For business leaders, failure is going to happen. As nice as it would be to have a smooth, easy path to success as a business leader, failure is an inevitable part of the process. Walt Disney's first animation studio ended in bankruptcy. Sara Blakely couldn't get a manufacturer to take her Spanx clothing line seriously for years.
Today, however, there is little doubt that these entrepreneurs built highly successful companies. A combination of determination and the ability to learn from earlier failures was key to their eventual success.
A mentor taught me that failure isn't final, failure is feedback. It is a chance to gain valuable feedback and make improvements for the future. By learning from the failures that all business leaders face at some point in their careers, you can gain the knowledge and experience you need to pave a path for future success.
1. Resistance to change
When you've stumbled upon a strong business idea, it's only natural that you would want to stay in the same lane, doing the same thing for as long as possible. Business leaders have a tendency to get comfortable with their current systems and practices, especially if they have brought good results in the past.
Unfortunately, this can leave your company less equipped to adapt to an ever-changing marketplace. As the Harvard Business Review notes, the failure of Kodak didn't occur because technology changed -- Kodak failed because its leadership was unwilling to embrace a new business environment.
Not only do leaders need to think about changing their behaviors or business strategies, they also have to be willing to put this kind of change into practice. During a recent email exchange on brand growth, Imran Tariq, CEO of Webmetrix Group, wrote to me, "Business leaders need to develop an agile mindset, especially in the digital age. Being slow to change can be costly, but failing to change at all will prove fatal."
Tariq has raised more than $400 million to acquire and scale seven-figure companies, so his quick note hit home for me on a personal level, as I've struggled with the building of my own leadership development company. Yes, older methods of creating revenue and implementing new learning solutions still work, but the signs of change are written on the wall. It's no different in your industry -- it just comes down to how open you are to change.
2. Financial miscues
Business leaders have the bulk of the responsibility when it comes to managing finances, which can prove to be both a blessing and a curse. Some CEOs view their company budget as gospel, and are unwilling to change it even when market conditions demand it. Others get too excited about potential investments, throwing away money in an attempt to chase the next big thing.
Both extremes can prove damaging for your business in the long run, and will undoubtedly cause your finances to sink into the red. For startups, this can prove fatal.
Eventually, every leader will either make bad investments or refuse to chase good investments. Use these failures to help you understand which investments are truly worthwhile.
3. Bad hires
Even if you have an intensive process in place for vetting potential hires, you never know if someone will live up to expectations until they have actually joined your team. No matter how good of a judge you may think you are, every business leader will make a bad hire at some point.
Even when hiring for low-level positions, a single bad hire can prove extremely costly -- the U.S. Department of Labor estimates that a bad hire can result in losses equal to 30 percent of the person's first-year salary.
The consequences aren't just financial, either. They take a toll on you emotionally. I have made multiple bad hires in my day leading a company and it's hard not to take it personally. You not only are putting the person you have hired in a bad position, but it's also difficult for other members of your team to pick up the slack of team members who leave.
As painful as a bad hire can be, this can present a valuable learning experience that helps you hire better in the future. Just keep in mind this quote from Simon Sinek, which has become my guide: "You don't hire for skills, you hire for attitude. You can always teach skills."
Yes, failure can be frustrating. It can lead to significant financial losses, and possibly even the end of a current business endeavor. But, remember, failure isn't final. Failure is feedback.