The world of business doesn’t promise a smooth road to success. Missteps, setbacks, and outright failures are an integral part of the journey.

While each one of these 'bumps' on the road can be tough to navigate, they can often turn out to be opportunities for growth and learning, as they reveal the raw reality of what works and what doesn’t.

Just as a sculptor chips away at a block of marble to reveal the masterpiece within, failures and setbacks in the business journey can carve out the path towards greater accomplishments.

This isn’t to say we should actively chase after failure. Rather, it’s about shifting our viewpoint, to perceive failure not as a catastrophic end, but as a critical component to success. These tough encounters often act as a catalyst for businesses to genuinely evolve, adapt, and transform.

Drawing on the wisdom that's found in these challenges, there are five positive results that often emerge: We learn and grow, develop resilience, cultivate a healthy tolerance for risk, encourage innovation, and forge character. These aren't merely abstract concepts, but tangible skills and attitudes that are honed and polished by the abrasive, yet effective teacher, that is failure.

As we explore these lessons learned from some high-profile business failures and successes, remember: these lessons aren't about glorifying failure, but rather about recognizing the potential for growth that comes with it.

1. Learn and Grow

Every business owner can attest to the lessons that are often hidden within the folds of failure. While these stumbling blocks may initially seem daunting, they are in fact spotlighting areas that need improvement. They reveal gaps in knowledge, planning, or strategic execution.

The key lies in understanding that each setback is an invitation to analyze what went amiss and to leverage those insights for the future. Failure, therefore, is not a dead-end, but a detour pointing toward a better path. The transformative journey of Microsoft serves as an excellent illustration of this concept.

In the early 2000s, Microsoft launched a product that turned out to be a spectacular failure - the Windows Vista. Users found Vista to be incompatible with some hardware, and it was heavily criticized for its high system requirements, restrictions for certain hardware, and more. Microsoft's reputation took a substantial hit from this failure.

However, Microsoft learned from this failure. They listened to user feedback and criticisms and used these valuable insights to design their next operating system, Windows 7. Windows 7 addressed many of Vista's flaws and was praised for its increased compatibility, new features, and improved performance. This product was a significant success and solidified Microsoft's place in the operating system market.

Microsoft was able to use their failure with Windows Vista as a learning opportunity. By addressing the issues and improving upon their previous work, they were able to bounce back stronger and continue their success in the tech industry.

 While learning from mistakes is key to growth, as we can see from Microsoft’s journey, harnessing lessons from failure isn’t the whole story. There’s also an element of resilience involved, as illustrated in our next example.

2. Develop Resilience.

In business, as in life, things don't always go as planned. Yet with each failure, a company learns to adapt, to be flexible, and to find ways to survive and thrive despite the circumstances. At first this can be very uncomfortable, but through each cycle of failure and recovery, resiliency grows.

Lego is a perfect example of this.

LEGO, the world-famous Danish toy company, hit a major financial crisis in the early 2000s. Following decades of success, the company expanded into various sectors like theme parks, clothing, video games, and television, resulting in a loss of focus from its core business - the iconic LEGO bricks.

By 2003, the company's sales were declining, and LEGO was on the brink of bankruptcy. Instead of giving up, the company decided to rebuild. They refocused on their core product - the LEGO bricks and simplified their manufacturing processes. They also started to listen more to their customers and invested in creating themes and sets that resonated with their fan base. Innovations such as the Harry Potter and Star Wars sets and a new focus on appealing to girls with their LEGO Friends line, were among the successful initiatives that LEGO introduced.

The company's return to profitability was far from instantaneous, but their perseverance and resilience paid off. By 2014, LEGO had become the world's largest toy company by revenue, surpassing Mattel. LEGO's story serves as a powerful reminder that when businesses face hardships, resilience and a focus on core strengths can pave the way for a comeback.

This extraordinary comeback story also underscores that as companies navigate hardships and build resilience, another crucial facet of entrepreneurship begins to take shape – the willingness to take on calculated risks.

3. Cultivate a Healthy Tolerance for Risk.

Just as a muscle grows stronger with consistent exercise, so too does resilience develop with repeated application. This strengthening of resilience, in turn, fuels an entrepreneur’s confidence and capacity to embrace calculated risks.  

It is important to note that comfort with risk doesn't mean recklessness. Instead it’s the ability to weigh potential upsides and downsides, make informed decisions, and move forward even when the outcome isn't guaranteed.

