If you ask people to describe what an entrepreneur is, they often use the term "risk taker." But that's only party true. That's because the best entrepreneurs understand how to make educated bets--which are really calculated risks. That means sometimes you go for it, and sometimes you don't, depending on the odds. There's nothing random or wild haired about it.
That said, even the best bet on paper can turn against you. Even the greatest business leaders fail from time to time. Which is why I encourage you to change how think about what it means to fail.
To do that, start by considering a famous quote from Nelson Mandela, the late great leader and revolutionary who said: "I never lose. I either win or I learn." Mandela had made it his mission to battle against racial segregation in his home country of South Africa during apartheid--and was badly beaten and thrown in jail for 27 years for his efforts. But despite those massive setbacks, Mandela always knew where he was going and what he wanted to accomplish. Eventually, he prevailed when he helped the lead the efforts to defeat apartheid while becoming the first black president of South Africa.
What makes Mr. Mandela's quote so powerful is to consider that even when he faced years behind bars, or the brutality of a physical attack, he saw that as an opportunity to learn and, ultimately, to find a way to win.
I believe there are some obvious lessons for entrepreneurs to be learned from Mr. Mandela's mindset. When you're running your business, you are constantly taking on those calculated risks--like opening a new market, or refinancing your debt, or even hiring on a new highly paid vice president. At each turn, we are both winning and achieving our objectives or... our decision backfires on us in some way.
My advice to you is that when you make an educated bet and it doesn't pay off for some reason, don't look at it like a failure: use it as a learning opportunity. That's especially true for anything where the stakes are, as I like to say, above the water line, where the long-term health of the business isn't at risk. The most successful organizations have learned that to thrive over the long run, they need to use failure as an opportunity to learn and to figure out how you can do better in the future. That's what continuous improvement is all about.
There is a famous story along the lines that involves Johnson & Johnson, the medical and consumer good giant that was founded all the way back in 1886. In more recent times, there was a divisional president who saw an opportunity to launch a new product line--something he invested millions of dollars of the company's money in. But the idea proved to be a total bust.
As you can imagine, that president soon got word that J&J's CEO wanted to see him. So the president dutifully reported to the meeting with his head down, knowing what the meeting was going to be about. After the initial small talk died down, the president said to his CEO: "So I guess you will want to fire me now." But the CEO laughed instead. "I just spent millions of dollars training you," he said to the president. "Why would I fire you now?"
How many business leaders do you think would have that same perspective on a situation? Perhaps that's why J&J continues to be a successful company some 130 years after it got its start.
The takeaway for you is that when it comes to dealing with failure in your company, don't think of it as some kind of loss. Rather, turn it into a learning opportunity. The question ask the team is, "what did we learn?" If you can do that consistently, your organization will win out big time over the long run.
Jim is the Author of "Great CEOs Are Lazy". Grab your copy on Amazon!