Failure Is Good
Ask a capitalist why they are a capitalist and one of the first things they’ll tell you is that when you take the risk, you deserve the reward. It’s true. The unspoken corollary to that statement, oft-forgotten, is that risk is an inherent part of entrepreneurship and industry. As a business owner myself, I know from first hand experience just how big of a motivator success can be.
The promise of reward drives us to put in those extra hours. It makes us pay attention to every little detail. It makes us strive for a higher-quality product, a faster product, a more consumer-friendly product, a more convenient product, a cheaper product, a better product. Those rewards make us better leaders. It makes our companies better. It makes our society better.
Conversely, the fear of failure tempers our impulses. When every dollar matters, you stop seeing money as simply a budget and start seeing it as yours. When you pour your blood, sweat, and tears into a business, the loss can be just as devastating as the reward is empowering. That fear, the fear of failure, has an equally powerful – if not more powerful effect on business practices.
The simple fact is that the vast majority of people are so afraid of failure that they don’t even bother to try. Most people can’t bring themselves to take that first step. That fear is potent and fierce. That fear is neither unfounded nor bad. It motivates us.
When you own a small business, you don’t take the corporate jet to a fancy resort half way around the world for a team building exercise. You fly coach, or more likely drive that busted up car with the cracked windshield, half way across the country to make a sales meeting. You don’t hire a secretary when you can answer the phone yourself. You fire employees that don’t perform. You don’t give yourself a hefty Christmas bonus when you have to buy a new piece of equipment. You don’t take a week off when your company is in crisis. When you own the company, you can’t cash out and walk away.
That fear is important. More than anything else, fear makes a businessman truly own a company. Without this ownership, this fear, you’re simply running a company. There is an idle carelessness that creeps in when you don’t have such a deep and personal drive to succeed.
The basic equation of capitalism is with risk comes reward. Without risk, capitalism doesn’t work. We need risk. We need failure. We need to expect failure. We need to accept failure. We need to let failure happen. No, it’s not nice. No, it’s not pretty. No, it’s not easy.
But it’s necessary.
Excellent post, it dovetails into a debate I’ve been having elsewhere in fact. Unfortunately, we get a lot of liberal whack-a-loons who seem to think that everyone deserves a reward whether they take risks or not, they deserve to get the same slice of the pie just for waking up in the morning. I guess that’s enough of a risk these days for some people.
Capitalism and the free market works when we allow it to work. Yes, it can be broken and when we let it run without any regulation whatsoever, as we’ve seen in the financial market recently, it can fall apart entirely, but a rational, well-run, reasonably free market can and does provide sufficient reward to those willing to take risks and it leads to a healthy, growing economy.
We could sure use something like that right now.