Richard Branson, the founder of Virgin Group, is the epitome of tolerance for risk. Branson is famous for his unorthodox business strategies and daring risk-taking. His ventures span various industries, from music records to airlines, to space travel. Not all of his ventures were successful though; in fact, he experienced numerous failures, including ventures like Virgin Cola, Virgin Cars, and Virgin Brides, which did not pan out as expected.

However, Branson's resilience in the face of these failures allowed him to learn from each setback and use these lessons to fuel his future endeavors. His comfort with taking calculated risks, borne out of his developed resilience, allowed the Virgin Group to grow into a global brand with over 200 companies. It’s the combination of resilience and a comfort with risk-taking that has been a significant factor in Branson's sustained success as an entrepreneur.

Resilience and risk tolerance are indeed vital for any business to bounce back from failure. Yet, it’s also the failure-induced spark of innovation that often propels people to new heights.

4. Encourage Innovation.

Failure, while generally viewed negatively, can be a catalyst for innovation. When traditional methods and strategies falter, it forces us to reassess our approach. This process nudges us out of our comfort zones and sparks creativity as we strive to find alternative solutions to our problems. In a sense, failure creates a platform for us to question the status quo, to challenge conventional wisdom, and to invent new methods that might otherwise have remained unexplored.

The remarkable journey of James Dyson encapsulates this idea perfectly.

The development of the pioneering Dyson vacuum cleaner was not a straightforward endeavor. Dyson went through a grueling process of creating and testing 5,126 prototypes over 15 years, each of which was an improvement on the previous model but still fell short of his expectations. These "failures" were stepping stones leading him towards the right solution.

By sticking to his belief in cyclonic separation technology and constantly iterating on his designs, he turned a series of failures into a remarkable innovation. This innovative product was not only vastly superior to others on the market, but it also completely revolutionized the vacuum cleaner industry.

Had Dyson succumbed to his early failures, we might never have seen the innovation that he brought to the market. His journey clearly illustrates that failure can inspire a level of creativity and innovation that leads to breakthroughs and industry-shaking changes.

While failure, in this case, was the necessary precursor to innovation and breakthrough, failure for others can have an equally impactful reaction – the shaping personal character.

5. Forge Character.

Failure can serve as a humbling experience, putting into perspective our limitations and exposing our vulnerabilities. It forces us to confront the reality of our fallibility, a realization that can be quite transformative. These lessons in humility help business leaders stay grounded, fostering an environment of continuous learning and growth.

Consider the story of Steve Jobs. In 1985, Jobs was ousted from Apple, a company he co-founded. This could have been a crushing blow, a failure too massive to recover from. But Jobs didn't let this setback define him. Instead, he described the period that followed as one of the most creative in his life.

He channeled his disappointment and leveraged his creativity to found two companies - NeXT and Pixar. Both ventures were marked by the innovative spirit that Jobs was known for. Pixar became a major player in the animation industry. Meanwhile, NeXT was eventually acquired by Apple, which brought Jobs back into the company he co-founded.

Back at Apple, Jobs led a period of unprecedented growth and innovation, introducing groundbreaking products like the iPod, iPhone, and iPad. These products not only revolutionized the tech industry, but also solidified Apple's position as a global leader in innovation.

Jobs' journey serves as a testament to the character-building power of failure. It shows how failure can act as a springboard for personal growth and future success.

Conclusion

In the realm of business, success and failure are two sides of the same coin. As entrepreneurs, we often find ourselves navigating through highs and lows, victories, and defeats, which are interconnected parts of the business journey.

Through the stories of Microsoft, Lego, Virgin Group, Dyson, and Steve Jobs we’ve seen that failure does not spell the end, but rather signals a new beginning. It's a catalyst that propels us to learn, develop resilience, cultivate risk tolerance, encourage innovation, and build character.

However, it is important to remember that while we celebrate the stories of these successful companies and entrepreneurs, they are but a few among many. Countless others embark on similar journeys, experiencing their own unique blend of successes and failures. Each journey, each story, is equally valuable as they contribute to the rich tapestry of the entrepreneurial ecosystem.

As you venture into the realm of business and entrepreneurship, I encourage you to adopt these valuable lessons. By acknowledging the importance of failure in our entrepreneurial endeavors, we can transition it from being a hurdle to a tool for growth. Remember, success isn't solely about reaching the summit—it's about navigating the journey and drawing wisdom from our experiences.

Best wishes on your journey, Lauren