Before I share my thoughts on the topic I would like to clarify that this article is not meant to glorify failure but l have tried to pen my thoughts on how organizations which have a strong mechanism to manage failures could increase the chances of success in any projects / products and initiatives.
Let’s try and look back to our toddler years, I am sure most of us would not remember so it is advisable to check with our parents :smile: . From what we can remember and from what our parents will tell us all of before being able to walk, crawl or talk failed, fumbled several times before eventually learning. Imagine if we had stopped trying because we failed then most of us would not have been walking or talking :wink:
I believe there is a great philosophy / cultural lesson in how all living things grow up including the human race. The biggest lesson I have learnt from a diverse experience of different roles and careers is the ability to handle / learn from failures successfully enhances the overall ability to succeed. I am sure all of you are wondering what I am trying to say and it sounds cryptic.
Let me take a case in point to illustrate what I mean. Most of us who work in the software industry or even other product companies are used to the usual way of portfolio / investment management in very highly successful companies. While it may involve more steps than below I have tried to capture the key activities:
1. We start with a business case
2. Business case first mentions when the product would be released which is normally 1-2 years’ timeframe
3. Business case requests resources for the period of investment
4. Business case then projects revenue for some number of future years versus the cost and what eventually would be the financial benefit to the company
5. Finally the approving authority signs off on the business case
6. As a next step most successful companies setup an end to end large organization to realize such a business case including multiple levels of management.
Looks good so far, in an ideal world perfect recipe for success!!!! Good luck to achieving a free innovation spirit in such a setup and all unknowns have been predicted :cool: !!!!
Then why do so many products, companies fail and create a long tail with a never ending source of COST but very few opportunities for REVENUE. Let’s look at some of the reasons:
1. All business cases are a simulation of intentions and not realistic outcome
2. There is fixed timeframe / intent to release the product in the future without even assuming that the product when released may no longer be relevant.
3. If it was always not difficult it would take extraterrestrial powers to predict success given the following
a. Technology / business processes are evolving every moment, what is relevant today most likely is not relevant tomorrow
b. There is enough and more competition to pick on concepts, ideas and offer alternates
c. On top you have every time a disruptive innovation knocking your idea off the shelf
Now let’s get to the core of the discussion the most fundamental flaw I see in the above historical way of managing portfolio / investment is that we setup ourselves for a guaranteed SUCCESS. Now for any of the reasons above let’s assume the product / idea fails how do we get out of such a situation:
1. We have setup a large organization – dismantling this would mean a very big disruptive HR exercise
2. There have been end to end investments starting from development to go to market – so we are already in the money trap and pour more and more with the hope of recovering the investment
3. On top of all this we have done a terrific marketing exercise and now it would be a shame to retract in the market!!!!!
Well there we go A PERFECT RECIPE for a long term cumulative DISASTER, congratulations on now owning a healthy MONEY PIT :shock:
This is where the concept of allowing / managing failures kicks in, it’s always easy and effortless to manage success, what we need to set up our self is the ability to manage / allow / restrict the impact of failure. How could such a process look like:
1. Follow an inverted pyramid model of investment – start with very small investment of resources
2. Incremental innovation with a lightning speed of go to market – Allow the market to decide the outcome which can be built on rather than always predicting success
3. Have a clear early benchmark for success based on which the product can be switched
4. Have a multi-step approach to evaluate the potential of the product at every step until the release – DO NOT FIX or MANDATE RELEASE
5. Ideally have a watertight legal model in the early phase so that there is flexibility in all possible options for a decision on the product, this is the key to nipping failures in the bud!
6. Finally never force a product in the market as eventually if the product is not desirable then this will reflect in the adoption and the revenue curve eventually will head in the unintended direction
In summary I would like to leave you with thoughts on how can we use failure as an option for success – Fail early, Fail Cheap and Fail Safe – This is the only sustainable cost effective approach for SUCCESS!!!!