Embracing Failure: The Key To Business Growth

Shannon Waller: Hi, Shannon Waller here and welcome to Inside Strategic Coach with Dan Sullivan.
 
Dan, in a workshop yesterday, a really interesting conversation emerged out of talking about 10X jumps over the past year, and one of our very dear clients mentioned something about 10X learning, and it was from something that did not go as planned. And then what happened out of that was a whole conversation about failure. And I thought, “Ooh, I can’t wait to talk to Dan about this,” because, Dan, you’ve talked about “We’re either winning or learning,” but I think people can take their failures very personally, feel the setback, be stressed about it, feel like they’re not good enough. People can go into a little hole or whirlpool about it emotionally, but I know that you have a very, very different take on it.
 
So let’s talk about “entrepreneurial failure,” and I’m putting that in quotes because I think experimenting and testing is just how we do things.
 
So the question is, what is your take on failures in entrepreneurial life?
 
Dan Sullivan: Yeah, it’s really interesting. There was a survey done by someone, you’ll probably remember his name, but he was sort of a researcher and he lived in New York City and he was a freelance, but he got big projects with big magazines along the lines of Forbes. I forget what his name was.
Shannon Waller: Lewis Schiff, Business Brilliant?
 
Dan Sullivan: Lewis Schiff. Yeah, Lewis.
 
Shannon Waller: I was thinking about him, too.
 
Dan Sullivan: Yeah. And he was talking about interviewing people who were professionals—lawyers, accountants—entrepreneurial, but within a profession and very, very structured by compliance rules. And then he talked about corporate executives, and then he talked about founders of entrepreneurial organizations. And he showed how differently people thought about six or seven topics that were common. I don’t recall all the different categories that he explored here where he had asked each of the three groups about a particular topic and how they talked about it. The one thing was failure. The professionals and the CEOs were much closer to each other in how they handled these things. But the big thing about the entrepreneurs was their favorite topic of talking to other people was, “What’s your biggest failure and how did you respond to your biggest failure?”
 
Whereas the professionals and the CEOs didn’t even want to have the topic discussed. They wouldn’t admit to failure, and they didn’t want anyone to know that they had experienced failure and they didn’t want to go deeply into it. They considered this the—you know, at some point they might need a psychiatrist or they might have to sit down with their pastor or rabbi and talk about these things, but they didn’t even want their family to know about it. They didn’t want family members to know about it. It wouldn’t be something that they would discuss in their social circles. And entrepreneurial business founders, it was the number one topic that they wanted to talk about.
 
Shannon Waller: I remember that. And if someone was in the room that only wanted to talk about the successes, that person was pushed to the side, they’re like-
 
Dan Sullivan: It was boring, first of all.
 
Shannon Waller: And not real.
 
Dan Sullivan: Yeah. And it’s made up. It’s made up.
 
Shannon Waller: Yeah.
 
Dan Sullivan: It’s marketing. You’re doing marketing, or you’re doing PR here.
 
Shannon Waller: Yeah. And they want to learn from it.
 
Dan Sullivan: But the entrepreneurs wanted to know “What was the biggest failure and how did you deal with it? What did you learn from it? And how are you better today because you went through the failure back then?”
 
So what it tells me is that the experience of failure has a completely different reality in the lives of entrepreneurial business owners than it does anyone else on the planet. Maybe the closest, and I think that the closest to it, and I’ll relate this to another area of human activity. I had a plane flight from Phoenix to San Francisco where I was going on my own, and we were going to a big conference, and Babs wasn’t going. Babs was doing something else that week. So I started talking to the person next to me, and it turns out that he was a learning facilitator for the US Marine Corps.
 
