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Welcome back everyone. In the sixth and final part of my blog series, I want to discuss something that affects all of our financial journeys: Superannuation. Perhaps you’re concerned about your retirement savings? Or maybe uncertain about how to make the most .....
Failure can be good for business.
Yes, you read that right. As painful as it can be to face business failures, you can actually gain even more from your failures than you can from your successes. A Harvard Business Review article by Francesca Gino and Gary P. Pisano explains that when we focus on our wins, we blind ourselves in several ways. First, we tend to make “fundamental attribution errors,” which happen when we attribute our success to our talents and business models and fail to acknowledge random factors that contributed to our wins. Second, we develop a “confidence bias”: too much faith in ourselves. Finally, we develop “failure-to-ask-why syndrome,” which keeps us from asking the tough questions that lead to discovery.
Let’s take a look at each of these issues and discover how holding our failures closer than our wins can help us to succeed in the long run.
The term “fundamental attribution error” is a social psychology term that describes the tendency to place too much emphasis on internal characteristics (like intentions) and too little emphasis on external factors (like market conditions).
When we focus on our wins, we’re more likely to make fundamental attribution errors. We blind ourselves to the external factors that affect our businesses. This blind spot is dangerous. It can not only cause you to miss out on opportunities, but it can also cause you to ignore your competitors or misread the market.
Running a business requires a certain amount of healthy confidence. You’ve got to be able to take risks, be decisive, and move forward based on past decisions. When you focus solely on your wins, however, you might mistakenly think that you’re a better decision maker than you actually are.
It’s part of human nature to sit back and bask in success. Success feels so good, and for some reason, humans don’t often spend time asking why they have succeeded. On the other hand, failure causes us to reflect and stew over the poor results. In fact, failure often results in serious soul searching. While soul searching is not often fun, it does often produce good results, the kinds of results that can send businesses to their best efforts to date.
If you can learn to focus on your failures, you’ll find yourself doing more soul searching regarding your business. As you ask “why,” try to analyse how you can improve your information systems, your business processes, your skills and capacities, and your reward systems. Break down psychological barriers within your business by publicising both failures and successes. Make it acceptable in your business to talk about the failures in order to find out why things went wrong and how they can be made right.
As you can see, keeping your wins close and your failures closer can lead to great improvements for your business. If you’d like to talk your failures over with an expert, get in touch with us at Altus Financial. We’d love to help.
For further insight into your current business challenges and opportunities, try our Healthy Business tool by clicking below:
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Altus Wealth Pty Limited ABN 55 649 956 212 is an Authorised Representative of Altus Financial Services Pty Ltd ABN 24 637 026 825 an Australian Financial Services Licensee (AFSL no. 520266). Altus Financial Services Pty Ltd is not responsible for the advice, products and services provided by Altus Accounting. Julie Azzi is a credit representative (CR No. 366834) of BLSSA Pty Ltd ABN 69 117 651 760 (Australian Credit Licence 391237).
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