When Taking a Risk Ends in Failure
Earlier in this book, I touched on a difficult period I experienced during the early days of FWI. I was raising questions about the meaning and truth in everything, including who I was and what I was to become. Obviously, this is not a unique experience. These kinds of questions surface for all of us as we wrestle with our humanity, wondering what's the point … or even if there is a point at all.
But let me back up a little. Ever since my youth I've been intrigued by the concept of personal excellence—the science and art behind human potential. It may sound odd, but as a teenager I loved listening to motivational speaking tapes I'd borrowed from my dad. I would play these recordings again and again, fascinated by the stories of greatness and intrigued by the secrets of excellence. This interest continued throughout college, graduate school, and beyond. And when I later found myself questioning everything, I turned to seminar training, driven in great part by my desire to find the key to what makes a person successful—or at least the commonalities among successful people.
I took courses in leadership, entrepreneurship, and negotiations. And my search for answers had an unintended side effect: as I was studying, I often pictured myself in front of the room—as the teacher instead of the student. Years before, I had taught several marketing classes at the local community college. Now that I was back in a learning environment, I found myself missing that experience, that interaction with curious learners. It was about that time that my business mentor approached me about becoming an executive coach. Intrigued, I headed off to a three-week training program run by a California-based company. The program not only taught me invaluable coaching skills, it also inspired me to go down the path of serious introspection. For me, it was the right place at the right moment.
Though I didn't stay in the executive coaching field for long—the demands were too great at a time when FWI needed my full attention—I kept in close contact with the training company. Two years later, through an odd chain of events, the company's leaders approached me with an interesting proposition.
The founder, whom I'll call Dave, had been having problems. While his consulting practice was thriving, his seminar product line was languishing. The shoestring sales staff was barely keeping it alive, and its losses were eating into the profits of the consulting business. Dave flew to Phoenix and proposed that he spin off the bleeding seminar business to me. I was hesitant, but agreed to take a look.
Considering my interest in personal excellence, the vehicle was perfect. While I had some issues concerning the structure of the seminars themselves, I believed that the main problem lay with how they were marketed. I decided to take the risk. I agreed, in principle, to take this dying product and breathe life into it. I thought it was just a matter of strategy, money, and time before we would have rooms full of eager, paying customers. Moreover, I would finally have the opportunity to teach others what I believed about success and personal excellence. I had the means to the end.
This will give you some insight into my perspective on risk: even before we had a deal in place, I incorporated the seminar line as a new business and hired four people. I had a close relationship with Dave and wanted to hit the ground running. I mean, how hard could the seminar business be? (If you run a seminar business, you might as well skip the next few sentences. You probably already know how the story ends.) Well, I'll tell you how hard it is. We worked day and night to get the business off the ground. We gave away seats to fill the rooms. After five months with only $9,500 in revenue, I realized that it just wouldn't be possible financially to make this new company work. After much agonizing, I shut down the business and returned everything to Dave. Amazingly, even after five months, we still didn't have a signed partnership deal. We had never come to terms about what our partnership would look like, and now it was over.
On one hand, this experience was a lesson to me in the importance of conscientiousness when it comes to risk taking. Before taking over the seminar business, I set limits concerning the amount of money and time I'd devote to this new venture. When I exceeded the money limit long before the time limit, I knew it was time to pull the plug, even though it hurt to do so. But should I have even entered into this arrangement in the first place? Because of my risk-taking nature, I'm inclined to jump head first into interesting challenges—in this case, so much so that I refused to be dissuaded by others who could judge the situation much more objectively. Looking back, I had tepid support from stakeholders at FWI, who were rightly concerned about me stretching myself too thin. Similarly, when I proposed the idea to my fellow members of TEC, a peer-group organization for CEOs, the response was unanimous: Don't do it. I went ahead anyway, and the failure, though costly, wasn't fatal. The experience taught me that in the future, my passion and propensity for risk must be tempered with a bit more due diligence.
That being said, the experience itself also taught me a lesson about accountability and integrity. Aside from my self-imposed financial limitations, Dave and I never finalized our business partnership because we ran into larger issues of values and beliefs. Having founded the seminar business, Dave obviously had very specific ideas of what they should be. At first, I concurred with his vision. However, after months of analysis, brand work, and product development, I discovered that I had a very different vision for the seminars. Like Dave, I had been studying the issues surrounding personal excellence for twenty years. But we had come to different conclusions about how to guide others in their own pursuit of it. This became clear only after months of intense meetings, philosophical discussions, and collaborative analysis. In the end, we found that neither of us could follow the other's path, not for all the money in the world.