What he did is that he worked with new Marine Corps, their soldiers, but they’re the youngest of all the military. In other words, these are not college graduates for the most part, they’re 18-year-olds. They come at 18, 19 and it’s volunteer, it’s strictly voluntary. Marines are not drafted. And so they’re 18, 19, and 20. The Marine Corps really wants 18, 19, and 20 year old frontline soldiers because the thought of dying really hasn’t occurred to them yet. Not only that, but they don’t have a career to put at risk, for the most part they don’t have a family that’s at risk. And oftentimes, they had to make a choice between going into the Marine Corps or going into jail, or they were on a downward path somewhere in their life, and this was a chance to turn their life around.
 
And their basic training is grueling. But the one thing they’ve done in the Marine Corps to make it less grueling is that every time they go through a practice combat scene or practice raid, they pull all the soldiers together, the Marines, I’ll just call them Marines, and they say, “What could we do better? First of all, where did we screw up? Where did we screw up? And how could we approach this?” It’s an Experience Transformer. It’s, “What did we do well? What didn’t work? And if we’re doing it over again next time, how would we do it better?”
 
I’ll give you a couple examples. When you’re in combat, your heart rate goes up to about 150. It goes up, and these are very fit human beings, so they can sustain high heart rates for a long period of time, but you dehydrate really, really quickly. You’re just using up massive amounts of water. And the one Marine recruit said, “Why don’t you use Camelbaks?” And he said, “Don’t use canteens. First of all, you have to reach back and get the canteen. You have to take it out of the pack and you have to unscrew it, and you’re vulnerable when you’re doing that. So you’re out of action while you’re doing that. There’s not a lot of water in it, you can’t carry around.” But he says, “You could have a Camelbak that had a gallon of water in it and you could be sipping all the time. And it’s right there. You just have a mechanism. So you just go like this and you’re sipping and you’re fully engaged with combat, and you’ll pace yourself: Every five minutes or so, you take a big swig.”
 
So they wrote that down and it was published in a little booklet for the week. There’s four or five major centers where the Marines’ thing, and they put them in little books and they go sideways. It doesn’t go up the ladder to be approved. It just goes sideway across the Marine Corps. And his job was to capture a particular class that was coming through and there was no censoring it. And everybody said, “What do you think about that?” And he said, “Within three months, the Marine Corps had equipped everybody, not just the recruits, but everybody who was already an active Marine. They just gave them Camelbaks.”
 
Shannon Waller: Nice.
 
Dan Sullivan: And these are usually 18-year-olds with a lot of street experience. They were practicing Marine Corps in civilian life before they became Marines. That’s what you’re looking for. You’re looking for rough-and-tumble people who think they’re going to live forever. The other one was... And they had switched over because the history of the Marine Corps was that they get shipped to a beach and then you move in line and it’s through jungles and everything. Well, that is long gone. They don’t fight those wars. They fight urban wars now where they’re going into villages, they’re going into cities—urban. And urban warfare is much more dangerous than jungle.
 
So they were talking about that when you are in a situation, there’s a long hallway and the enemy is down at the other hallway. What you’re supposed to do is get a grenade and fire it down the hallway and then it blows. And the Marine said, “Well, wouldn’t it make more sense that two seconds after you throw the grenade, they can hear it coming. And everybody at the end of the corridor is cowering, just two seconds later, just run as fast as you can with your machine gun and kill them all because you got them totally vulnerable.” That went straight across the Marine Corps. And then another guy says, “Yeah, and when you’re going down, there’re expecting you to come on high. So give everybody a skateboard and just get real low and just give yourself a lot of propulsion and just take the skateboard.”
 
So those are three examples that came from the street, the Camelbak and the... Don’t give the other side any chance to react. You got their total attention with the grenade, now shoot them. Okay, but it goes sideways. It doesn’t go up the ladder. “Well, I don’t know if we can approve this. I don’t know if we have the budget for it.” And they said, “Let’s just do it.”
 
