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If You Want To Succeed, You Need To Embrace The ‘F’ Word

What do Sir James Dyson, the Mercedes F1 team, Pixar, Google and the airline industry have in common?

They’re hugely successful, yes. But the thing that links them is they never shy away from the ‘F’ word—Failure. Instead, they face and learn from their mistakes, errors and mishaps. So says Matthew Syed, award-winning Times journalist and best-selling author of ‘Black Box Thinking: Marginal Gains and the Secrets of High Performance’ (John Murray).

“We have an allergic attitude to failure,” he says. “We try to avoid it, cover it up and airbrush it out of our lives.

“For centuries, errors of all kinds have been considered embarrassing, morally egregious, almost dirty.

“This conception still lingers today. It is why … doctors reframe mistakes, why politicians resist running rigorous tests on their policies, and why blame and scapegoating are so endemic.”

This notion of failure needs to change, he writes. “We have to conceptualise it not as dirty and embarrassing, but as bracing and educative.”

That’s because success in business (as well as in sport and in our personal lives) can only happen when mistakes are confronted and learnt from and there’s a climate in which it’s safe to fail.

It’s what the airline industry has done so successfully, he says. Instead of concealing failure, the aviation industry has a system where failure is inherently valuable and data-rich, says Syed.

In fact, his ‘Black box thinking’ refers to the black box data recorders that all aircraft must carry to provide information in case of accidents. One box records instructions that are sent to all on-board electronic systems and the other records the voices in the cockpit.

“Mistakes are not stigmatised, but regarded as learning opportunities,” he says. After a crash, an independent team investigates.

“The interested parties are given every reason to cooperate since the evidence compiled by the [independent] accident investigation branch is inadmissible in court proceedings. This increases the likelihood of full disclosure.”

What’s more, after an investigation into an accident is completed, the report is made available for everyone.

“Every pilot in the world has free access to the data,” writes Syed. “This enables everyone to learn from the mistake, rather than just a single crew, or a single airline, or a single nation.”

Syed gives the example of United Airlines Flight 173 which took off from JFK International airport in New York on December 28, 1978, bound for Portland Oregon.

Just before the airplane went ito land, the flight crew became convinced the landing gear hadn’t locked into place. They then spent so long trying to fix the problem that they ran out of fuel and had to crash-land into a residential area, killing eight people onboard.

An investigation discovered that the flight engineer hadn’t been assertive enough in telling the Captain the fuel was running low. The Captain meantime was obsessed with trying to fix the landing gear problem and avoid giving passengers a bumpy landing.

As it turned out there had not been a problem with the landing gear in the first place.

Afterwards, new protocols were put in place and training methods were revised. As a result, nothing quite as bad has happened again.

So much so that flying on airplanes is now safer than any other form of travel because the industry investigates and learns from its mistakes.

“Openness and learning rather than blaming is the instinctive response – and system safety has been the greatest beneficiary,” Syed told Director magazine.

Dyson Vacuum Cleaners

Sir James, the designer, inventor and entrepreneur, is another committed to learning from failure.

He made 5,127 prototypes of his bagless vacuum cleaner before he got it right. This practice has obviously paid off because Sir James is now worth more than $3 billion.

“Creative breakthroughs always begin with multiple failures,” says Sir James. “…True invention lies in the understanding and overcoming of these failures, which we must learn to embrace.”

Without them, innovations won’t happen, he says. “Failures feed the imagination. You cannot have the one without the other.”

Great inventors always develop their insights not from an appraisal of how good everything is, but from what is going wrong, Sayed wrote in the Daily Mail.

Using Failure To Grow Your Business

Obviously, failure is only useful if it’s acted upon. “You can build motivation by breaking down the idea that we can all be perfect on the one hand, and by building up the idea that we can get better with good feedback and practice on the other,” says Syed.

Some of the world’s most innovative organisations like Pixar, the Mercedes F1 Team and Google “interrogate errors as part of their strategy for future success.”

Take Google’s decision to test which shade of blue in its advertising links in Gmail and Google search worked best, for example.

Rather than ask its designers to choose the shade of blue for those links, Google decided to run tests known as ‘1% experiments in which 1% of users were shown one blue and another in which 1% of users were shown another blue. Then Google went further and ran 40 other experiments showing all the shades of blue.

It paid off: Google found the perfect shade of blue (the one that users were more likely to click on) and made an extra $200 million a year in revenue.

Why Don’t Companies Embrace Failure?

One of the biggest problems in business is the collective attitude we have to failure, says Syed.

“We love to think of ourselves as smart people, so we find mistakes, failure and sub-optimal outcomes challenging to our egos,” Syed said in an interview with Director magazine. “But the reality is, when we’re involved in complex areas of human endeavour—and business is very complex—our ideas and actions not being perfect is an inevitability.

“If we’re threatened by our mistakes, and become prickly when people mention them, we don’t learn from them. We need to eradicate the idea that smart people don’t make mistakes.”

To really be successful, businesses need to encourage a company-wide failure-embracing culture which in turn will create a “process of dynamic change and adaptation”.

