You are going to fail! This is the dirty little truth about being an entrepreneur.
Sometimes your failures are just small incidents.
Perhaps those might more appropriately called “setbacks.” Other times, failures are epic! These are the crash and burn events that can drive a company under. The real key to success is to learn from the mistakes so that you not only don’t repeat them but are able to build a new process or paradigm to avoid the collision next time.
The secret to learning from your mistakes is to conduct what the military calls an “After Action Review.”
Typically, you gather a group together to discuss the operation. Be sure to include the people who are actually doing the work, not just management. They are the guys who really know what went wrong.
There are four steps to change failure into success:
- Define the Problem
Most often what you see on the surface as a “failure” is really just a symptom of some deeper problem. Gather sufficient information so that you can truly understand what went wrong. This is the hard part because it requires people to admit mistakes.
- Identify the Key Points of Failure
Evaluate the data and determine the root cause of the failure. Identify the causal linkage. You must understand how the variables interact.
- Develop Actions that can Correct the Problem
Test the key variable that caused the problem and try to understand what changes will cause a positive outcome. Develop very few concrete actions that will prevent the same mistake from happening again.
- Implement the Corrections
Each step is important, but the implementation is the key. You can learn all you want, but if your knowledge is never put to work it is of little value. This process does not stop at the end of the meeting, it must become an ongoing effort.
The secret to success is brutal honesty.
It is all well and good to portray optimism to the outside world; but behind closed doors, you have to tell it like it is – no sugar coating. However, you must be careful. This process can appear to subordinates as a possible “witch hunt” and you are looking for the scapegoat to blame things on. Only the leader can prevent that by making it clear you are only seeking to correct what went wrong. This means you cannot cast blame (even if it seems warranted) or punish the messenger of the bad news.
This process can be formal or informal, but it needs to be institutionalized into your corporate culture. Investors know that things will not always go as planned, but they also want to have confidence that the management team in whom they are investing know how to make corrections and turn setbacks into success.