by: John Caddell
I've been thinking a lot about failure. Don't worry--not about personal failure, but about failure in business and what it means (like here, for example).
Here's what it's typically meant: time to find a new job. And as we watch the person responsible for the ill-fated Project Fiji in his office packing his books and photographs into printer-paper boxes, our self-preservation instincts take over, and tell us, "Don't be like that guy." (At its extreme, we have the pinnacle of self-censorship and risk-avoidance, the bureaucracy.)
Well, all that anxiety about failure is utterly wrong, according to Paul Ormerod, an economic forecaster and founder of Volterra, a business analysis consultancy. Interviewed in June's Harvard Business Review (free link), Mr. Ormerod tells us that failure is the "defining characteristic of biological, social and economic systems."
Statistics he cites bear that view out: 10% of American businesses die each year; only nineteen of the world's largest 100 companies in 1912 were still in that position in 1995.
But rather than viewing failure as, well, failure, Mr. Ormerod asserts that expecting failure and embracing chance hold the key to success in business. Says he:
The companies that are most able to explore and innovate - something akin to random [biological] mutation - and then rapidly and flexibly adapt when an innovation succeeds or fails, will do best.
How well does that describe your organization?