Malcolm Turnbull wants more Australian businesses to risk failing. He said so in his ‘Ideas Boom’ announcement recently. Here’s why I mostly agree with him, and also, some advice on how to make sure you don’t fail.
“Innovation is our future”, spouted the PM in his $1.1 billion policy announcement. What comes with innovation is the risk of failure and many of the components of the PM’s package are about encouraging risk.
I have long thought, and many agree, that for some reason we link our self image and reputation to succeeding at everything. I believe our ego and pride stop us from being adventurous. If we can change our culture to be more okay with failure then more of us will have a go and more will succeed.
I fully support the PM’s encouragement of more businesses taking risks, but at the same time I don’t agree that what we want is an ideas boom. I don’t think we have an ideas problem. What we have is a ‘good ideas problem’.
Many small businesses fail within the first three years of starting. Understanding why they fail is important in making sure that you don’t. An ASIC report found that nearly half of failed businesses lack strategic management skills. Another major reason for small business failure is the lack of the demand for the product or services that the business was trying to supply. In other words, a lot of small business failure can be put down to bad ideas and poor leadership.
So before you rush in and take our PM’s advice and happily risk failure, here are two recommendations that may increase your chances of success. Firstly make sure your idea for your start up is a good idea. Research the problem that your idea will solve. Establish that there is a sustainable market for it.
Secondly, ensure that you have the management and leadership skills to support your business success. Not everyone does, so before you rush in, get the skills you need or get good advice.
Let’s hope that the next big thing is a ‘good ideas boom’.