or the best route to success. Ask yourself – and your teams – what you want the business to achieve in the next few years.
As Richard Baker, the former CEO of Boots the Chemists told me, “You can’t spray and sprint!” You can only grow at pace if you are clear on your handful of priorities and have agreed these priorities across your leadership team.
Have everyone focused on the same goal.
Once your people understand the goal they will move mountains to help you get there. As Matt Williams, the CEO of Topps Tiles put it after he had led the delivery of the company’s goal of achieving 33% market share. “A specific and clear goal galvanized the entire organization and has been a key part of our success.”
Take every opportunity to communicate.
Talk about the goal, the successes and the failures, and show people that it’s OK to fail if the failure was in pursuit of the company’s goals. Communication of your aims and aspirations isn’t just what you do at your annual conference; it must be built in to your conversations and discussions every day of the week.
Develop or remove risk-averse managers.
Your managers are a reflection of you. If you allow poor managers with little appetite to take prudent risks to remain in situ your people will think you don’t really mean it. Your first option is to coach and develop your managers, and improve their confidence and capability to lead their teams, but if they are unable to change you have no choice but to find managers who will lead in the right way.
Become great at protyping.
The best high-growth businesses are expert at building, testing and refining rapid, low-cost prototypes before launching the final solution. Overcoming your fear of failure does not mean betting the company on high-risk ideas; it means focusing on action that enables you to sensibly and rapidly develop winning new ideas.
Err on the side of cannibilisation.
Most new ideas will threaten parts of your existing business to some extent. While companies with a fear of failure will focus on protecting existing business rather than developing new businesses, higher growth corporations embrace the need to cannibalise sales. Gillette, for instance, has driven the growth of the brand through strategy of cannibalization, where Sensor, Mach3 and Fusion brands have all purposefully destroyed the brand that preceded them.
Reward behaviours, not just results.
Not all new efforts will achieve their goals, and it is essential that these ‘failures’ are not unjustly punished. So, at your annual awards ceremony, why not have an award for “the most glorious failure”, “the very-nearly-but-not-quite-a-success” and “the most entrepreneurial manager”?
Celebrate victories together.
A couple of weeks ago I advised a CEO client to celebrate the victory of new sales with her organization. She reported back to me about the impact of that message and how everyone was energized by the latest results. Success breeds confidence and that gives people the motivation to take the next step out of their comfort zone and achieve even more.
Increase your review cadence.
Most executive teams review sales weekly, but review their key growth initiatives on a monthly basis, at most. Driving out the fear of failure and building traction with these initiatives means that they should become just as important and ingrained in your organisation as your weekly sales. Amazon’s leadership team, for instance, meet every Tuesday to review their big new growth initiatives.
Run regular growth summits.
Similarly, you can’t expect to drive growth if you only think about new initiatives once a year. A quarterly session, at least, is essential to generating the quantity of ideas and the energy to drive a compelling growth pipeline.
Involve your customers.
The closer you get to your customers, the more willing you will become to change. DFS, the UK’s leading sofa retailer, has driven changes to its marketing, service policy, product ranges and acquisition strategy on the back of its customer satisfaction reviews. Greater engagement between the top team and the views of the retailers’ customers.
These 12 steps can shake your organization out of its fear of failure and accelerate future growth. Which of these steps could help you escape your own fear of failure paradox?
© Stuart Cross 2016. All rights reserved.