Because both of us took full ownership of our roles in the relationship, we were able to amicably part company. Was there disappointment and frustration? Absolutely. But because we stood by our beliefs—yet were respectful of each other's position—we were able to salvage our relationship from the failed partnership. Thus, the experience reinforced the value of accountability and integrity both in business and in life.
The Final Lesson
And finally, the experience reinforced for me a vital lesson about the nature of success, one that I first learned back when I was sixteen, surreptitiously listening to my father's motivational tapes. It's a common theme, but one that we often forget in our winner-take-all culture: Success is an ongoing process, a path rather than a final destination. And risk taking is a vital part of that process, as important as hard work. The worthiness of our goals, principles, and dreams inspires us to take these risks—and even if we fail, we've still taken another step toward realizing them. In this way, risk should not be seen as an all-or-nothing proposition, but rather one of the most important ways in which we aspire to the vision we have for our companies and ourselves.
In 1997, Apple Computer launched its first major brand advertising campaign in several years. Created by TBWA Chiat/Day, the new "Think Different" campaign celebrated the "creative geniuses" of the twentieth century: Albert Einstein, Martin Luther King Jr., Mohandas Gandhi, Pablo Picasso, Amelia Earhart, and Thomas Edison, to name a few. Artists, peacemakers, inventors, and pioneers, these individuals all had the courage to think in a different way, to challenge the norm, to take a risk. Previously, Apple and TBWA Chiat/Day had collaborated on the legendary "1984" ad, in which one courageous woman took on the Orwellian sameness of a PC world. While the "Think Different" campaign represented a softer approach, the core message was the same: risk takers can change the world.
When it comes to Apple itself, CEO Steve Jobs has embraced the role of risk taker to keep his company in the game—and in the process breathe life into the ailing music industry. The Apple brand is undeniably hip, having achieved cult status and a following among designers and artists. However, as we all know, "cult status" generally translates into "miniscule market share." With only 3 percent of the global computer market, Apple has been a niche player in a universe dominated by Microsoft.
But instead of languishing on the sidelines of the PC game, Apple is redefining itself by taking risks. According to BusinessWeek, after the tech implosion of 2000, Jobs told employees that the company would "innovate through the downturn" rather than resort to layoffs. That innovation has led to the gradual transformation of Apple into a "high-end consumer-electronics and services company à la Sony." Coming on the heels of its iPod™ MP3 player, Apple launched the iTunes® Music Store amid great fanfare in April 2003. Not only did iTunes offer easy downloading of music from all five major music labels at 99 cents a song, it promised exclusive tracks from artists and special videos that users could view for free.
Many heralded Apple's service as a savior of the music industry, which, in an attempt to stop illegal file sharing, was filing lawsuits against twelve-year-olds and rolling out cumbersome online services that "rented" music to subscribers. With the introduction of iTunes, it appeared that someone—Jobs—finally got it right. "Consumers don't want to be treated like criminals, and artists don't want their valuable work stolen," he remarked. "The iTunes Music Store offers a ground-breaking solution for both."
By the end of 2003, iTunes would be expanded to Windows¯ users. This and the earlier release of an iPod for Windows represented another kind of risk for Jobs. "The reason Apple has succeeded in creating elegant, easy-to-use software and hardware is that it has complete control over the design and manufacturing of its products," noted BusinessWeek. "But coming out with Windows software, such as iTunes, and hardware, such as the iPod, puts Apple in the same situation as any other third-party developer for the dominant Microsoft platform."
However, while Jobs will face a challenge in developing elegant, easy-to-use products for Windows, the rewards could be huge. "Clearly, Apple will benefit enormously if it boosts its share of the computer market by even 1 percent—such a gain would lift its revenues by nearly a third and increase profits even more," reported Fortune on the day iTunes was launched. "In the meantime, if [iTunes] takes off—and computer users of all stripes start buying millions of songs on line each month—that will translate into tens of millions of dollars in new revenues per month for Apple."
Just over four months later, Apple reported that iTunes users had purchased and downloaded more than ten million songs. Looks like "thinking different" is paying off.
Jane Black, "Where ‘Think Different’ Is Taking Apple," http://www.businessweek.com, August 5, 2003.
"Apple Launches the iTunes Music Store," Apple Computer press release, April 28, 2003.
Black, "Where ‘Think Different’ Is Taking Apple."
Devin Leonard, "Songs in the Key of Steve," http://www.fortune.com, April 28, 2003.