The history of human advancement is based on learning what does and, more importantly, what does not work. Failure can be a great teacher, if you know how to discern its lessons. The following tips will help you make the best of a difficult situation.
- Know when to quit, then get back up again
Jean-François van Boxmeer, CEO of Heineken International learned when to call it a day after the Democratic Republic of Congo launch of Amstel failed to gain traction:
“We had a lot of successes, but this wasn’t one of them. So, we did what we had to do: We admitted we were wrong, stopped the launch, apologised and moved on by concentrating on our other brands. It was a ‘brand too far’. We lost a lot of money, but we learned from our mistake and didn’t repeat it. And that was the end of it. You can’t always be successful,” he says.
But, as you accept your mistake, it’s worth reminding yourself of what one of America’s most prolific inventors, Thomas Edison, once said: “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.”
Take South African Anda Maqanda, who launched the engineering company AM Group in 2008, but failed to get any contracts. He spent the next two years in full-time employment elsewhere, re-strategising. Maqanda then opened the company again in 2010, and they landed their first contract.
- Define what went wrong and why
You cannot learn from a failure if you have no idea why you failed in the first place. Examine everything: your product or service, your management, your marketing. Revaluate your business plan, your preparation, and your execution. Gather every bit of feedback you can from clients, employees, and anyone who interacted with your business. Perform a thorough analysis.
According to South African business coach Pieter Scholtz, “The first step is to re-articulate your business model – to flesh it out on paper and really think it over… Is what you’re offering merely a copy of a service or product offered by a competitor, or is it a genuine innovation? If it’s the former, it’s time to call it quits. Moderately better goods and services as well as price-cutting don’t work, at least not in the long term. However, if you believe you’ve got something that will truly disrupt the marketplace, then you should keep at it.”
Ask yourself why, for example, you lost your biggest client. Or, if the product was truly disruptive, whether communication was lacking. Did you underestimate your competition? It may not be just one thing.
- Plan the way forward – possibly pivot
While certain things should change if what you offered customers was ill-received (if at all), the entire product or service – or at least the parts that worked – need not be forgotten. Use what was good as a foundation to either build a new company or pivot the existing one.
Businesses such as Twitter, Nokia and PayPal are some examples of companies that gained success through pivoting.
Pieter Scholtz offers some more advice: “Learn from your failure, identify a model that will generate revenue and focus on building that new business model. Pumping more capital into a failing business will not suddenly make it profitable. Instead, as the jockey, you need to find a new, faster, better horse.”