Interestingly, more and more articles in the business literature are embracing failure. Seems counterintuitive, right? So why is failure becoming so popular?
As Jeff Bezos, the CEO of Amazon and one of the two the richest people in the world, has said "If you are going to take bold bets, they're going to be experiments, and if they are experiments, you don't know if they are going to work".
Businesses of all stripes have been increasingly confronted with the need to innovate and embrace change. There are many forces driving this: new technologies, new competitors (particularly of the online variety), and the vast amounts of information available online on products, services, prices, and customer experiences, among others.
With change comes risk and with risk comes the potential for failure. However, maintaining the status quo has its own risks--new or existing competitors make changes and your business falls by the wayside. Eastman Kodak, Sears, Blockbuster, and CompUSA, etc. learned this the hard way.
As small and medium-size businesses innovate and change, they are likely not in a position to take risks like Jeff Bezos and Amazon. So, how to innovate/change, while minimizing the downside and maximizing the chances for ultimate success? Here are some steps your business can take:
- Reduce the risk of failure. Understand the risks up front and take reasonable steps to avoid or mitigate them. A good place to start is talking to a sample of your key stakeholders−customers, employees and suppliers−to identify how your proposed change will be received and best implemented.
Adjust your plan based on their feedback. Also, use this information to more fully understand the potential downsides and whether they are acceptable. A caution here, you need to do adequate due diligence, but it is likely not cost effective to track down every possible risk. Besides, if you take too long, your competition may beat you to market.
- Limit the downside, learn what the problems are and fix them prior to full launch. One away to do this is through a pilot test with a small sample of customers. Use the pilot as a learning opportunity to refine your changes. If you are making a product the corollary is a Minimum Viable Product (MVP).
MVP is an approach where a new product is developed with sufficient features to satisfy early adopters. The final, complete set of features is only designed and developed after considering feedback from the product's initial users.
- Once you are satisfied, roll out the change to the rest of your customers but continue to be diligent in your follow-up. Again, collect feedback from your key stakeholders. If something is not working as planned, fix it as quickly as possible.
As Jeff Bezos points out, view change initiatives as an experiment where you try things and learn what works and doesn't. The key is to reduce the risk of failure to the extent possible, and if you do fail, fail quickly (but not big), and learn why you failed and fix the problems fast.
Seymour Burchman is a managing director at Semler Brossy Group and can be reached at email@example.com. Burchman is also a volunteer with the Naples Chapter of SCORE that offers free and confidential counseling to small businesses. To register, call 239-430-0081 or visit http://naples.score.org/mentors.