But how can business leaders, faced with major setbacks, respond to these situations?
Here are five tips on how to overcome defeat and use it to your advantage.
1. It’s the response that counts
Remind yourself that any challenging event is ‘just an event’. What matters is how the event affects a person or an organisation. You can get bogged down in the negatives and on ‘what went wrong’, or you can decide to learn from it and focus on moving forward.
A few years ago I was in charge of an IT education centre in the UK. It was a purpose-built facility accommodating 48 classrooms and over 200 bedrooms. A decision was made by the US head office to release the real estate and we were given eight weeks to close the facility down. Acknowledging that the inevitable was coming we came up with a solution to build a smaller and more flexible facility and offload the training function to a third party. We ended up with a state-of-the-art training centre and cut costs by 80 per cent. We sold not only the building, but also the entire training function and generated an additional income for the company.
2. What can you learn?
Facing setbacks, like losing an almost certain deal, is part of business life. It might not be a sales/order situation; it might be some other activity that will certainly damage the organisation. Once it has happened, it’s happened.
Allocate a fixed amount of time to promptly identify what you and the organisation can learn from it. Make sure that key players and stakeholders are part of the analysis and that the main lessons are shared. Don’t wallow in the negatives – find the lessons, then move on.
3. Analyse the winning solution
When we lose a big deal, we tend to focus on what went wrong. In fact, there is much to learn from analysing the winner’s solution and comparing it to your own. This step should be built into a standard process so that you always look at what the winner does better than you. Ask the customer WHY they choose the other supplier. If you can, look at the winning bid. What things can you take from their solution and improve your own offer?
World-class athletes conduct detailed reviews of their own performance, but they also closely analyse how the winners beat them. They identify actions and behaviours that they themselves may be lacking. Football managers study the form of competitors: they watch videos, they work out the standard plays – and then they go and improve their own game. Business should be the same – always look at what the winners are doing.
4. Putting your house in order
In addition to identifying the factors that caused the loss or failure, the leader should also take some time out to reflect on his organisation – its structure, policies and procedures. Despite best intentions, could the same thing happen again? Are there any changes you need to make to the organisation’s structure to minimise the risk of such failures in the future?
5. Review your strengths, successes and your vision
Once the lessons have been taken on board, the organisation should always re-visit its vision, beliefs and values. Individual disasters do not mean that everything is bad. Remind staff and key players of all that is good with the organisation and what you are working to achieve. Re-visit some previous successes. Re-energise staff for the longer journey, for the bigger goal ahead.
Steve Gilroy, chief executive of Vistage, Britain’s oldest peer-to-peer mentoring organisation for SME owners, which recently celebrated its 25th anniversary in the UK. Vistage ensures that SME owners get expert advice and moral support from fellow owners at regular monthly meetings.
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