The Value of Failure in Business
“Winners are not afraid of losing. But losers are,” said Robert T. Kiyosaki, founder of the Rich Dad Company and Cashflow Technologies Inc. “Failure is part of the process of success. People who avoid failure also avoid success.” His words counter the conventional wisdom that failure is not an option, suggesting in fact that failure is simply an event that can occur on the journey toward success. Delve into this viewpoint by investigating the psychology of failure and what business professionals can learn from failure.
The Psychology of Failure
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Many people will experience failure at some point in their lives, but your mindset can influence how you recover from it. According to Wealth Insights from Barclays, 29 percent of people who identify as entrepreneurs say they’ve recovered from failure quickly, and 34 percent say the failure encouraged them to try again. In contrast, only 17 percent of non-entrepreneurs felt they rebounded from failure and 19 percent found encouragement through failure to try again.
Why are entrepreneurs much more resilient to failure? That sense of resiliency may come from an understanding of the psychology of failure.
Barclays suggests entrepreneurs perceive failure as an inevitable part of their career path. For example, while a Master of Business Administration, MBA, degree can give them expert knowledge about business, they should still expect that 40 percent of venture capital firm investments will fail, 40 percent will generate modest returns, and only 20 percent will result in high returns, according to Barclays.
Entrepreneurs must be willing to accept risk and be optimistic that they could triumph to gamble on success. They should also exercise the persistence to keep trying. Barclays comments that psychologists show this quality reduces chances for serious failure and improves life satisfaction.
Failure Gives You the Opportunity to Learn and Grow
Starting with our childhood, we’re taught to learn from our mistakes. According to Forbes contributor Glenn Llopis, this practice is also important in the business world. He suggests failure gives people an opportunity to reflect upon the failure. What actions could have been taken to prevent the failure or reduce its impact?
If other people were directly or indirectly involved in your business failure, Llopis suggests including them in this process. He says that, together, you should develop a plan of action to apply to different situations for better results in the future.
Your Instincts Should Be Your Guide
Trusting your instincts in the business world can be difficult, especially if those instincts led you to failure before or if people you trust are trying to steer you in a different direction. However, Jeffrey Hayzlett, author of “Think Big, Act Bigger,” says learning to trust your instincts is one of the most important lessons failure can teach.
“Your instincts will never steer you wrong,” he writes in Entrepreneur magazine. “You must weigh all your options and then listen to what your gut is telling you.”
With a clearer understanding of failure, you can learn from the setbacks you face and emerge as a more confident and more successful business professional.
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