So that’s an example. And this is all coming out of failure. And then they have speakers who come in and all the speakers are sergeants. The military is held together by a group called sergeants. And sergeants are non-commissioned officers. So there’s about five levels, six levels of sergeant. These are the people who are between the officers and the men or the women and the Marines, and they have to come in and talk. The only thing they can talk about is because of their mistakes, Marines got killed.
 
Shannon Waller: So they’re all stories, and it’s all based on real experience.
 
Dan Sullivan: They’re all failure stories.
 
Shannon Waller: It’s all failures. Wow.
 
Dan Sullivan: And what it does, I asked him about it and he says, “Well, first of all, it makes the recruits understand what it’s like to be a sergeant when you have recruits that don’t follow the rules.” First of all, people get killed and then the sergeant carries that for the rest of their life that they got people killed. And part of the sergeants getting over is to turn their negative memories into lessons that are going to save other people’s lives.
 
So if you take professionals on this side and CEOs on this side, and then you have entrepreneurs and you have combat military on the other side, I think there’s much more of similarity that failure is precious. Failure is precious, if you live through the failure. So I think the military and entrepreneurs are the fastest-learning groups of people in the world. There’s just as much failure as there is success, I mean on a constant basis. You have to get a handle on the value of every failure and extract the maximum future value out of anything that went negative in the past. And you’ve got to have a sense of appreciation for the failures.
 
Shannon Waller: And that’s not a normal thought for most people to appreciate the failures. That’s unusual, Dan. Most people are like-
 
So there’s a transformation that needs to happen from, because anytime you think something’s going to work and then you do it and you give it your all or what have you, and then it doesn’t work, there’s an emotional response we have to that. So it sounds like we need to transform that into learning that will set us up for a more successful future.
 
Dan Sullivan: Yeah.
 
Shannon Waller: What comes to mind as you were talking is there’s two tools in particular, Experience Transformer. And when we use the Impact Filter to share our experience, and you’ve coached this a lot, which I really love and it’s one of my favorite uses of the Impact Filter. So you say, “Here’s the situation. What’s the purpose, importance, and ideal outcome of going into insurgent territory, or what have you? Here’s the best example of when it went really well. Here’s the worst story of when it didn’t. And then here’s the success criteria to avoid the worst and ensure the best.”
 
I find that way of translating experience and learning so incredibly exciting, real. I can wrap my head around it. It’s a story. It’s not just “Do this, this and this,” with no context as to why. So the Impact Filter is such a useful way of communicating real, genuine experiences and just use the word ‘context’ and the context around why you want to do this and not that.
 
Dan Sullivan: Yeah. Well, the thing is that they’re connected to each other. Failure, learning, and improvement are all part of the same system. You don’t have failure, you don’t have any raw material for improvement, or you don’t have any raw material for learning. And if you have no learning, you have no improvement. So you can’t say “This is the bad part of the process.” Failure is as important as learning. Learning is as important as improvement. And improvement is what sets you up for your next failure.
 
Shannon Waller: Right. Right.
 
Dan Sullivan: Because it means that you’re constantly moving into new territory where you don’t have any experience.
 
Shannon Waller: And that’s another key aspect of this. If you’re not failing, you’re not going into new territory, you’re not experimenting, you’re not testing, you’re not trying stuff out, and that means you’re not moving forward.
 
It’s interesting. I love this re-contextualization of failure, Dan.
 
Dan Sullivan: Yeah. And it explains a phenomenon that’s been happening in our social and cultural world now for, I would say, last three or four years, maybe five years. And it’s the “woke” phenomenon, and it’s the desire to be protected from your own experience. My feeling is “Don’t put me in any situation where I feel uncomfortable.” That’s not even failure. That is, “I don’t want to have my feelings disturbed or hurt.”
 
It seems to me that that is the one-way, no coming back tunnel to oblivion because they were guaranteed a certain world that was going to be constant, you’re going to be taken level from level, and we’re going to give you absolutely the best care and support all the way through. And then it’s a wonderful world and it goes forward, and there’s just going to be peace and prosperity for the world. And then something happens that contradicts everything that you’ve been promised and your entire confidence and capability as a human being was not based on your own experience, it was based on someone else’s promise, and the promise wasn’t true.
 
