You know the old adage, “Keep your friends close and your enemies closer?” It refers to the importance of keeping a vigilant eye on things that may be a threat to you. The same applies to business and failure; as a business leader, how you deal with failures can be the downfall of your business, or can result in opportunities for subtle improvement, or even disruptive positive change.
Who better to speak on this topic then long-time CEO Club member, Mark Coopersmith, an accomplished Entrepreneur, Executive, Educator, and Author of THE OTHER F WORD: How Smart Leaders, Teams, and Entrepreneurs Put Failure to Work. As an award-winning professor at U.C. Berkeley’s Lester Center for Entrepreneurship, Mark enlightened us with his learnings on how to leverage failure to drive innovation, growth, and employee engagement in your organization.
Mark shared a series of study cases that illustrate this concept. Ever heard of the app Burbn? Not many people have… it was first launched as a full-suite app that let users check in at particular locations, make plans for future check-ins, earn points for hanging out with friends, post pictures of the meet-ups, etc. This app wasn’t very successful; users thought the app was too complicated and weren’t using most of the features. The company began to delve deep into their failure, asking users for feedback and focusing on giving their customers what they wanted. It quickly became clear that even though the app did not gain much traction, there was one feature that users loved – and that was the photo sharing app. Founders of the app decided to scrap 90% of the product and keep only the photo app, aiming for the utmost simplicity. The new app was called Instagram and was sold for $1 billion to Facebook in 2012.
There are countless examples of companies who were cognizant of their failures and set out to learn from their mistakes, and plenty others who failed to do so. Mark’s insights on how to leverage failure to discover new opportunities resonated deeply among the attendees, who’ve all faced failure at some point in their careers and learned to turn downfalls into chances to learn and do something new and different.
How can you leverage failure for innovation? Mark Coopersmith and co-author John Danner have identified the 7 Steps of The Failure Value Cycle and created a model that can be used to dissect and re-purpose failure. Here are some key elements:
The Failure Value Cycle
- Respect | Accept that failure is a natural part of business; no risk = no innovation
- Rehearse | Prepare for different circumstances
- Recognize | Identify the mistakes that were made
- React | Act swiftly to acknowledge the issue and resolve it before it grows and spreads
- Reflect | Look back to understand what went wrong and why
- Rebound | Re-craft your approach based on your learnings from the failure
- Remember | Carry these lessons with you into your next mission and objectives
Our gratitude goes out to Mark Coopersmith for a thought-provoking discussion on how we, fellow CEOs and Business Owners, can be more successful in business.