Wednesday, June 15, 2016

Can failure be a disruptive corporate strategy?

Working for a startup can cause a number of ill-fated thoughts to pop into your head; it can also create grandiose visions of what may be in store, but the reality is that a lot of startups fail. They fail to create a product, they fail to go to market at the right time, they fail to price their product competitively, or they just fail for some unknown reason that no one could have ever predicted. This can happen even when a company spends time every day on strategic planning. This is the crazy but also exciting aspect of working in a startup environment.

Much of what we have been studying in this class is about strategy, positive but realistic goal setting, establishing a clear differentiator in the marketplace, and setting a proper mission and vision, which all tend to lean towards positive and optimistic thinking about your company.

While we have studied a number of success stores where this is taking place every day, there are a number of anecdotes of failed strategic efforts and failed go-to-market products. When a company's strategy doesn’t work, many times they have not been able to cope with that change and disappointment and have continued to run down an unsuccessful road to complete catastrophe.

I say fail fast, fail often, but fail forward.  A number of companies have embraced this mantra as a way to move quickly in meeting market demand. They have built up decision making systems and governance processes to encourage taking risks, pushing the limit and failing, but recovering quickly, learning from the situation and applying it to the next challenge.

Many times startups are venturing into completely unknown territories where failure in some way is guaranteed, but the ones that make it tend to be adaptive and respond in myriad ways when failure presents itself. This can be a core competency, this can be a mission, a vision, and can propel a company to success.


More and more examples are starting to pop up where failure is encouraged. It may not be explicitly written in the mission and vision statements of organizations, but companies are creating environments and ecosystems for successful failure - as oxymoronic as that sounds. Eric Ries and the lean startup have coined the “Minimum Viable Product” or MVP and the idea of constant iteration on that MVP. Ultimately the premise of The Lean Startup is to get out and fail, but do it quickly, intelligently, and learn for the next round. I say we start teaching and embracing failure on a more thorough strategic level and people will push the limits of what is possible in an organization.

1 comment:

  1. Clayton, I love this concept of disruptive failure, and my company has supported it. It takes a a big cultural shift, though, and a personal shift, especially for middle management. They're often at the sharp end of innovation initiatives, and failure historically has been frowned upon. That's especially true if you're hoping to move to upper management. But it's healthy, and technology helps you do it faster these days and at a much lower cost.

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