Like it or not, you will have failures as you build your business. You may already have felt the pangs of failure. I’m not just talking about the daily kind of failure, like not getting the account you wanted or not covering your expenses this month. I’m really talking about things like being the victim of theft or embezzlement, losing a key employee, experiencing a partnership breakup.
I’m helping clients deal with these failures right now but there are many events that can force you to rethink your business. A major systems break-down, the loss of a major account, dismal results on a new offering – almost anything can seem like failure. Although each situation is different, the initial sense of shock, anger and helplessness is similar. This is a normal reaction for many people in such circumstances.
When you are first made aware of your loss, it will take a certain amount of time to overcome the shock. You may need to jump right in and take short term corrective action, but be sure to follow up with whatever investigation is needed. In addition to looking for the cause of the failure, look for the positive side of what happened. See what lessons can be learned and get back to business as soon as possible.
Here are the steps I recommend be taken to effectively get through a failure and be able to bounce back smarter and stronger than ever.
Allow yourself to feel the upset
Give yourself a specified period of time to be in a state of upset. The severity of the situation will dictate how long you can afford to spend being upset. The longer it takes, the greater the long term loss will be.
In the case of theft or embezzlement, it’s not only lost money, there’s a sense of being violated. When a key employee leaves, you may feel betrayed or remorseful for lack of action in the past. A partnership break-up is like a marriage break-up. There may be a sense of relief, but there can also be a sense of loss and failure.
It’s better to totally focus on the issues and your feelings as early as possible. Until you do that it will be hard to move on.
Assess the damage
See what has been lost. Consider the impact on operations, finances, business image and morale. Small business owners frequently don’t have insurance to cover financial losses or interruption of operations. To the extent possible, put a dollar value on the loss. When the business image has been affected, it’s best to acknowledge the situation in a brief, succinct manner. Assure customers, suppliers and others involved, that measures are being taken to address the issues. Ask for their help if appropriate. Do the same with staff, who will likely be even closer to the situation.
Take whatever action is necessary to cover your loss on the short term, but know it’s a temporary measure until you can consider the longer term ramifications.
Learn from your experience
You know the lemons to lemonade story. If you really think about it, there may be a blessing in disguise in what happened. You may have been tolerating something that you knew wasn’t right. Sometimes it takes a crisis to bring about change. See what you can learn and plan the future to avoid a similar situation.
Reassess goals and strategy
A major event can slightly or drastically change your plans. This is a critical time to see if your direction has been altered by events. If so, your goals and strategy may need to be adjusted also. This is also a good time to check with your gut to make sure you’re realigned with the heart of your business — the part that motivates you.
Update your Plan
Review and reconsider your Plans. If your goals and strategy have been affected, it is likely your Plan will need to be modified as well. This might be the time to establish a new alliance, reorganize your systems, update your policies and procedures and hire the right people. Rewrite your Plan, communicate the changes to staff, and integrate it into operations. It’s important to feel that you’re back on a clear path so your efforts will be effective.
It’s a given that you will experience failure. The idea is to learn how to deal with it when it happens. There will always be a period of shock, outrage and fear as a first response. Remember, it’s not what happens so much as how you react to what happens.
Plan to fail, again and again, and to learn from each one. Knowing that failures will occur will help you be able to recover with minimal long term impact.
CAVEAT: The failure of a business doesn’t usually happen in one single event; it happens over time — one small unresolved failure at a time. When these aren’t adequately dealt with, the downward spiral begins. Plan to fail and you’ll be able to bounce back when it does happen.