Embracing Failure In Enterprise Innovation

A few months ago, I was working for Moves the Needle, helping build their lean startup training business in the Midwest. After completing a Three-Day Bootcamp with an enterprise customer, I found myself in their dining room wearing a sports coat and trying hard not to look uncomfortable.

I was telling startup and enterprise stories. I was just trying to add to the conversation. For some reason, it was working.

“Why do enterprises struggle so much with innovation?” asked the C-level sponsor.

“Fear. By far the number one reason big companies fail at innovation is because they are afraid. I think that’s it. Fear is what holds them back,” I said.

I went on to elaborate. After I finished telling a personal story, the sponsor asked me to talk at his next executive summit. I was surprised and honored.

I think the reason this played well is because my stories are ones where I’ve successfully transformed myself in a way that resonates with executives today. I’ve been on a multi-year journey in a transition from corporate executive to startup guy. It was a long journey and it didn’t happen overnight. What I now realize is that my journey is exactly the same path that corporate executives are on today. And they are scared shitless.

When your business is being disrupted, when what you’ve been doing for 20 years is no longer working, it’s a very, very scary time for you.

Executives have to re-invent themselves and learn how to do things differently. If they don’t, they will be as obsolete as their legacy businesses. What the sponsor saw in me, was someone who has been through this transformation, and emerged successfully on the other side. I never realized how relevant this was to corporate executives until that night at dinner.

So, if fear of failure is why you fail, how do you deal with failure in the enterprise? 

If I could talk to myself 15 years ago, this is the advice I would give. 

Here are the three phases for dealing with your fear of failure. I’m going to talk about the first step in this post, saving the other two steps for subsequent posts. So let’s begin. 

The first step in dealing with failure in the enterprise is to change your relationship with failure. 

Step 1: Learn to embrace failure, over time

Embrace failure? Yes, embrace failure. I don’t expect anyone in the enterprise to get this right away. It took me at least 10 years to get to this point and to understand the significance of it in the innovation process.

My relationship with failure evolved over time. When I started, I hated failure. I hate losing and failure was just another way to say it. Heck, I still hate losing. It’s part of how I am wired.

“A good loser is still a loser,” my football coach used to say. With respect, I think coach is wrong on this one.

When you are doing anything new, launching a new product, developing a new business model, creating a startup, etc., the most important goal is to learn as quickly as possible. Startups are nothing more than learning experiments. Of course you don’t know how the experiment is going to turn out and there is always uncertainty. That’s why you need to run the experiment! You might think the goal is to generate revenue, make money, get promoted, have happy customers, etc., but that’s not correct. The real goal is to learn, fast. The faster you learn, the better off you will be.

So you need to reframe how you think about failure. You need to change how your mind processes failure. You must transform failure in your mind from something that must be avoided to something that should be embraced. 

I think there are three phases in this transformation process: Avoid, Endure, Embrace. You measure your progress in years. 

AVOID

Initially, we all are afraid of failure. More specifically, we are afraid of being ostracized, and left alone to die a slow and painful death. Ha! I’m serious. That’s what we are really afraid of. The thinking goes something like this…

If my startup/project fails, other people will think less of me. My friends will think I’m a loser. My parents will start worrying about me and whether I can make it on my own. My girl won’t respect me and she’ll leave me. My boss will think I’m an idiot and I won’t get promoted or I’ll get fired. I will lose the power and influence I have today and I won’t increase my power and influence in the future. Finally, I won’t recover from the bad reputation I’ve earned. I’ll die penniless, unemployable and alone. 

Isn’t that ridiculous? Yes it is. And we’ve all had thoughts like these at one time or another. Haven’t you? 

To avoid the pain of being labeled a failure and being ostracized by your community, we convince ourselves we need to avoid failure. Failure avoidance is pain avoidance, so we run away from it. We hide from it. We shift and move to avoid running into it. We can’t even touch failure for fear the stink will be on us. We need to avoid failure at all costs. Facing failure is just too painful and the consequences too severe.

