building a fast-failure-friendly firm

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

SHARE THIS DECK & FOLLOW ME(please-oh-please-oh-please-oh-please)

stay up to date with my future slideshare posts

http://www.slideshare.net/selenasol/presentationshttps://twitter.com/eric_tachibana

http://www.linkedin.com/pub/eric-tachibana/0/33/b53

CLICK HERE FOR MORE!!!!