Shannon Waller: Was untrue.
 
Dan Sullivan: It was untrue. And your entire system falls apart. The word that’s used a lot is ‘fragility’. We’ve been raising very fragile people simply because we won’t allow them to deal straight on with their feelings of failure.
 
Shannon Waller: And with their own experience. And that’s partly why I think this conversation’s so critical is that failure is necessary.
 
Dan Sullivan: Failure’s good. Failure’s good. Failure’s good. Have some every day.
 
Shannon Waller: See, I knew you’d have a totally different spin, Dan. I love it. And look at it as raw material as you talked about. I love this approach because it just takes the sting out. It just means, “Oh, good, I’m moving ahead. I’m growing.”
 
Dan Sullivan: Well, the other thing, it eliminates two phenomenal negatives in most people’s life, and one of them is guilt, and the other one is blame.
 
Shannon Waller: Yes. I was just thinking blame, but I hadn’t thought about guilt. Yes. Well, and guilt is blaming yourself.
 
Dan Sullivan: Guilt is blaming yourself. And most people have a hard time doing that. So they blame somebody else for their guilt. Shannon Waller: And it’s very empowering, because when you take it from being someone else’s responsibility and go, “Oh, not that big a deal, just means I tried something. I can learn something and that’s going to set me up for new experimentation, new success, new failure.” Then it just becomes part of the process.
 
And again, you’ve said this a lot, and we’ve even talked about this on previous podcasts: You’re either on the winning team or you’re on the learning team.
 
Dan Sullivan: If you’re on neither team, you’re on the losing team.
 
Shannon Waller: Exactly. The only time you’re on the losing team, is if you’re not winning or you’re not learning. So if you have this skill and this resilience and this internal fortitude to just go, “Oh, what can I learn from that?” And after hanging out with you since 1991, this is pretty much my mindset on a lot of things is, it’s like I just don’t even see it. And to use one of our other concepts, I’m almost always in the Gain, not in the Gap about it. I’m not measuring myself against that perfection. I’m like, “Oh, okay, now we know what to do better next time.” And it means you can move so much faster, Dan. The thing I love about this attitude is you don’t get hung up in remorse or beating yourself or anyone else up. It’s more like, “Oh, okay, what can we do better, easier, cheaper next time?” And then you can move. It leads you to action.
 
Dan Sullivan: Yeah. Why failure is so good for you, properly understood. Properly understood and transformed, failure is protein.
 
Shannon Waller: “Properly understood and transformed, failure is protein.” I love that, Dan. Makes me think of the expression like eat failure for breakfast. It’s one of those things where you can embrace it, look at it, and not get hung up on it. One thing I’m super, super clear on, Dan, there is no perfectionism in entrepreneurship. By its nature, we’re doing new things, but they’re untested. Who’s going to define perfect when it’s never happened before?
 
Dan Sullivan: Well, there’s no perfection, period. I would believe in perfection if I ever saw any evidence of it. I’ve seen people who are far better than anybody else, but is that perfection? Because they have critics. They have critics. They have people who say, “Yeah, but they can’t do this and that.”
 
So first of all, there’s absolutely no agreement on what perfection is, and there’s no evidence ever happening.
 
Shannon Waller: Okay, Dan, this is funny. I wrote a paper, I think I was 18 or 19, it was a university correspondence course, and I wrote a paper about why perfectionism, even if it did exist, would last for literally a split second because then something would change. Now, I didn’t have your articulation of it, but it’s just not anything to aspire to, to look forward to, to think is real because it’s not. We make it up. We also make up failure, I would probably agree. It’s just did things go the way that we wanted them to or not? And if it didn’t, what can we learn from it? And even if it did go the way that we want—and This is what I love about the Experience Transformer, how can we make it even better next time?
 
