The Journal The Authority on Global Business in Japan

None of us in business set out to fail. But one of the differences between overall success and failure for entrepreneurs, negotiators, and business people is a willingness to declare some aspect of our work a failure and abandon it. The person who takes the adage “never give up” too much to heart will be lured into bad deals, chase losses on projects that no longer make sense, and spend time perfecting what was already good enough. This never-quit mentality can be seen at some of the more staid companies in Japan.

Increasingly, people are recognizing that acknowledging both limitations and failure can improve outcomes. Various incarnations of “fail to learn” are now taught in business books and at some business schools. The tech startup sector embraces disruption and creative destruction.
That said, failure is not the goal.

Failure can be broadly classed into two categories. The first type of failure is simply down to chance. We hedge our bets—whether through insurance, currency options, cross-training of key personnel, or other methods—to ameliorate the downside of failure and then take our losses, trusting that they’ll be offset and exceeded by the bets that paid off. Taking risks makes this type of failure almost certain, so it is something for which to plan. It is not cost effective to eliminate all risk.

The second type of failure is not by chance. It occurs because we could have done something better. Perhaps a key department was hampered by an outdated IT system. Maybe we let too much time elapse between our market research and the execution of a marketing plan. Or perhaps a candidate seemed such a perfect fit that references weren’t checked. Whatever the case, this type of failure should encourage us to figure out the reason for the failure and then change to avoid it in the future.

Even if you’re one of the lucky few with­out fear, you probably still work with people who are susceptible to its enervating effects. An unhealthy fear of failure can make us and others in our organization engage in soothing rituals that reduce effectiveness. Tasks should be given sufficient care to lower the risk of failure or mistake to acceptable levels, but a zero-tolerance policy—including with yourself—will quickly lead to burn­out or delays.

How do you determine the acceptable level of failure? A popular method is to name it. If 99-percent accuracy is good enough, say that. If a 95-percent on-time rate is standard for the industry, achieving a 97-percent rate will set you above your competition. Unrealistic expectations are one of the prime factors in serious problems such as high turnover and, in extreme cases, compliance fraud. Be sure your expectations are reasonable.

Once you’ve named your level, make certain others on your team—particularly those who work for you—know the level. Your conscientious employees won’t make any lower target their goal; they’ll just stop wasting time and energy trying to achieve an unnecessary level of perfection. And once you’re clear about your expectations, others will rise to the level or make it clear they have no interest in doing so.

There are many excellent texts and courses on this topic. Of particular note, the ACCJ–Chubu Business Programs Committee has invited Rochelle Kopp of Japan Intercultural Consulting to speak about this in a Japanese context on September 11 in Chubu. Please plan to join us.

Chad Musick is ACCJ–Chubu treasurer and vice-chair of the ACCJ–Chubu Business Program Committee
A zero-tolerance policy . . . will quickly lead to burnout or delays.