Why Mistakes are Essential to Business Growth
When venture capital firms like ours invest in startup and expansion stage businesses, the first task is often to perform an assessment of the various operations within those businesses.
We look at their product development, marketing, sales, and management teams, uncovering what they’ve done well and what they could do better to continue their business growth trajectory.
As a former sales executive, I take special interest in working with these companies’ executive teams to offer sales and marketing support. I focus on things like their sales process and sales methodology to get started.
And, without fail, I often hear this retort when I suggest some new ways of doing things: “We tried that before and it didn’t work.”
Therein lies a common issue with a lot of early stage companies: they’re scared to death of making mistakes. The fault in that approach, of course, is that fear can really stagnate a company’s ability to move forward.
Sure, failure isn’t fun. But how else can you discover what does — and doesn’t — work and explore better ways of doing things?
Embrace your mistakes
Quite simply, expansion stage companies and their executives have to be willing to make mistakes in order to grow.
I read a recent blog post by Doug Washington at Imagine Business Development that I think does an excellent job of addressing the issue of mistake making. He nails the crux of the argument, telling his readers that mistakes shouldn’t just be tolerated, they should be celebrated and learned from.
After all, there’s a big difference between simply making mistakes and making mistakes you can learn from.
So, if you find yourself “on your heels” or lapsing into a defensive mode all of the time, try asking these questions (courtesy of Washington) before trying something new:
- If this turns out to be a mistake, what’s the likelihood that we’ll learn something valuable from it?
- Does this effort have a better chance of being successful than the current steps we are taking?
- If this is a mistake, can we afford it? (If a mistake’s cost is large enough that it would materially impact your ability to continue, then find a way to scale the effort down and test it.)
Honestly, you can’t ever be sure that something new you’re planning won’t be a mistake. But you can mitigate the risk of failure by asking smart questions before making the move.
Avoid repeat mistakes
Serial entrepreneur and Wall Street Journal columnist Mike Michalowicz writes on his blog that making mistakes is almost a right of passage for entrepreneurs. Making the same mistakes over and over again, however, is not something you want to make a habit of.
The entrepreneurs that make repeat mistakes are the same ones that are willing to take uncalculated, off-the-wall risks just for the sake of taking them. That, as you know, is not the type of executive you want to emulate.
So, after you’ve tried something new that turned out to be the wrong move, run through this quick checklist (courtesy of Michalowicz) to find out how you can avoid making it again:
- What were the errors you made? Why?
- Why did the results differ from what you expected?
- What needs to be adjusted so that you get your desired results the next time?
- Where there any benefits from your mistake that you can exploit?
- Are there others that have made the same mistake? What can you learn from them?
- How can you avoid making this mistake again?
- Have you ever made this mistake before? If so, why the heck did you repeat it?
The bottom line is that mistakes are inevitable. While you’ll never nail everything you try, your business will benefit and grow from taking calculated risks with the understanding that not all of them will pan out.
Remember, the goal isn’t to make a mistake. It’s to try new things that make sense for your business, without being crippled with fear that they won’t work. If a mistake occurs, look at it as a learning opportunity that will help you grow.
In the end, ask yourself this question: is it better to try and fail, or never have tried at all? In almost every situation, I’d choose the former.
Brian Zimmerman is a Managing Director at OpenView responsible for delivering value-add consulting service through Openview Labs. You can follow him on Twitter @BrianZimm1.