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Why SMEs shouldn't fear failure

     

Behind every great business success story lies a string of failures. Failure is an essential component of innovation. Without innovation success is dead. Innovation involves taking risks. A fear of failure is paralysing and damaging to business because it makes people more risk averse.

According to business statistics produced by the House of Commons in December 2017, there were 5.7 million SMEs in the UK making up over 99 per cent of all businesses.

Our economy is relying heavily on SMEs to increase the UK’s productivity and growth. With the uncertainty of Brexit ahead, we need SMEs to come up with innovative solutions for growth now more than ever before.

Overly risk-averse businesses will have to compete with those taking risks and leading innovation. SMEs shouldn’t fear failure. They need to review their relationship with failure if they are to survive.

The truth about failure

Everyone experiences failure. It doesn’t mean you are undeserving or not good enough. It simply means you have an opportunity to do things differently. Importantly, failure doesn’t mean giving up. It shouldn’t define you, but guide you another step closer to your goals. Making sense of failure and overcoming the challenges it brings works for business as much as it does for individuals.

Yes, failure is uncomfortable, painful even. But, dwelling on failure and shying away from making mistakes in the future is limiting. If you let failure define you then it’s likely you will always be left asking the question ‘what if?’

Many people have a limited idea of what success is, but can picture failure easily. The fact is we need to reconsider our views on success and failure. Rather than seeing success and failure as opposing forces, it’s time to join the two together. Catastrophes CAN and DO turn into blessings.

Chloe Watmore, multi-award-winning MD of Chesterfield-based Thermotex Engineering, has a refreshing view of failure. In a Natwest blog post on Leadership Lessons: why SMEs shouldn’t fear failure, she is quoted as saying ““If we get something wrong – something we thought our system was strong enough to cope with – we say: ‘Hooray! We’ve broken the system!’ Because then we get an opportunity to fix it, learn from it and move forward.”

Why do we find failure so difficult?

In the UK, we have to question whether our sense of British pride and an unhealthy fear of failure are getting in the way of success. Not all businesses have the same refreshing view on failure as Thermotex. We’ve lived for a long time in the UK with a culture in business where employees are carefully controlled and berated for mistakes.

Traditionally employees weren’t given permission to challenge assumptions and create new ideas. There is still a real stigma attached to failure in the UK and it’s having an impact on potential for start-ups and SMEs.

Organisational psychologist and curator of the Museum of Failure, Samuel West, believes that we need to change our relationship with failure. His work focuses on what organisations can do to promote a climate of exploration and experimentation and learn from failure, rather than feel paralysed by it.

But it’s not all doom and gloom when it comes to our attitude to failure. There are plenty of entrepreneurs out there turning failure on its head. There are many positive signs that businesses are embracing innovation and creating cultures where employees feel supported to explore ideas, even if some of those ideas fail. This is great news for business. By challenging old-school views on what failure means, businesses are creating better organisational cultures.

Why and how failure should be embraced

Henry Ford once said “Failure is the opportunity to begin again more intelligently.” Depending on what you do with failure, it can actually be viewed as an essential stepping stone on the pathway to success. It builds grit, determination and resilience. It guides us away from what isn’t working, towards what might.

Ford’s first two automotive efforts went bust. Sir James Dyson spent 15 years and all of his savings to create 5,126 versions of the Dyson vacuum cleaner before he hit upon success. According to the Sunday Times Rich List 2017, his net worth is now £7.8 billion. Perseverance paid off after 5,126 fails!

Company culture is the key to an innovative environment. Employee engagement is a big part of positive business culture and is essential for innovation. Businesses should be encouraging open and honest dialogue, and making it easier for employees to challenge the rules.

Psychologically, employees need to feel safe to get things wrong and learn from mistakes. It’s not a culture we are used to, but there are many SMEs successfully making the cultural shift.

For more information on positive business culture, read our report on The Culture Economy.

There are still things you can and should do to avoid failure

Having waxed lyrical about failure being a good thing, repeated failure isn’t always a positive. If lessons aren’t being learned, and the same mistakes are being made, then a positive outcome is unlikely.

Encourage acceptance of mistakes in your business. Give your employees creative platforms to try new things and not feel bad when things don’t work out. Instead, use failure to instigate conversations and effect change.

Be aware of the most common reasons businesses fail and do what you can to avoid those pitfalls. But, embracing the challenges failure brings is what will set your business apart from those who shy away from the same.

Fear of failure is more likely to destroy your business than save it. Never listen to an inner voice telling you you’re not good enough, not smart enough or not capable enough to succeed. Successful people aren’t shackled by a fear of failure.

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