Date post: | 13-Sep-2014 |
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Business |
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THE
FAST-FAILUREFRIENDLY FIRMFAIL YOUR WAY TO SUCCESS
http://www.flickr.com/photos/geyring/
PROLOGUEWHY IT MATTERS
Pacemakers Post-its
PenicillinThe Light BulbThe Microwave
Corn FlakesDiscovery of the Americas
Kitty HawkEvolutionThe Slinky
$These were all failures that led to mondo ducats
But, we shouldn't just say "Whoo hooo! Let's fail
more!"
Ideally, we should fail more, but fail smarter
that means we want to fail when….
1. the costs of failure are low and the returns are high
2. we can quickly determine if we're failing, so that we can
pivot quickly
3. we can learn effectively from the failure
this presentation is about how managers can build
organizations that can do that
PART ONEWHAT IS FAILURE?
let's first differentiate between failures and f@*k
ups
failures are legitimate mistakes
It's a legitimate mistake when you…
fumble because you lacked all the data, but had to move
forward anyway
made a reasonable bet, but got unlucky with
circumstances
invested in a low cost - high potential reward experiment
f@*k ups are stupid mistakes
It's a f@*k up when you…
failed to execute due diligence before or during
failed to learn from a legitimate mistake and
repeated it
invested in a high cost – low potential reward experiment
PART TWOWHY FAIL?
let's talk about 8 reasons why legitimate mistakes can be
valuable
REASON 1Fail regularly to ensure that
you keep striving
Failure occurs when you stretch / grow yourself, because you are out of your comfort level. If you’re not failing, you’re likely not stretching.
Explicitly track (and record) your rate of personal failures. Ensure 1 meaty screw up per quarter, or force yourself to move into personally uncharted waters.
REASON 2Fail regularly so that you continue to be surprised
Surprise is a key to innovation because it reveals opportunities. It also stores valuable Return on Investment if you learn from it.
Seek out Failure and aggressively run retrospectives (post mortems). Celebrate what you learn positively, widely, and publicly.
REASON 3Fail regularly to keep an open
mind
We are biologically predisposed to calcify assumptions & shy from cognitive dissonance. Shake things up before they can’t be dislodged.
Compose a list of 10 things that you believed 15 years ago, which you now know are false, or at least, not quite right. Remember how sure you were.
REASON 4Fail regularly so that you remind the ego to stay
humble
The greatest danger of confidence is over confidence
Find and listen to the album “Nothing’s Shocking” by Jane’s Addiction. It has nothing to do with this topic. It’s just a fraking good album.
REASON 5Fail regularly so that you build
empathy for others who fail
Most people fear failure because of how they think others will see them. It is peer pressure which makes us avoid what is innately good for us.
Look around for someone who is currently failing and give them a shoulder to lean on. No questions asked. No judgements made.
REASON 6Fail regularly so that you build confidence in your resilience
One of the reasons that it was so hard to shave my head bald for the Children’s Cancer Foundation Hair for Hope program was the worry that
it wouldn’t come back. It did.
Compose a list of 3 big mistakes you’ve made in your life thus far. Appreciate that you got through them and that they are not nearly so dire years later.
REASON 7Fail regularly to build practical recovery skills so that you get up faster & stronger next time
‘nuff said
Go back to the retrospective you ran for Reason #2 and analyse the process after the failure rather than before. Identify 1 thing to improve with recovery next round.
REASON 8Fail regularly so that failure
becomes less scary & embarrassing
Once you train your brain to see failure as an opportunity, it will become one
Find someone who has failed (and who may feel privately ashamed) and let them know personally that it’s no big deal.
PART THREEHOW DO YOU BUILD
A FAST-FAILURE FRIENDLY FIRM
if you are a manager or a leader
and you are now convinced that a bit more failure would be a good thing for
your group
what do you do?
here are 5 simple, practical things that you can do at any level of an organization
PRACTICE 1Iterate Faster & Smaller
PRACTICE 1Iterate Faster & Smaller
put in place a process to identify low-hanging opportunities where failure is low cost & high return
PRACTICE 1Iterate Faster & Smaller
do a bit of shot gunning with the results of the low-hanging fruit review. Commission many small bets and let the dice roll
PRACTICE 1Iterate Faster & Smaller
rewire your infrastructure/administration to support quick-iteration (e.g.: annual budgets….really?!?!)
PRACTICE 1Iterate Faster & Smaller
add "no-go" tollgates to avoid the basic human hard-wired tendency to throw good money after bad
PRACTICE 1Iterate Faster & Smaller
require business cases to identify minimum viable product features and customer validation metrics from the start
PRACTICE 1Iterate Faster & Smaller
define exit plans so that features (and applications) are designed for easy decommission if they don't work
PRACTICE 2Celebrate Failure
PRACTICE 2Celebrate Failure
make sure that senior leaders celebrate great post-mortem learnings at townhalls or team meetings
PRACTICE 2Celebrate Failure
heck, have those leaders give out an award to the bravest or most resilient failing team of the quarter
PRACTICE 2Celebrate Failure
or at least, have them talk openly and broadly about the importance of smart failure
PRACTICE 2Celebrate Failure
at every level, use neuro linguistics such as, 'and versus but'
PRACTICE 2Celebrate Failure
look outside the firm and do positive post-mortems on the mistakes of competitors or other industry players
PRACTICE 3Share & Learn from Failure
PRACTICE 3Share & Learn from Failure
use a tool that helps you effectively share knowledge broadly – check out Jive, or other Enterprise Social Networks
PRACTICE 3Share & Learn from Failure
make sure all project leads learn how to effectively facilitate retrospectives / post-mortems and make sure they do
PRACTICE 3Share & Learn from Failure
publish retrospectives broadly
PRACTICE 3Share & Learn from Failure
every year, circle back and review your library of post-mortems for emergent themes
PRACTICE 4Habitually Challenge the
Status Quo
PRACTICE 4Habitually Challenge the
Status Quo
have a annual mechanism to challenge all wisdom that has stood for a long time, especially during times of market disruption
PRACTICE 5Hire & Train Sherlocks &
wackos
PRACTICE 5Hire & Train Sherlocks &
wackos
make sure to hire some folks who are good at forensics
PRACTICE 5Hire & Train Sherlocks &
wackos
and a few oddball outliers to introduce randomness and surprise
SMART FAILURE IS PROFITABLECharacteristics of Smart Failures:• Costs of failure are low and returns are high• We can quickly determine we are failing so we can pivot• We learn
LEGITIMATE FAILURES• You lacked all the data but had to go• You got unlucky with circumstance• Low cost of failure & high returns
F@*K UPS• Lacked due diligence before or during• Failed to learn• High cost of failure & low returns
WHY FAIL?• Ensure that you keep striving• Continue to be surprised• Keep an open mind• Stay humble• Build empathy for others who fail• Build confidence in your resilience• Build practical recovery skills• Make failure less scary &
embarrassing
MANAGERIAL BEST PRACTICES• Iterate Faster & Smaller• Celebrate Failure• Share & Learn from Failure• Habitually Challenge the Status Quo• Hire & Train Sherlocks and Wackos
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