The Hindu Business Line : <I>Living with failure </I>

Inside the corporate jungle, failure is a dirty four-letter word. Many would rather treat it as if it did not exist. Success, in the face of competitive odds, in reaching difficult target figure, and doing so on time, are the stuff of heroic lore in the business world. It certainly sells autobiographical books. Being a toughie is celebrated. And former CEOs such as Jack Welch of GE are folk-heroes even if they themselves change their mind on some important themes in their later, mellower years; or their successors to those famous executive suites reverse their policies and still manage to make profits.

Some product flip-flops

Surprisingly, Business Week of America devoted a whole article in a recent issue to discussing how failure was necessary. Of course, presenting and justifying two opposing schools of thought is a sure way of doubling the number of topics and articles, yet failure is a word so alien to the winner-takes-all American spirit that one sat up and took notice. The article spoke chiefly of a number of historic product flops, including the Edsel Ford car and new Coke. It also cited the example of Pfizer persevering with an apparent failure of a drug for angina, which produced some strange side-effects. The company persevered, however, and capitalised on the side-effects. And, thus, was born Viagra.

Innovation, a must

Marketing textbooks tell us that new product success ratios are less than four out of ten even among those launched, and a lot less if reckoned from the idea stage. The paradox, however, is ensuring breakthrough innovation, a universal mantra which implies accepting failures, simultaneously with efficiency and profitability which call for a high hit rate. So the risk in innovation is considerable. In this age of mega-mergers, the mortality of brands and even companies is rising, and technology poses barriers to the later entrants. Yet innovate one must — and the management gurus exhort CEOs to prepare the soil for creativity to sprout amongst staff and managers. Exemplary HR practice, widely applauded by the profession, also demands that organisations develop a culture that encourages experimentation, not just by adopting positive strokes and rewards, but also allocating personal time off for projects and `skunk works'.

Failure, an ingredient of success

Evidence proves that team working, yet another favourite of consultants, is the source more often than not of innovative products and services. Collaborative effort, in turn, clearly calls for a new way of running organisations, which stresses and applauds internal harmony and co-operation while actively discouraging the sort of rivalry and the infighting that we know only too well. It is typical of executives sitting inside their own silos of the mind. Managers have to consciously correct their stances and rid themselves of the mindset, "Well, I am an accountant, it is my job to ask the inconvenient questions and cut expenditure wherever I can". Or, "I am the sales guy who has to move the stuff, so I have to make sure I don't get landed with a lemon!".

In the end, the hot potato lands in the hands of the Chief Executive. How does he answer the analysts who will not take kindly to a plea that failure is almost an essential ingredient of success? The challenge is enough to tax the wiliest spin doctors.

(Feedback can be sent to srchander23@netscape.net)

S. Ramachander