This is the first in a two-part series on how your business can not only survive but also thrive after a major setback by embracing failure as an opportunity. This blog discusses successful businessmen who persevered after failures and ultimately became successful. Part 2 will contain specific tips on how you can achieve a successful failure for your business.
After two failed attempts to design an economical and reliable car, Henry Ford lost his financial backing and the confidence of people in the car business.
Undeterred and tired of those who knew nothing about design injecting their opinions, he found a more appropriate business partner from Scotland, Alexander Malcomson, who promised to not interfere in the design process.
With Malcolmson’s backing, Ford designed the Model T, which debuted in 1908 for $825. In the first year, 10,000 were sold. When the price dropped to $525 four years later, sales zoomed and Ford had a 48 percent share of the automobile market.
Henry Ford used what he learned from his failures to make a better product. “Failure is simply the opportunity to begin again, this time more intelligently,” he said.
Get Past Feeling Like a Failure
As a Turnaround Authority, I practice this philosophy when I work with companies that are failing. When I meet with senior management, they are often feeling pretty bad that the company is having difficulties. They may be feeling like failures on several levels.
One of the first things I try to do is to help them focus not just on past failures, but the opportunities the company now has in its current situation. These can often be difficult to see when your business is not doing well.
Great examples can be found in companies that not only survived the Great Recession but also actually came out stronger. An article in the Wall Street Journal in 2012, “For Big Companies, Life is Good,” referred to an analysis done by the Wall Street Journal of corporate financial reports. It found that “cumulative sales, profits and employment last year among members of the Standard & Poor’s 500-stock index exceeded the totals of 2007, before the recession and financial crisis.”
These companies turned to deep cost cutting and cautious investing to outperform their competitors. “U.S. companies became leaner, meaner and hungrier,” said Sung Won Sohn, a former chief economist at Wells Fargo & Co.
What is a Successful Failure?
Once you’ve acknowledged that your company is failing and that this situation can be overcome, that presents you with an opportunity to emerge leaner and meaner, what is termed a “successful failure.”
Let’s say your company does totally fail. Look at that as an opportunity to try again. Here’s just one example of a guy whose business failed and he came back even stronger.
Gary Heavin dropped out of college in 1976 and started a gym, becoming a millionaire by age 25. But his rapid expansion and high overhead costs led to financial difficulties and by age 30 the company went bankrupt.
Taking the lessons he learned from that business failure, Gary started Curves, a women-only gym. Again, he met with rapid success. He then franchised the business, which now has 10,000 locations around the world, and he is a billionaire.
Failures can be turned around into success stories if you perceive them as opportunities. After all, that’s what I do as the Turnaround Authority. It can happen for your company, too. Come back for part two for my tips on how to get started.