“Success happens through a willingness to engage with, and change as a result of, our failings. Get that right and everything else falls into place,” he says.

If you would like to download the CFO Centre’s report on Risk you can do so here

You can also arrange a complementary 1:1 Finance Breakthrough Session with one of India’s top CFOs here

The Twelve Days of Christmas with your Part-Time CFO

On the first day of Christmas, my part-time CFO gave to me an introduction to business reporting and advice on creating a business strategy. 

On the second day of Christmas, my part-time CFO gave to me more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the third day of Christmas, my part-time CFO gave to me the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the fourth day of Christmas, my part-time CFO gave to me ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the fifth day of Christmas, my part-time CFO gave to me the key to productivity, ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the sixth day of Christmas, my part-time CFO gave to me better ways of business processing, the key to productivity, ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the seventh day of Christmas, my part-time CFO gave to me the way to do business legally, better ways of business processing, the key to productivity, ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the eighth day of Christmas, my part-time CFO gave to me the way to keep cash flowing, the way to do business legally, better ways of business processing, the key to productivity, ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the ninth day of Christmas, my part-time CFO gave to me the way to keep my bank happy, the way to keep cash flowing, the way to do business legally, better ways of business processing, the key to productivity, ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the tenth day of Christmas, my part-time CFO gave to me a great exit strategy, the way to keep my bank happy, the way to keep cash flowing, the way to do business legally, better ways of business processing, the key to productivity, ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the eleventh day of Christmas, my part-time CFO gave to me the benefit of business planning, a great exit strategy, the way to keep my bank happy, the way to keep cash flowing, the way to do business legally, better ways of business processing, the key to productivity, ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

On the twelfth day of Christmas, my part-time CFO gave to me a way to stop fiddlers fiddling and protect my equity, the benefit of business planning, a great exit strategy, the way to keep my bank happy, the way to keep cash flowing, the way to do business legally, better ways of business processing, the key to productivity, ways of doubling profitability, the secret of lowering my tax liability, more ways to attract money, an introduction to business reporting and advice on creating a business strategy.

And in the spirit of Christmas, you can discover all that I learnt by downloading these 12 free business growth reports—jam-packed with practical ideas and information for every SME owner.

Business Reporting:

  • The three key financial statements you need and why they are so important
  • How to interpret your key financial statements and use the information to drive growth
  • How to reach a place where you actually enjoy reviewing your financial statements!

Strategic Funding report:

  • The main sources of funding available to SMEs (including advantages and disadvantages of each one)
  • New funding sources which make funding available in days or weeks rather than in months or years from the application date
  • How to get independent specialist advice to walk you through the process and present your case for the best chance of success.

Tax Planning report:

  • The benefits of ensuring your business is optimised for tax
  • The importance of using the best tax advisors
  • The importance of using the best legal advisors.

Profit Improvement report:

  • Why you need a clear, measurable strategy for increasing your profit
  • The four ways to increase your profit: sell more, get customers to buy more frequently, increase prices and reduce costs
  • The main reasons for low profits and how to avoid being unprofitable.

Outsourcing report:

  • How to access expertise that you would otherwise not be able to afford
  • How to source talent to focus on important priority areas in your business
  • How to increase efficiency and productivity across all areas of your business.

Internal Systems report:

  • How to create systems and get fully in control of your business
  • How systems and internal controls create more headspace for the senior team
  • The benefits of great systems and internal controls for making your business more efficient and more valuable.

Compliance report:

  • How to free up headspace and sleep better at night by devising a strategy to ensure your business is always fully compliant;
  • Why it can be disastrous for business owners who don’t have a compliance strategy;
  • How The CFO Centre can devise a strategy specific to your business, to ensure you always remain fully compliant.

Cash flow Management report:

  • Why poor cash flow is the number 1 reason businesses fail
  • How to create a cash flow management strategy to avoid running out of cash
  • How to find cash in places you may have never considered.

Banking Relationship report:

  • Why the banks lend to some businesses but not others
  • How to secure lending from your bank
  • How to secure preferential rates and better terms from your bank
  • How a part-time CFO can manage the relationship with the bank so that you don’t have to.

Exit Strategy report:

  • The things you need to do early in the process to plan your exit
  • Why ‘exit planning’ has a lot to do with ‘running a good business’
  • How to make your business attractive to potential buyers and what they are looking for
  • How to evaluate what is important to you when selling your business
  • How to maximise your sale value and increase your multiples
  • Property, Pensions, IP, Contracts, ‘The Numbers’
  • The due diligence process and how to make it much easier for yourself.

Implementation Timetable report:

  • The best way to build (or redesign) your business plan so it works as a simple but effective tool for ensuring you reach your goals
  • Key elements of a great business plan and how to decide what to include and descaled
  • How to set clear milestones for your implementation timetable
  • How to get your team aligned so that everyone is working towards a common goal.

Risk Assessment report:

  • How to sleep better at night by identifying major risks and building a strategy to avoid them
  • How business owners of great businesses manage their risk so they can free up head space and focus on creativity, innovation and growth

How a part-time CFO can conduct a full, watertight risk assessment process with you.

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