Innovation Inside the Box
Banks, Basketball, and Banana Splits: Failure is Everywhere?
When asked to describe his test for determining what is and isn’t hard-core pornography, Supreme Court Justice Potter Stewart responded, “I know it when I see it.”
In that sense, pornography and failure may have a lot in common.
By accident, I spent the month of April thinking, writing (here and here), and talking about failure. Then, in the last week, a bank failed, two top-seeded sports teams were eliminated in the first round of the playoffs, and the New York Times wrote a feature article on the new practice of celebrating college rejections.
Failure was everywhere.
But was it?
SVB, Signature, First Republic – Failure.
On Monday, First Republic Bank became the third bank this year to fail. Like Silicon Valley Bank and Signature Bank, it met the definition of bank failure according to the FDIC – “the closing of a bank by a federal or state banking regulatory agency…[because] it is unable to meet its obligations to depositors and others.”
It doesn’t matter if the bank is a central part of the entrepreneurial ecosystem, is on the cutting edge of new financial instruments like cryptocurrency, or caters to high-net-worth individuals. When you give money to a bank, an institution created to keep your money safe, and it cannot give it back because it spent it, that is a failure.
Milwaukee Bucks – Failure?
Even if you’re not an NBA fan, you probably heard about the Milwaukee Bucks star Giannis Antetokounmpo’s interview after the team’s playoff elimination.
Here’s some quick context – the Milwaukee Bucks had the best regular season record and were widely favored to win the title. Instead, they lost in Game 5 to the 8th-ranked Miami Heat. After the game, a reporter asked Antetokounmpo if he viewed the season as a failure, to which Antetokounmpo responded:
“It’s not a failure; it’s steps to success. There’s always steps to it. Michael Jordan played 15 years, won six championships. The other nine years was a failure? That’s what you’re telling me? It’s a wrong question; there’s no failure in sports.”
If you haven’t seen the whole clip, it’s worth your time.
The media went nuts, fawning over Antetokounmpo’s thoughtful and philosophical response, the epitome of an athlete who gives his all and is graceful in defeat. One writer even went so far as to proclaim that “Antetokounmpo showed us another way to live.”
But not everyone shared that perspective. In the post-game show, four-time NBA champion Shaquille O’Neal was one of the first to disagree,
“I played 19 seasons and failed 15 seasons; when I didn’t win it, it was a failure, especially when I made it to the finals versus the (Houston) Rockets and lost, made it to the finals for the fourth time with the (Los Angeles) Lakers and lost, it was definitely a failure.
.
I can’t tell everybody how they think, but when I watch guys before me, the Birds, the Kareems, and you know that’s how they thought, so that’s how I was raised.
.
He’s not a failure as a player, but is it a failure as a season? I would say yes, but I also like his explanation. I can understand and respect his explanation, but for me, when we didn’t win it, it was always my fault, and it was definitely a failure.”
Did Antetokounmpo fail? Are the Bucks a failure? Was their season a failure?
It depends.
College Rejections – Not Failure
Failure is rarely fun, but it can be absolutely devastating if all you’ve ever known is success. Just ask anyone who has ever applied to college. Whether it was slowly opening the mailbox to see if it contained a big envelope or a small one or hesitatingly opening an email to get the verdict, the college application process is often the first time people get a taste of failure.
Now, they also get a taste of ice cream.
Around the world, schools are using the college application and rejection process as a learning experience:
- LA: Seniors gather to feed their rejection letters into a shredder and receive an ice cream sundae. The student with the most rejections receives a Barnes & Noble gift card. “You have to learn that you will survive and there is a rainbow at the other end,” said one of the college counselors.
- NYC: After adding their rejection letters to the Rejection Wall, students pull a prize from the rejection grab bag and enjoy encouraging notes from classmates like, “You’re too sexy for Vassar” or “You’ve been rejected, you’re too smart. Love, NYU.”
- Sydney, Australia: a professor started a Rejection Wall of Fame after receiving two rejections in one day, sharing his disappointment with a colleague only to hear how reassured they were that they weren’t alone.