We used to call it the Negativity Transformer until we realized that actually looking at what worked, what didn’t in any situation could make the next one better. But that’s that learning mindset, properly transformed, when you can transform your experience into something to make it better next time, where’s the failure at that?
 
Dan Sullivan: Yeah. So it’s a really interesting thing, and you just have to accept that there’s this—it’s “Apply, lather, rinse.” There are stages you have to go through, and if you leave out one of the stages, you don’t get the other kind of stage.
 
But I think we’re coming to a head. There’s a showdown between the perfectionist world and the learning world, and the perfectionist world, by definition, will lose the showdown.
 
Shannon Waller: I like that.
 
Dan Sullivan: My thing is that the one that can transform losing will win.
 
Shannon Waller: Nice.
 
Dan Sullivan: The one side can’t even transform winning. So they’re constantly losing. And you can just see it. But the other thing is that this attitude makes you comfortable in your own skin.
 
“Is your future going to be filled with failure?”
 
I said, “Absolutely. Just as much future as the past. I’m going to have constant failure in my future, and it is always been that way. Why would it be any different in my future?”
 
“And are you cool with that?”
 
And I said, “Yeah, I’m cool with that.”
 
“What will you do with it?”
 
“I’ll just probably have bigger breakthroughs out of my failures than I have breakthroughs out of my success.”
 
Shannon Waller: I love it.
 
Dan Sullivan: You have more emotion to transform.
 
Shannon Waller: Oh, nice. Yeah. So the stronger emotion, the bigger the transformation.
 
Dan Sullivan: Well, it’s a big whack of energy when you fail. “Whoa, whoa, whoa!” You’re fully attentive. You’re appreciating the whole-
 
Shannon Waller: It’s a big wake up call.
 
The last point I want to make about this, Dan, is there’s real value in sharing, as the Marine Corps does, sharing the lessons and being transparent about it and letting people know what the process was. When entrepreneurs share, “Here’s what I did that really worked. Here’s what I did that really didn’t,” there’s this credibility that happens.
 
If someone presents themselves, like the professionals you talked about, as only ever only winning, no one trusts that. That’s not credible. When you can actually share, “Yeah, here’s where I messed up. Here’s where it totally went awry. That’s what I thought would happened. Here’s what really happened,” then the credibility and the trust that comes from that is huge. And we can do that with ourselves, our families, our teams, our clientele, our bigger audience. And that’s really powerful to say, “Here’s what happened and here’s what we learned.” I think that the, again, credibility and relationship that happens out of that is pretty profound.
 
So Dan, anything else to say to wrap up? If someone’s experiencing a failure, what can they do to quickly shift their mindset and get the learning?
 
Dan Sullivan: My approach is “Where have you had a failure in the past that you got a tremendous breakthrough out of it because you’re willing to get learning out of it and as a result of the learning?” So if you’ve never done that, then that’ll make you super fearful. It’s like every failure, not transformed makes your future smaller.
 
Shannon Waller: Ooh. “Every failure not transformed makes your future smaller.”
 
Dan Sullivan: Yeah. So you can not transform your failures, but I just want you to know that your future just got smaller. It became more restricted. You’ve just made yourself less capable for the future by not transforming this failure. You can do it, no problem with it. You have a choice of dealing with the failure and not failure with it, but just you’re penalizing yourself for your future. The failure didn’t penalize your past, your refusal to transform the failure penalizes your future.
 
So how’s that?
 
Shannon Waller: Brilliant. I think we should end on that.
 
Dan Sullivan: Okay. It’s like a Euclidean proposition.
 
Shannon Waller: Mic drop is what I was thinking.
 
Dan, thank you for contextualizing failure in a new way, which leads to us embracing it and welcoming it and using it to expand our future. Thank you.
 
Dan Sullivan: Thank you, Shannon.
 
Shannon Waller: That’s awesome.