How Successful Brands Win By Failing

Nigel VazJanuary 26, 20215 min

Disruption is often associated with innovation, risk-taking, speed, agility, and a willingness to challenge the norms and disrupt the business itself in order to enter new markets and categories. These are all traits of smaller, younger digital businesses, for sure, and can be the first type we think of when we consider disruptive organizations. Of course, some of those startups then scale up and become an Amazon, Apple, or Netflix: huge, successful companies that maintain a disruptive culture in everything they do.

Jeff Bezos’s annual letters to Amazon shareholders often make worthwhile reading. In 2016, the Amazon founder and CEO outlined his now legendary “Day 1” philosophy. At the core of “Day 1” is the principle of always focusing on outcomes rather than outputs: on results, not processes. The idea of his company ever reaching “Day 2” is unthinkable. For Bezos, the generally larger and established “Day 2” organizations represent stasis where decisions are made,  but made slowly and with an emphasis on whether the process was followed correctly rather than whether the intended outcome was achieved.

The outside world can push you into Day 2 if you won’t or can’t embrace powerful trends quickly, wrote Bezos. If you fight them, you’re probably fighting the future. Embrace them and you have a tailwind.

It’s a neat summation of what building a disruptive culture looks like: first, the acceptance that change is exponential and accelerating; second, that in order not to “fight the future,” you have to build an organization that is restless, inquisitive, outward-facing, and in constant beta mode. Constant beta is that self-imposed regimen that values progression more highly than perfection. Progression builds belief; perfection (or at least an artificial sense of perfection) builds complacency.

When building a company from Day 1, it’s easier for a founder-CEO to steer the culture in the direction they want to go. When you’re attempting to navigate a 100-year-old retailer through a storm of change, becoming a more disruptive organization entails identifying the products you want to improve and changing organizational structures and behaviors as you go.

For established organizations, disrupting yourself combines changing your orientation to the products and services you produce, alongside creating new systems and ways of working that can create that good disruption to help your organization move more nimbly.

Winning By Failing

In a now famous letter to shareholders in 2018, Amazon’s Jeff Bezos wrote:

As a company grows, everything needs to scale, including the size of your failed experiments. If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle. Amazon will be experimenting at the right scale for a company of our size if we occasionally have multibillion-dollar failures. Of course, we won’t undertake such experiments cavalierly. We will work hard to make them good bets, but not all good bets will ultimately pay out. This kind of large-scale risk taking is part of the service we as a large company can provide to our customers and to society. The good news for shareowners is that a single big winning bet can more than cover the cost of many losers.

He went on to point to the Fire phone as a failure, but which accelerated the rollout of Echo and Alexa in 2014. Since then, Alexa has grown in technological ability and reach, with the number of Alexa-powered devices “in the hundreds of millions,” according to the company.

Amazon, like all good businesses, does everything it can not to fail. Everything, that is, apart from not trying, trying slowly, or thinking small. The chance of failure is just one it is willing to accept as it follows a product-management process that allows for a disruptive culture, for continuous improvement, for a test-and-learn approach. For would-be disruptive organizations, putting this process in place is what matters. Failure is just an option, an occasional, necessary evil.

Moving At The Speed Of Disruptive Change

It is also the case that speed doesn’t necessarily have to come at the expense of quality. Instead, successful digital businesses expect and plan to learn and to continuously improve on what they build.

Business leaders have realized that their company’s success lies with how quickly and effectively they are able to navigate rapidly changing customer expectations and competitive disruption – something which startups do instinctively, but that established businesses must retro-fit.

And that retrofit can be seen today across those companies that are adopting iterative approaches to improving customer experience. One of the world’s largest quick-serve restaurants is doing this every day by taking the data it gathers from your mobile and drive-through activities to determine how to optimize those experiences more effectively. The shift here is, as we’ve seen, from a historic focus on time, scope, and cost to focus instead on speed, i.e., how fast you can put an idea into the world. The shift is to how you do that with quality so that the risk of breaking things, while present, is minimized. The shift is to how you make sure you’re not just meeting the scope of a project but delivering product of value to the customers and to the business.

When you make the shift to speed, quality, and value you gain the ability to move at the speed of disruptive change in the face of uncertainty. Essentially, you gain the ability to move at the speed of a startup.

It’s quite easy to read through these characteristics, nod your head, and move on. But here’s the thing: for 99% of established companies, living these characteristics requires massive cultural and behavioral shifts. And guess what? Changing the way people behave is much more difficult than acquiring a new capability. Just like you, they’ve built careers off a set of behaviors that have made themselves and your company successful. They’ve built relationships and loyalties within the silos they’ve operated in. And, many will have built expertise that will need to evolve. That’s a lot of change.

Leading through this change with clarity and empathy while role modeling the behaviors you want to create will require clarity of vision, commitment, and consistency.

Contributed to Branding Strategy Insider by: Nigel Vaz, excerpted from his book Digital Business Transformation with permission from Wiley. Copyright © 2021 by Nigel Vaz.

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