When to tolerate failure
My son hired a consulting firm to do a SWOT (strengths, weaknesses, opportunities and threats) analysis for a product he wants to launch,” says the founder of a manufacturing family business. “The firm charged a lot and their suggestions do not work. I told my son to go with his instincts and not waste money on expensive reports. But my son is afraid to act even if I told him he won’t be punished for failure, as long as it does not bankrupt us. Do you agree?”
My reply
Your son hired the consulting firm because he does not trust his instincts, and he does not want to fail you. Some firms charge a lot—you are not the first to complain about the inapplicability of their recommendations to the real world.
Back to your son: Trusting instincts come with experimentation and learning from mistakes, which you have done. But your son does not have your experience, so I do not agree that he go with his gut—yet. He learned about feasibility studies in school; it is a good idea to conduct them.
However, instead of hiring a firm, he should do the SWOT study himself. Ask employees how they can leverage their strengths and improve their weaknesses. Ask customers what they need and how to improve products and services. This should not cost a lot.
Some failure is inevitable, but maximize the learning while minimizing the cost—by failing cheaply while still retaining the willingness to take calculated risks. Columbia business professor Rita McGrath cites the company 3M, whose former head Jim McNerney (from GE) used Six Sigma practices throughout the company, even in the research labs.
Six Sigma might have worked for GE, but in 3M, “the emphasis on generating predictable results hampered employees’ willingness to take risks on unproven ideas,” says McGrath in Harvard Business Review. “When George Buckley took the reins as CEO … he discontinued the use of Six Sigma in the labs and spurred scientists and researchers to pursue new ideas—provided that the downside was small. During the recession, 3M’s historical philosophy of ‘make a little, sell a little’ when introducing a new product was successfully coupled with Buckley’s emphasis on bottom-of-the-pyramid innovations—inexpensive items that could appeal to very broad markets.”
Mistakes should not bankrupt your business, so discuss with your son and other family members under which conditions you are willing to accept risk, plus the amount you are ready to stake. Make these specific, for instance, P5 million as investment and four years to break even. Put these decisions into writing to be agreed by all.
Hot button relationships
To reader A, who asked about deal breakers in relationships (July 6, 2023), reader Pacholo Garcia Morrera says, “I had a girlfriend who was a lot of fun and the relationship was exciting, but there were big fights that made me suffer. I knew all couples fight, so I thought, ‘Ganoon talaga’ and I had to suck it up. But my sister told me that when our parents fight, they fight about small things like habits, but not about big things like values. And I got my lightbulb moment. My girlfriend and I got along perfectly on the small things (travel, movies, restaurants), but we fought about the big ones (family responsibilities, obligations). That’s when I called it off.
“So reader A needs to identify what his big and small things are. Hygiene for me is a small thing because this can change, but clinginess (or lack of trust) is a big thing that cannot be changed. If he can accept the big things (some guys like clingy girls because they feel dominant), then great. If he can’t, then it’s time to call it quits.”
Queena N. Lee-Chua is with the board of directors of Ateneo’s Family Business Center. Get her book “All in the Family Business” at Lazada or Shopee, or the e-book at Amazon, Google Play, Apple iBooks. Contact the author at [email protected].
