Failure is a part of life, and business is no different. However, unlike how the rest of the non-work world views failure, founders are still hesitant to admit it publicly.
When something goes wrong or doesn’t go as planned, many founders feel the need to come up with an excuse or explanation that leaves no room for failure. This piece focuses on why and how founders fail to admit failure in their businesses. I also outline why this is detrimental and what can be done about it. After all, everyone fails from time to time. Why not embrace it instead of running from it? Let’s explore why so many start-ups are afraid of admitting they failed and how you can succeed where they didn’t by being more open about your failures.
Why are founders so afraid of admitting failure?
Failure is a scary thing for everyone, and founders are no different. However, many start-ups like to present themselves as successful from the get-go and early failure is not part of that image. Many founders pride themselves on their ability to overcome seemingly impossible odds and achieve the seemingly impossible. This desire to appear successful from day one can lead founders to disguise failures as growing pains, or something similar. Founders want to preserve their image, their reputation, and their company, so they disguise failures as something less than they truly are. This desire to appear successful can also lead to the other extreme where founders don’t take time to reflect and learn from their mistakes. In this situation, founders are so eager to move forward that they do not recognize or admit their failures, and as a result, are bound to repeat them.
Don’t fear failure, fear the stigma of admitting it.
The negative stigma around failure is what founders should be worried about, not failure itself. The start-up world is a high-risk, high-reward environment, and accepting that there is a chance of failure is a must. If you’re trying to avoid failure at all costs, it is likely you are not taking the necessary risks that are required to be successful. These risks often include failing, but these types of failures are the best kind. They are the ones that result in valuable lessons, the ones that make you stronger, and the ones that teach you what not to do. Apart from the negative stigma of admitting failure, there are also other things to worry about. If you fail, investors might not be so quick to invest in your next venture. This can be a big problem for start-ups that rely on investment to grow.
The short-term pain of admitting failure is greater than the long-term benefit.
By admitting failure and taking the time to reflect on what went wrong and why, you can avoid making the same mistakes in the future. This is something that can be applied to many aspects of life but is especially true in business. By reflecting on your mistakes and the reasons behind them, you can make your next venture more successful. By admitting failure, you also open yourself up to valuable feedback from both internal and external stakeholders. You gain the trust of your employees as they realize that there is nothing to hide, and they can see that you genuinely want to grow as a company. You also gain the trust of your customers as they realize that there is nothing to hide, and they can see that you want to provide them with the best product possible.
By not admitting you failed you risk alienating current and future team members.
Successful ventures often rely on a team of people to get the job done. While you might have the best idea, it takes a team to execute it seamlessly. By not being open and honest about your failures, you risk alienating current and future team members. By failing to recognize and learn from your mistakes, you are essentially telling your employees that their time and effort is not valuable. You are telling them that you do not care about what went wrong or why. By failing to recognize and learn from your mistakes, you are essentially telling your employees that they cannot trust you to lead the company in a successful direction. By failing to recognize and learn from your mistakes, you risk losing the trust of your employees, and as a result, losing their invaluable time and effort.
By not admitting you failed, you risk alienating your customers.
Customers trust businesses that are open and honest about their failures. They appreciate being informed about what went wrong and what steps are being taken to prevent a similar failure in the future. By failing to recognize and learn from your failures, you risk alienating your customers.
By not admitting you failed, you risk alienating your investors.
By failing to recognize and learn from your failures, you run the risk of alienating your investors as well. If you don’t keep your investors informed in a truthful manner you not only do them a dis-service, but you also lose the expertise contained in your investor community that could help you avoid the failure itself.
Conclusion
There is no shame in failing. It is an inevitable part of life, so why not embrace it in business as well? Once you can get over the negative stigma surrounding failure, you can begin to reap the benefits of being open and honest about your failures. You build trust with your internal and external stakeholders. This trust can help you in so many ways, from hiring better employees and receiving higher salaries, to receiving more funding and retaining customers. By being open and honest about your failures, you could learn from your mistakes and make your next venture more successful. You can grow as a company, and in turn, grow your customer base. By being open and honest about your failures, you can truly position yourself as a leader in your industry.