Learn to maximise your ‘Return on Failure’.

Johannes Haushofer, an assistant professor of psychology and public affairs at Princeton, has been much talked about recently after he published a ‘CV of Failures’ (http://www.princeton.edu/haushofer/Johannes_Haushofer_CV_of_Failures.pdf). It is a must read. Written as a regular CV, it lists the ‘degree programs I did not get into’, the ‘academic positions and fellowships I did not get’ and the ‘paper rejections from academic journals’, along with the meta-failure, ‘this darn CV of Failures has received way more attention than my entire body of academic work’.

Tongue-in-cheek and deeply honest, Haushofer’s CV is refreshingly different. It makes you wonder what role failure plays in making you who you are. As Bill Taylor points out in his Harvard Business Review article, ‘Write a Failure Résumé to Learn What Makes You Succeed’, this is equally true for companies. Bessemer Venture Partners, who has partnered with the likes of Pinterest, Blue Apron and Snapdeal, pioneered the ‘anti-portfolio’, which caught on. This is a list of some great opportunities they passed up (https://www.bvp.com/portfolio/anti-portfolio) that they publish as a reminder to themselves of the choices they made. It is up on their website, alongside the portfolio of the companies that they did choose to back.

Let’s be honest. No one likes to fail. Generally, most of us feel that failure is bad. And we all talk about learning from mistakes. In fact, saying that we need to embrace failure has become quite clichéd. The reality though is our learning tends to be superficial. So, drawing from this, my message this week is on getting deeper and truly learning from failure.

"We thrive on success, push ourselves harder, and celebrate wins big and small. At the same time, we tend to hurriedly brush aside our failures. We explain them away and more often than not, try to pretend like they never happened. And we often miss the fact that the two are intrinsically linked.

As Taylor puts it: “In a world defined by hypercompetition and intense pressure, where business breakthroughs and career advancement demand a willingness to take risks and defy convention, the notion that any person can achieve meaningful success without experiencing setbacks and disappointments seems hopelessly naïve.”

What you should know about failure

1. You are not your failures

It is okay to fail. Everyone does. Have the humility to acknowledge it when you do. And learn to separate yourself from the failures. They don’t need to define who you are or what you are capable of.

Walt Disney was fired by an editor at the Kansas City Star who felt he ‘lacked imagination and had no good ideas’. Thomas Edison was told by his teachers that he was ‘too stupid to learn anything’. He failed nearly 10,000 times before creating the electric lightbulb. Oprah Winfrey was fired from her job as a television anchor in Baltimore for being ‘too emotionally invested in her stories’. Van Gogh sold only one painting during his life, just months before he died. Colonel Sanders lost several jobs before he found a partner to set up Kentucky Fried Chicken. Henry Ford failed at several automobile businesses early on. Lady Gaga was dropped by her record label three months after being signed on. J K Rowling was a single mother, jobless and ‘as poor as it is possible to be in modern Britain, without being homeless’ when she wrote the first Harry Potter novel. Ardeshir Godrej, founder of our Group, failed twice, before setting up his locks business. The list goes on. You will find it tough to come across someone successful who hasn’t known their share of difficult times. The difference is that they found the resilience to grapple with them, learn what they could and then move on. Edison famously said, “I have not failed. I’ve just found 10,000 ways that won’t work.”

2. Know when to worry about failure and when not to

Art Markman, in his Harvard Business Review article, ‘When You Should Worry About Failure, and When You Shouldn’t’, points out that all failure isn’t the same. Given how pressed we are to make tradeoffs, there will always be some things that we are just not able to do. That is perfectly okay. He calls these ‘unsystemic failures’ – things we end up missing out on because we don’t have the time or energy or money and so we choose not to. What you should start considering more carefully, are ‘systemic failures’ – when you are just not able to achieve something you set out to, over and over again, despite your best efforts.

3. Maximise your Return on Failure

The systems we work in are inherently dichotomous. On one hand, we acknowledge that some amount of failure is almost necessary, because we need to be much more experimental and innovative in order to be successful. And on the other, all our measures are of success. No wonder then that no one wants to admit to failing. There just isn’t room for it. So, Julian BirkinshawMartine Haas, in his Harvard Business Review article, ‘Increase Your Return on Failure’, suggests learning how to extract value from your failures, to be able to measure and improve your return on it.

