Learn (and Act) Fast
You may have heard the term “Fail Fast.” The term describes a “business strategy that quickly, cheaply and safely validates approaches before committing to a big investment.” The concept has been referred to in a number of ways by various industries and authors, including:
Fail Fast, Fail Often
Fail Fast, Succeed Faster
Fail Fast and Fail Cheap
Fail Fast and Learn Faster
Recently, some business experts have advised we should stop using the term “fail” at all, suggesting that it focuses people on the negative term “fail”, instead of on the real goal of the concept which is learning. My first reaction to this push-back was, “Hey, business owners are a mature bunch and we can handle the use of the word fail!” But on further reflection, I think the She Leads interpretation of the concept is best described as “Learn & Act Fast”. We have found that many entrepreneurs are reluctant to abandon an idea or make a change to a position that they originated, even when the data shows they should. I suppose resistance to admitting your idea is a failure is a human trait – no one likes to “call her baby ugly.” However, when you are in business, the ability to objectively assess your ideas or projects, learn which ideas are winners and which are not, and quickly act on that learning can make the difference in whether your business survives. Regardless of what we call it, pretty much everyone agrees on the concept: assess your business activities quickly and if they are not winners, move on to the next idea.
Learning & Acting Fast is about:
– Avoiding missed opportunities – The sooner you end a project that is not going to produce success in a reasonable timeframe, you can move on to implementing a better idea. In the words of Elsa from the movie Frozen, just “Let it go.”
– Iterating – It’s not always necessary to completely scrap an idea or activity that is not performing. Sometimes the best alternative is to adjust the model and try again. Also, it is not always necessary to fully flesh out an idea before trying it. For example, we went live with our She Leads web site knowing it is not yet perfect and we are perfecting it with our members’ feedback.
– Minimizing the cost of learning – Looking for ways to test or protype with a minimum investment can provide you with the means to assess your ideas with the least financial risk.
– Acting based on data – Measure and gather data to objectively assess the results of your implementations. Then act on the data.
– Making timely decisions – By making fast, timely (and sometimes difficult) decisions, to scrap, iterate or continue a project, you can get on to the profit-rich activities more quickly and maximize profits.
– Being Resilient – Resilience is the ability to accept defeat, pick yourself up, dust yourself off, and start again. There is no shame in abandoning a project, idea or business. Almost all successful business persons had multiple businesses, learned from the ones that were not successful, and acted on their learnings to ultimately achieve success.
The Learn & Act Fast concept can be applied to almost every aspect of your business: business start-ups, innovation, ideas, projects, processes, information technology deployments, marketing, investment, research, and even inventory purchases.
Inventory Exercise: You spent $100,000 on a new product that you are selling for $49.99 each, and you sold 40% of your new product inventory in the first 30 days. Then sales slowed to a crawl. Three months later, you still have over half the items left in inventory. What should you do?
(a) Just stay the course. Eventually you will sell all the inventory and realize a profit.
(b) Invest in more advertising. You’re sure this product will sell at $49.99 – you just need to attract more customers to your site.
(c) Double down and purchase more units of this item. After all, you’ve already sold nearly half your inventory and you need to rebuild to the original inventory level.
(d) Blow out the inventory at a sales price of $9.99 each, accept less profit, and reinvest the revenue in newer items that may sell better.
If you chose answer (d), “Blow out the inventory and reinvest in newer items”, you chose the answer most aligned with a Learn & Act Fast philosophy.
KEY POINT: The key to successfully applying the Learn and Act Fast method is DATA. You can’t even know whether your idea is working unless you compile and analyze the data to assess it. For example, in our inventory exercise, the business owner would need to know how much inventory by item type was left on hand at a given point to make an informed decision about her next purchases. Do you have the data you need to make informed business decisions? If you need help, She Leads offers a variety of Data Diving and Profit Coaching services at a variety of price points. Just click on the “Dive into Your Data” button, provide us with some basic contact information, and we’ll contact you to discuss your needs.
If you’d like to learn more about how “Failing Fast” can help businesses succeed, here are some great resources:
Fail Fast, Fail Often: How Losing Can Help You Win by Ryan Babineaux, Ph.D. and John Krumboltz, Ph.D. (book available from Amazon)
Fail Fast, Fail Cheap
We Should Stop Telling Entrepreneurs to Fail Fast
Don’t Fail Fast – Learn Fast
Let’s chat about your experiences with the “Fail Fast” or, as we like to call it, the “Learn & Act Fast” method in our Facebook Community, She Leads – Women’s Leadership Development. We can’t wait to meet you there!