10 Aug Extinguish Fear and Focus on the Opportunity
As the widely quoted axiom holds: “The biggest cause of failure is the fear of failure.” It’s an unbelievable cosmic truth that so many forget. Fear is the most insidious of all human emotions. Yet, organizations often try to use fear as a tool of manipulation – even more oddly, as a motivation tool! Believe me, innovation and creativity do not prosper in an environment that is driven by fear. But, since fear sounds so cryptic and so primal, organizations have decided to call it other things. Of course, the most common term, or euphemism, for “fear” is “risk.” “We have to be careful about X” – that’s fear. “We have to control Y” – fear. “We have to make sure that Z doesn’t happen.” Fear.
The systems that have been created around risk management are really all about fear management. And I can tell you that, in my 20-years of experience as a management consultant, I don’t think there is any dynamic that has killed more wonderful companies than this encroachment of risk-creep and fear.
It turns out that, ironically, fear is your enemy. It’s your enemy for a lot of reasons. First of all, it s-l-o-w-s y-o-u d-o-w-n. And at today’s rapidly increasing speed of business and speed of technology, that’s death. It is imperative to employ broad-based fast tracking methods in all aspects of your business. But if you’re required to do to many checklists and too many what-ifs and too many financial projections while your competitors are delivering insanely cool stuff to your customers, you lose. We’ve seen this in the car industry. We’ve seen it in other “old line” businesses. We’ve also seen it even in more modern tech companies, too. It’s important not just to manage the business, but also to manage fear.
When my youngest daughter was in kindergarten, she was asked to get up in front of her classmates and explain what her father did. Having heard me say what I do many times, she got up in front of her class and proudly proclaimed “He’s in the failure business!” Of course, she was right.
To invent means to fail, to innovate means to fail. And that’s why there have been so many methods, so many systems put together to try to control the unruly, cosmic beast that is risk. But the idea that you can eliminate risk completely is nuts. In fact, as the saying goes, where there is risk, there is likely to be reward – and where there is no risk, there is likely to be no reward. No risk can only happen on something that has been done and proven already, and while proven products are certainly good to have in a portfolio as a cash cow, they don’t last forever. They can’t last forever – as Kodak so painfully learned and as Microsoft worries about every day – the innovation pipeline must have something in it, and so risks must be taken.
You get reward by exposing yourself to risk. This is a cosmic law. I’ve never been able to break it, and if anybody does, please call me because I’ve been trying to figure out how to short circuit the process by pulling failure out of innovation. But the reality shows it can’t be done: fewer than 1 percent of all the patents applied for with the U.S. government make it to the marketplace.
When you look at the statistics, at the number of products that are successful compared to the hundreds and thousands of products that are launched, the numbers are unbelievably bad. But if we know we can look at innovation as a portfolio rather than an individual act, we can be comforted with the fact that at the end of the day, we can still be successful at innovation. But instead, companies have tried to do everything they can to pull risk out of an inherently risky proposition. The more they talk about risk, the more they think about fear and the more they try to manage fear, the less that happens.
In fact, most large corporations today have all but stopped inventing. Sadly, most of the resources go towards things like strategic acquisitions, often of startup technologies that have already earned market validation. Maybe that’s the right strategy – a strategy where we smaller entrepreneurs create while large companies acquire. In a sense, that outsources innovation, and that might be a good strategy for some companies.
But it seems to me that this is where a lot of companies lose their “soul,” their connections with their customers. They lose the ability to drive the relationships with their customers to new products, and to fasttracking their products to market. What if there is no suitable technology startup to acquire? What if the market is looking for something besides bright shiny things – what if it’s service or delivery that differentiates the product? Soon, a bad acquisition is made – or no acquisition at all – and the company starts down the path to a broad decline. Companies like Sun Microsystems, Microsoft, HP, and Exxon have all made bad acquisitions in an effort to acquire technologies that should have probably been grown internally.
But if you are a company and you do want to create, managing fear is absolutely fundamental. All innovation superstars look at risk reasonably. They deal with – or extinguish – fear, and focus on the opportunity to serve their customer.