In the past two weeks, we discussed seven common reasons that family businesses give to justify their decision to stay stuck and not venture into new areas.
We have seen that even if the economy is uncertain, the family lacks resources, or the plan is still not perfect, the family should not just stick to a deteriorating business or stop innovating.
Family conflict can be managed, and families can learn to adapt to change, even if the members claim they are too old, tired, or conservative. The alternative is to fail altogether.
Let us discuss the last two excuses, with rebuttals for each one.
Not yet prepared
We really want to try this new method, but we have not yet attended enough workshops. Maybe we have to take an MBA first, or at least get a certificate before we begin anything.
By all means, check out the requirements first before embarking on new businesses, but delay or fear can prevent you from taking the plunge. If you want to start a parlor or barbershop business, then it would probably be advantageous to take a short course in hairstyling (unless you already know how to do so, having learned from your parents, for example).
But in some instances, you may not need formal study, and in most cases, you certainly do not need an MBA to start an enterprise. Read about entrepreneurs in magazines or on the web, and learn from them. Or talk to particularly inspiring ones, and ask them for advice on how to take the first step.
As the Nike ad says, “Just do it.”
Past failure
The last project we did failed miserably, so we are not allowed to do something new. Our father will be very angry if we fail again. It is safer to stick to old ways, whether or not they are ideal.
Many founders have seemingly forgotten the many failures they encountered when they were starting out. Now that the business is stable, but stagnant, they are so scared about losing money that they censure the younger generation for making costly mistakes, and in the process, forbid them from innovating.
This is one reason why many of the young ones prefer to work in professional multinational companies rather than be under their parents’ thumb their whole life.
When young people feel that their hands are tied, and that they cannot make major decisions, then their morale plummets. They feel resentment and frustration at being tied down to a “boring” job that leaves no room for innovation.
One practical way around this is to have a family decision on managing resources. As a family, decide how much money you can afford to risk on a new venture. Perhaps it is a hundred thousand, perhaps it is a million. Discuss parameters: who will take responsibility (very likely the proponents); what are the safeguards (weekly ongoing reports to the board); what to do when issues arise (get out when financial investment dries up, or give more if the venture looks promising).
What you cannot do is to not even try anything at all.
In their book “Fail Fast and Fail Often,” US psychologists Ryan Babineaux and John Krumholtz says, “Failing quickly in order to learn fast—or what Silicon Valley entrepreneurs commonly call failing forward—is at the heart of many innovative businesses. The idea is to push ahead with a product as soon as possible to gather feedback and learn about opportunities and constraints so that you can take the next step.”
“Try to act in ways that leave more options on the table,” the authors say. “You want to have room to be surprised by life and be open to luck. By approaching things as a curious beginner, you not only put yourself in the optimum frame of mind to learn and grow, but you also open yourself to unexpected opportunities and experiences.”
The authors describe how Pixar Animation Studios work. A movie begins with rough story boards where only a few good ideas are buried under lots of poor ones, then the animation team creates and revises thousands of times before they get a final cut. Because they are allowed to fail again and fail, they can weed out the bad ideas quickly and move ahead quickly as well.
Andrew Stanton, the director of “Finding Nemo” and “WALL-E,” says, “My strategy has always been: Be wrong as fast as you can. Which basically means, we’re gonna screw up, let’s just admit that. Let’s not be afraid of that. But let’s do it as fast as we can so we can get to the answer. You can’t get to adulthood before you go through puberty. I won’t get it right the first time, but I will get it wrong really soon, really quickly.”
Pixar is the most successful animation company in the world today, because it fails fast, and learns faster. Next week: Fail fast
Queena N. Lee-Chua is on the Board of Directors of Ateneo de Manila University’s Family Business Development Center. Get her book “Successful Family Businesses” at the University Press (email msanagustin@ateneo.edu.) Email the author at blessbook.chua@gmail.com.