How the ‘Failure to Success Model’ Should Work

There are three components to the ‘Failure to Success Model’: Fail Frequently, Fail Fast, and Fail Frugally.

1. Fail Frequently. If you are not failing you are not taking enough risk. Complacency is the nectar of permanent and unrecoverable failure. Venture capitalists plan for failure. In order to identify big ideas VCs invest in unproven ideas knowing full well that 8 or 9 investments out of 10 are going to fail. Entrepreneurs that try different things in marketing, operations and personnel without having all the answers will build powerful, efficient and profitable companies.

2. Fail Fast. When you realize something is not working - cut your losses. Too often there is too much emotional investment in a project or a plan, to be able to separate the emotion from what the data reveals. For example, Sony had engineers in the company that realized the digital download of music was the future of the Walkman, a product that Sony had developed into a dominate brand and category leader. Management viewed the development of a new business format for the Walkman as destroying hundreds of millions of dollars of profits. The myopic decision was made to continue with the existing Walkman business model to milk profits, even when the data pointed in a different direction. The result: the iPod and the crippling of a once brand dominant company. Why: Unwillingness to fail fast and to hang on to an emotional investment for Sony not only cost them billions but nearly destroyed the company.

3. Fail Frugally. When experimenting with operations, marketing ideas and processes do not bet the family farm on these new ideas. Do as GE, Google or Apple do. Allow individuals freedom to try new things that are incremental in scope and then reward success and praise failure. This leads to a culture of innovation that can eventually be the birthing of big ideas that can change the course of a company or add significant profits to the bottom line.

Failure is not an option, it is a requirement. Just do it frequently, fast and frugally and big successes are inevitable.