I survived for several years in the enterprise without experiencing much failure. I was fortunate in that most of my projects were successful. The companies I was working for were successful and we were making incremental, sustaining changes to the business models. I felt pretty smart and I rose through the ranks pretty quickly.

After success in corporate American, I decided to create my first startup. Then, everything changed.

All of a sudden, failure was everywhere. My first product failed to attract any customers. My pricing model was all wrong. I had to quickly adjust because what I thought was going to work just wasn’t working at all. I had experienced my first dose of real failure. I was terrified. I could no longer avoid failure. There it was, staring me in the face. 

What happened? Did I hit my head? Did I become stupid overnight?

My best recollection is it took me about a year to 18 months to stop actively avoiding failure. During this phase, I still thought I could avoid failure in a startup environment. I just needed to work harder, and smarter. I was wrong.

ENDURE

During the Endure phase, you start to have a real conversation with failure. You realize failure is present, and it’s going to stay for a while. As long as you continue to do new things, continue to push the envelope of what is possible, continue to innovate, failure is going to be there at some level. The conversation starts to change and it goes something like this.

“Ok, failure, it seems clear you are going to be hanging around for a while. I still don’t like you very much but given the high-risk nature of startup ventures, it seems like you come with the territory. I need to learn to put up with you because you are not going away any time soon.”

I moved into a mode where I wasn’t avoiding failure, but I wasn’t necessarily seeking it out either. I was enduring failure. I was toughing it out. Failure is inevitable in startups and when it would appear, I would grin and bear it. I started to learn how to co-exist with failure.

When I would fail, I still reacted viscerally to it. My body and mind became tense and I would say to myself, “Goddammit. What can we learn from this? How can we make sure this doesn’t happen again? Let’s get the lessons learned so we can move on and forget about it.”

I was enduring failure. Over time, I became calloused to the sharp pain of failure. It became more of a dull pain, more of an annoyance. It made me less upset as I came to accept that failure just “came with the territory.” If you don’t like failure, then stop creating startups, I started to realize. It was helpful to talk to other entrepreneurs. They usually had failure that was even worse, and there misery made me feel better somehow. I’m going through a rough patch, but at least I’m not that poor sucker! He’s screwed!

My best guess is that I stayed in the endure phase of failure from 18 months to about ten years. It took a lot of grit to endure that much failure over that period of time. Most people quit during this process and go back to a steady paycheck with their tail tucked between their legs. Most people are rational.

EMBRACE

The final phase of failure acceptance is embrace. In the embrace phase, you no longer fear failure and you no longer try to avoid it. You aren’t enduring it either. You’ve become pretty comfortable with failure. I’m in this phase now and it feels great.

Embracing failure means you actually welcome it. Let me clarify this point because there is a subtly here. When I run a customer experiment to validate an aspect of our business model, I don’t “hope” it will fail. That would be crazy. I just know the probability of failing is pretty high. While I don’t seek out failure and I don’t wish for it, I know it’s likely and when I find it, I embrace it. I run up to failure and I give it a big hug. 

“Ah failure. I’m so glad you came! Now, tell me everything about you. I want to learn as much as I can from you because I realize your secrets hold the key to making this idea work.”

Only through embracing failure can you truly understand the failure at a deep and meaningful level. You don’t push it away. You sit with it for a while. Talk to it. Understand it. Have empathy for the failure. Ignore what other people think about you. It’s irrelevant. These thoughts are the key to embracing failure and learning the important lessons failure wants to teach you.

In the process of embracing failure, something amazing happens. You’ve redefined failure in a way that brings you peace. 

“I am a student of life. I learn from every experience, and therefore I never fail.”

Once you get to this point, you are truly dangerous. You can do anything. You mind and your heart have awakened and are now free. And what a beautiful gift that is.

I don’t know how long this process will take for you. Perhaps if you are reading this post, you will move through the three phases of failure acceptance faster than I did. Nothing would make me happier than to see you embrace failure and starting using it as a valuable resource in your innovation process.

Dave Linhardt
Founder & CEO


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