By Cindy Krischer Goodman
When Susie Taylor walked onto the set of ABC’s Shark Tank, she showed the investors her stain-resistant baby bibs and asked them for $40,000 to grow her Miami business. But something happened Taylor didn’t expect. The “sharks” reduced her to tears by calling her business a hobby, her margins terrible, her management skills lacking, and then delivering their famous line to indicate they weren’t investing: “I’m out!”
Taylor walked off the set in tears, having failed to secure an investment before seven million viewers on national television. Then she faced the challenge of bouncing back.
If your business or strategy failed, if you made an expensive mistake, or if you experienced a business or personal setback in 2014, this is the time for recovery. Today, failure is a hot topic, and the topic of bouncing back is even hotter. In Silicon Valley, for instance, failure has emerged as a badge of honor among start-ups who share their lessons publicly. FailCon, a one-day conference in San Francisco celebrating failure has been so successful that it has spread to other countries.
While no one wants to fail, wildly successful entrepreneurs such as Spanx founder Sara Blakely say that true failure is not taking risks or trying. Blakely publicly credits her embrace of failure for what helped make her the youngest self-made female billionaire in America.
“Most successful people have ‘failed’ multiple times,” says David Harkleroad of Chief Outsiders in Miami, a consultant to CEOs of small and mid-size companies. “What makes them successful is they seek to understand the opportunities that arise from the failure.”
To understand the opportunities, the first step is acknowledging your situation. Since her Shark Tank fiasco, Taylor has tried to scrutinize what went wrong and how it affected Bibbitec, her bib business.
Initially, she invested more money in Bibbitec to fill the orders that flooded in when the episode aired. But she had to figure out her next move: “It took a lot of self awareness.” Taylor says she considered the harsh advice doled out by the sharks and realized she needed a businessperson to run the company and an outlet for sales — not simply rely upon word-of-mouth praise among moms. Her husband now runs the company and has put in systems to operate it more efficiently. Bibbitec relinquished sales on its website and now sells its bibs almost entirely on Amazon, which markets the products for them. The company expanded its line to seven styles of bibs manufactured in Hialeah, and in 2014 the company sold 3,000 bibs for average price of $22. “We put down ‘failure,’ but it’s the only thing that makes you grow,” Taylor says.
Consultants say turning around failure requires searching for the root cause of what went wrong. “It’s usually not what people think it is,” Harkleroad says. Usually, listening carefully to customers, team members and trusted advisors reveals a clue for how to course correct: “It requires listening to understand, not listening to respond.”
When Jody Johnson expanded her company, ActionCoach Team Sage, by adding more business coaches, sales didn’t follow. She realized she needed to change course and listened carefully to feedback. “I had tried to grow too fast,” Johnson says. “I brought on coaches before I had a marketing machine in place to be able to feed them.” She then scaled back on staff and invested in marketing and tracking results for clients: “Now what I have is exactly the right plan to go forward. I will grow organically and I can bring on another coach when I’m ready.”
Another key to bouncing back is to cut losses early. Whether you’re the guy who introduced McPizza to the McDonald’s menu or the one who expanded Pollo Tropical into an underperforming market, knowing when to give up when the signs are obvious can be critical to long-term success.