“In a return on failure ratio, the denominator is the resources you’ve invested in the activity. One way to raise your return is by reducing this number – by keeping your investments low. Or you can deliberately sequence them, starting with small amounts, until major uncertainties have been resolved. The numerator is the ‘assets’ you gain from the experience, including information you gather about customers and markets, yourself and your team, and your operations. Increasing these is the other way to boost your return.”

Bottom line, there is so much that you can learn when you fail. It could be something that helps you introspect and change on a personal level. It could be an insight that helps you make a more informed business decision as a company. Either way, dig in to it, learn and then pass it on to someplace where you can really make a difference with it.

4. Failure strips away the inessential

Rowling, in her commencement address at Harvard University, talks about the benefits of failure, saying that failure forces you to strip away the inessential and see things for what they are. That can be tremendously insightful:

“I stopped pretending to myself that I was anything other than what I was, and began to direct all my energy into finishing the only work that mattered to me. Had I really succeeded at anything else, I might never have found the determination to succeed in the one arena I believed I truly belonged. I was set free, because my greatest fear had been realised, and I was still alive, and I still had a daughter whom I adored, and I had an old typewriter and a big idea. And so rock bottom became the solid foundation on which I rebuilt my life.

You might never fail on the scale I did, but some failure in life is inevitable. It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all – in which case, you fail by default.

Failure gave me an inner security that I had never attained by passing examinations. Failure taught me things about myself that I could have learned no other way. I discovered that I had a strong will, and more discipline than I had suspected; I also found out that I had friends whose value was truly above the price of rubies.”

5. Don’t make this about other people

Too often, we end up judging ourselves basis what other people think. It’s probably easier said than done, but stop using other people to measure your success. “Ultimately, we all have to decide for ourselves what constitutes failure, but the world is quite eager to give you a set of criteria if you let it,” as Rowling put it. The more you make this about winning approval, the less likely you are to be honest with yourself. That means you will probably miss out on introspecting and being able to learn from what went wrong.

6. Move on

Give yourself the space to come to terms with it. Pick up what you can and then, at some point, you will just have to move on. You can’t stay put in the past, the ‘emotional doom-loop’ as Susan Tardanico calls it in her Forbes article, ‘Five Ways To Make Peace With Failure’. Tardanico uses former professional American football coach and player, Don Shula, and his ‘24-hour rule’ as an example. Shula allowed himself and his team 24 hours to really feel a victory or defeat. Once that was up, it was time to focus on the next game. His approach was to always keep things in perspective and not get carried away.

Helping your team deal with failure

Sometimes, the failure isn’t ours alone. Sometimes, you fail as a team. It may not even be that everyone in the team has failed. But the point is, you don’t deliver as you had planned to. That’s when it starts getting tricky. People have different ways of dealing with it. As leaders, we need to be able to help all our team members find the perspective they need to and then, move on.

From Amy Gallo’s Harvard Business Review article, ‘How to Help Your Team Bounce Back from Failure’, here are some quick pointers:

1. First, take control of your own emotions:Move on from the disappointment, because your feelings are likely to be contagious
2. Give them space: Acknowledge the disappointment. Don’t rush; give them the space to deal with it.
3. Be clear about what went wrong: Don’t sugar coat what happened or abdicate responsibility. Be clear and focus on the facts: ‘We missed the deadline because we didn’t take into account how long each task would take.’
4. But don’t point fingers: Focus on the what to blame, rather than the who. Don’t single out people, especially not in public and don’t allow people to pick on one another.
5. Shift the mood: Initiate the move to what happens next; push the to start discussing how you will avoid similar mistakes in the future
6. Tell a story: A great way to help people start seeing how they can learn from failure, is to share about a time when you did so yourself
7. Encourage collaboration: Talk about what happened, together

As you read this, do reflect on the past year. Did you experience significant roadblocks? What things did not go per your plan? What have you learnt from this? For those of us who did not meet our sales targets, what will you do differently this year? For those of you who were involved in some of our innovations that got delayed, how will you improve this year? How will each of us make sure that we don’t make the same mistakes?

I am sure that many of you will have similar stories to tell. Do write in and share them. There is much that we can learn from each other on this. I look forward to hearing from you.