The need to embrace failure

The need to embrace failure

Friday, October 28, 2016 Posted by Andy McCarron
How to make the most out of business mistakes

What is it about business failure that makes us turn away and avert our eyes? Such was the central question during the session at EiG which looked at what happens when things go wrong within an organisation and what we should do to ensure we learn from previous mistakes.

Session panellist Christina Thakor-Rankin, now a principle consultant at 1710 Gaming and previously experienced at a number of online gambling operators, said the issue at most companies was an extreme unwillingness to truly examine what happened when a project goes totally wrong.

“The problem with a lot of companies is the fear of failure,” she told the audience in Berlin. “When something goes wrong, everyone goes into defensive mode, looking for excuse as to why it wasn’t their fault. So what often happens, the wrong people get blamed.”

She said this process of evasion not only meant that the initial problem would very often not be understood fully, but also that it would almost certainly and inexorably lead to similar failures further down the line. “You are so busy trying not to be the person in the firing line, you don’t understand what went wrong and you set yourselves up for another failure,” she added.

Sven Ivo Brinck, now heading up his own consultancy but previously the chief executive at German online operator MyBet, agreed that the blame game needed to be avoided if a company was to avoid making the same mistake again and again He said management should step in to ensure that the failure was understood.

“The usual finger-pointing game can be avoided if a general amnesty is instigated whereby management can avoid who was to blame and instead concentrate of cleaning the situation up,” he said.

He pointed out that when he joined MyBet the company was facing up to severe troubles (and is till coping with the fallout according to the company’s latest corporate update this week). “You always come to a point where you take uncomfortable decisions,” he said. “If your company isn’t successful, you have to change things. Otherwise you cannot survive. Nobody likes to fire people. Nevertheless, you have to do it. No one likes to cost cut. But it’s important for everyone in the business to understand that change has to come immediately. Cut as deep as is necessary.”

He added that this was particularly important when it came to the customers. “The most important thing is to keep the customer and avoid them running away because something went wrong,” he said. “You really need to explain what happened.”

Failure to communicate can happen at big and small companies alike. James Oakes, now a director at Zeal Networks but previously the founder of lottery product startup Geonomics said that one of the biggest, and perhaps most surprising failures, at the level of startups was that the focus on the product was often missing.

“There are so many things that can go wrong in the life of a startup,” he said. “Our big mistake was not to put a laser beam focus on the single biggest problem we have – that is creating a product that a customer loves. It is a surprisingly difficult thing to do. There are so many other things that can distract you.”

Though Geonomics was successful in raising funding, he said that it took the investment at validation that the product was as good as it could be when that simply wasn’t the case. “We forgot the consumer at the end. So by the end, we had a big sales funnel and then once the product hit the ground, it didn’t get the traction, and as much as we had built the sales funnel up, it fell away when the product didn’t work.”

Totally Gaming says: Business failures can often take on the feel of war stories that are told and re-told but often with very little explanation or understanding of what went wrong and what can be learned from the mistakes. Success has many fathers and failure is an orphan goes the saying, but this panel session proved that embracing what went wrong often leads to success in the future. 

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