“I know it when I see it” – Failure
I still don’t know a single definition or objective test for failure.
But I do know that using “I’ll know it when I see it” to define failure is a failure.
It’s a failure because we can define success and failure before we start.
Sometimes failure is easy to define – if you are a bank and I give you money, and you don’t give it back to me with interest, that is a failure. Sometimes the definition is subjective and even personal, like defining failure as not making the playoffs vs. not winning a championship, or not applying to a school vs. not getting in.
Maybe failure is everywhere. Maybe it’s not.
I’ll know it when I define it.
Your Success Is Killing Innovation – Here’s 3 Ways to Change That
Yes, You CAN Fail Your Way To Success. Here’s How.
“Rapid Unscheduled Disassembly”
It’s a meme and my new favorite euphemism for getting dumped/fired (as in, “There was a rapid unscheduled disassembly of our relationship.” Thank you, social media, for this gem)
It’s also spurred dozens of conversations with corporate leaders and innovation teams about the importance of defining success, the purpose of experiments, and the necessity of risk.
Define Success so You Can Identify Failure
The dictionary defines “fail (verb)” as “be unsuccessful in achieving one’s goal.”
But, as I wrote last week, using your definition of success to classify something as a failure assumes you defined success correctly.
Space X didn’t define success as carrying “two astronauts from lunar orbit to the surface of the moon,” Starship’s ultimate goal.
It defined success in 3 ways:
- Big picture (but a bit general) – Validating “whether the design of the rocket system is sound.”
- Ideal outcome – “Reach an altitude of 150 miles before splashing down in the Pacific Ocean near Hawaii 90 minutes [after take-off].”
- Base Case – Fly far enough from the launchpad and long enough to generate “data for engineers to understand how the vehicle performed.”
By defining multiple and internally consistent types of success, SpaceX inspired hope for the best and set realistic expectations. And, if the rocket exploded on the launchpad? That would be a failure.
Know What You Need to Learn so You Know What You Need to Do
This was not the first experiment SpaceX ran to determine “whether the design of the rocket system was sound.” But this probably was the only experiment they could run to get the data they needed at this point in the process.
You can learn a lot from lab tests, paper prototypes, and small-scale experiments. But you can’t learn everything. Sometimes, you need to test your idea in the wild.
And this scares the heck out of executives.
As the NYT pointed out, “Big NASA programs like the Space Launch System…are generally not afforded the same luxury of explode-as-you-learn. There tends to be much more testing and analysis on the ground — which slows development and increases costs — to avoid embarrassing public failures.”
Avoiding public failure is good. Not learning because you’re afraid of public failure is not.
So be clear about what you need to learn, all the ways you could learn it, and the trade-offs of private, small-scale experiments vs. large-scale public ones. Then make your choice and move forward.
Have Courage. Take a Risk
“Every great achievement throughout history has demanded some level of calculated risk, because with great risk comes great reward,” Bill Nelson, NASA Administrator.
“Great risk” is scary. Companies do not want to take great risks (see embarrassing public failure).
“Calculated risk” is smart. It’s necessary. It’s also a bit scary.
You take a risk to gain something – knowledge, money, recognition. But you also create the opportunity to lose something. And since the psychological pain of losing is twice as powerful as the pleasure of gaining, we tend to avoid risk.
But to make progress, you must take a risk. To take a risk, you need courage.
And courage is a skill you can learn and build. For many of us, it starts with remembering that courage is not the absence of fear. It is the choice to take action despite fear.
When faced with a risk, face it. Acknowledge it and how you feel. Assess it by determining the best, worst, and most likely scenarios. Ask for input and see it from other people’s perspectives. Then make your choice and move forward.
How to know when you’ve successfully failed
Two quotes perfectly sum up what failure en route to success is:
“It may look that way to some people, but it’s not a failure. It’s a learning experience.”- Daniel Dumbacher, executive director of the American Institute of Aeronautics and Astronautics and a former high-level NASA official.
“Would it have been awesome if it didn’t explode? Yeah. But it was still awesome.” – Launch viewer Lauren Posey, 34.