As I have mentioned in previous posts (here, here) my father used to own a commercial construction company. As such, many of his close friends are very wealthy (it makes sense; buildings are expensive, so if you are going to build one you tend to need a lot of money). Thus, I was fortunate to grow up around a lot of high net worth individuals and have gained a lot of insights from them over the years. Although wealthy, they tend to live modestly, are committed to their businesses, and balance work and pleasure. But there is one attribute many high net worth individuals share and it is the topic of today’s post.
My dad’s best friend, JS, is fantastically wealthy, although you wouldn’t know it if he walked by you on the street. He founded and is the CEO of one of a very small handful of companies that can lay municipal grade concrete sewer and water pipe. His company, although private, is worth hundreds of millions of dollars and JS personally makes $20-30M per year. But it was not always this way. JS came from humble beginnings. He knew from a young age that he wanted to run his own company so he started, and bankrupted, three separate companies before he hit it big with his current enterprise. Speaking with JS, he will readily admit that he probably would not have been as successful with his company today had he not failed at his prior three companies. In short, it was the failures that taught him the skills necessary to be successful (and the first of these is “don’t fear failure”).
Another example: As readers of my blog know, I am currently working in a company that was recently acquired by a Fortune 500 company, and the original founder has a very similar story. He was working for an IT integrator and thought he could do a better job addressing market needs by starting his own company. So, he left and did just that. The first few years were very rough as he had numerous cash flow issues and struggled to get product on time from major suppliers. He decided to deal with this issue by hiring engineers to create his own products. It was a disaster! The products didn’t work well, customers were complaining, and they were very close to shuttering the doors for good. However, he persisted and worked closely with customers to understand their needs better than competitors and eventually the product quality improved and the business grew. In 2013 he sold the company for just under $300M, netting himself about $100M in the process. To this day, he tells audiences that it was the early product failures that forced him to become more responsive to customer needs which, ultimately, made his product wildly successful in the market place.
What do these stories about successful entrepreneurs have to do with the corporate world? Well, large companies are always striving to drive innovation, to bring the entrepreneurial mindset to the corporate world to drive, as it is called, “intrapreneurship.” This is challenging as the corporate world tends to focus de-risking processes to enable steady growth. Wise leaders know these two needs are at odds as you cannot create disruptive growth without risk and when you take risks you are going to experience failure. Two quotes on this topic are illuminating:
- The former CMO of a Fortune 50 company (conglomerate) when asked what advice he had for middle managers to take their career to the next level, he responded:
“Fail. And don’t just fail, fail big. I mean, really mess up. Now, don’t purposefully try to make mistakes, but ensure you are taking risks. If you have never failed, you are not pushing hard enough. Because failure is inevitable, you need to know how to deal with it, how to pick yourself up and motivate your team after failure. As a C-level executive, a big part of my job is knowing how to deal with failure, so it is best you learn this critical skill early in your career.”
- The current CMO of a (different) Fortune 50 company (different conglomerate) gave a speech where she said the following:
“I don’t hire straight-A students. I don’t even like hiring students from Ivy League schools. Why? Because they have never failed. Because they have never failed, they are so terrified of failure that they don’t take risks. This is a huge problem for the company because if we are not willing to take risks to disrupt ourselves, you better believe our competitors will take risks to disrupt our business models. We need intelligent risk takers and we need them fast!”
What is the moral of the two stories and two quotes above? It’s this: If you want to move up in the corporate world you will need to take risks. Risks sometimes don’t pay off, leading to failure. Failure is a part of life (in general) and is unavoidable in the corporate world. If you want to get ahead and become more comfortable taking risks and dealing with failure, follow these tips:
Push yourself and your team harder.
If there is no risk of failure, you are not pushing hard enough.
Communicate risks and have plans to measure and mitigate them.
Bosses don’t like surprises, so keep them informed of potential risks and be open and honest about the risks you are taking.
When failure happens, motivate yourself and your team.
One of my favorite quotes is, “Adversity doesn’t create character, it reveals character.” Leadership is easy when everything is going well, its much harder when things are not going well. Don’t be too hard on yourself and don’t be to hard on your team. Pick yourself up, dust yourself off, and move on.
Most importantly, it’s not failure if you learn from it.
I honestly believe it is true and so critically important that I am going to write it again: it’s not failure if you learn from it. After any setback, do an “after action report” also known as a “post-mortem” analysis. Ask yourself what went well and what didn’t? What will you do differently next time?
Follow the steps above and you will become a more intelligent risk taker which will prepare you for success at the highest levels of the corporate world.