But the fact that an epic fail here and there can lead to success shouldn't delude business owners and executives into believing that all failure is created equal. To get the most out of fail, a company must fail properly.
Here are seven tips for failing the right way.
1. Fail fast, but not too fast
The mantra "fail fast, fail often" is one that many startups have embraced. As a guiding principle, this mantra makes a lot of sense, particularly for companies that don't have a lot of baggage. But when it comes to failing fast, there is such a thing as too fast.
The understanding that failure is often a prerequisite for success doesn't negate the fact that success also typically requires other things that aren't accomplished overnight. As such, it's important to find a level of balance. No, you don't want to spend five years researching, planning and building only to see an initiative fail quickly once brought to market, but at the same time, you don't want to do a half-baked job at any of those tasks because that in and of itself is likely to guarantee failure. This is where concepts like minimum viable product can be so valuable.
2. Mitigate risk
Acceptance of failure shouldn't be confused with acceptance of unlimited risk. Even if an initiative is launched with the understanding that it might not produce a positive ROI, it should never be launched without fully understanding the risks.
In many cases, risks go beyond dollars and cents. If your company launches an online community, for instance, and eventually shuts it down after it fails to gain critical mass, there may be reputation-related risks because lack of critical mass won't necessarily mean lack of usage. These risks should absolutely be considered when deciding what to pursue.
3. Fail for the right reasons
Failure is okay, but when your company fails, it's important to know what it was trying to achieve. In other words, failure should be the product of an effort that was on-mission, not an initiative that was launched simply because a huge potential reward was perceived to exist. There's a word for that: gambling.
4. Win even when you lose
Even if an initiative doesn't add to the bottom line, it shouldn't provide nothing in the way of gains. At a minimum, every failed initiative, properly designed and implements, should provide an opportunity to gain insight about a market your company serves or is considering serving.
5. Fail different
If your company is learning new things with each failure, it's important that each failure is the result of some new shortcoming as this increases the likelihood that you're moving in the right direction. If, however, you're making the same mistakes over and over, chances are you aren't winning when you lose.
6. Don't prepare to fail
Embracing failure and making it acceptable has the potential to significantly benefit an organization. But there's one kind of failure that isn't acceptable: the type that comes when a successful initiative fails because the organization wasn't prepared to deal with success.
At the end of the day, the willingness to fail must not breed a culture of laziness in which employees cut corners and don't plan because they assume that failure is a more likely outcome than success. Be warned: when such a culture develops, acceptance of failure can be the ultimate detriment.
7. Expect to fail again and again
It's easy for a company's leadership to say that failure is acceptable but it's often very difficult to endure failure. Unfortunately for many companies, open acceptance of failure comes with the unrealistic expectation that there won't be too much of it. In other words, it's assumed that the company will fail a few times, and then succeed, making failure an inconvenient but soon-forgotten occurrence.
But what happens when success doesn't come as quickly as hoped? The reality is that to fail right, there has to be a commitment to failing over and over again -- so long as the company is failing the right way.
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