Don’t Fail Your Business – Avoid the Most Obvious Traps

This is a guest blog by Eve Baxton.

Owning a professional business is a huge responsibility. It involves all the potential risks and traps that are imaginable. According to a survey in 2009 by PrinceWaterHouseCoopers more than half of the enterprises suffered from the economical crimes. In most of the cases, small sized enterprises are the best prey to fall for potential traps around.

These dangers include employees or managers misrepresenting or manipulating the financial information, customers misusing the enterprise’s borrowing in criminal activities and contractors producing false bills. Along with that, other elements exist that perpetrate fraud against the enterprise by electronic means. This includes hacking, manipulating the telephone service and robbing customer’s confidential data, such as credit card numbers or usernames and passwords.

The ultimate quest that should be taken care of as soon as possible, to protect your business is identifying the sources of potential fails. That is not an easy task to take on, for a less experienced businessman. By just considering some basic and yet important things, the enterprise can be easily protected from potential frauds, however.

According to the statistics, the most common reasons for falling into these traps are the lack of experience, commitment, and, most significantly, management. Let’s take a look at the potential traps that most of the enterprises, no matter big or small, fall for.

 

• The Innocent Employee Trap
  According to the facts, most of the time insiders; employees, managers, or company’s officials, are the main reason for an enterprise to fall and fail. These employees “innocently” steal the assets of the company, and commit accounting frauds. Detecting such actions is vital; it requires a lot of methodologies and commitment to be employed, however.

• The Clever Customer Trap
  Another hazardous trap that most of the enterprises fall for is the clever customer trap. It has been found that many customers are using fake identities, stolen credit cards, or are filling out fake liability and injury claims to perpetrate the company. All these actions by “the sweet customers” only results in the enterprise’s money being taken away.
• The Fake Return Scheme Trap
  The most common victims of this type of frauds are retailers. It is the best scam for the clever customer to perpetrate against any enterprise. Most of the times, the customer brings back used merchandise that has not been bought from the same place and tries to return it and get new merchandise under the shelter of the fake return schemes.
• The Greedy Contractor Trap
  Most companies rely on outside service providers for its survival. Therefore, many of the enterprises fall for the greedy contractor trap. It is not uncommon for the contractor to bill more than the task he has done is worth, and more often even asks for the billing of a task that has not yet been completed. Strong policy, terms, and conditions should be presented to the contractors, before entrusting them with any task, to avoid these attempts, and leaving no room for the contractor to commit such frauds.

 

Protecting Your Professional Businesses

After viewing the potential traps, let’s take a look on the precautionary measures that an enterprise can take to avoid unnecessary fails; these important methodologies can fraudproof your business against its very own employees.

1. The Method of Anonymous Employee Reporting

Utilizing this method is one of the best methods for detecting the potential dishonesties that can occur within your business; compared to scheduled employee reporting, the violators’ opportunities to destroys any vital fraud traces are severely limited.

2.  The Method Of Surprise Auditing

Along with the regular, scheduled internal audits, surprise auditing should also be performed in the enterprise, as it significantly increases the chances of detecting potential irregularities, thus making your company more protected.

3. The Method of External Auditing

Along with the above mentioned methods, this is also a significant tool to determine a potential fraud; it should be held at regular intervals.

 

Business Insurance – The Ultimate Protection

Along with all the above methodologies, the most important step in stabilizing an enterprise is business insurance. It plays an important role in the art of preventing the failures related to undetected frauds. Professional business insurance protects the business from many unexpected frauds, and it enables a recovery from what may seem as a catastrophic loss. Even when insuring your business, you should consider several key factors, however; for your business insurance to be viable for you, it needs to offer an equal protection for any business, regardless of its size, and to provide protection from all sources of frauds and failures. First thing that comes to mind is protection from theft. Theft is the most common and uncontrolled source of assets loss that occurs in most enterprises internally and externally, making insurance without theft protection almost useless. Protection from litigation is another important aspect; while unfounded law suits from wealthier competition are likely to turn out in your favor, the costs before you prove your innocence can cause your business to fail, so proper insurance has that covered. Protection from unwanted liabilities provides you with protection, when the assets, coming from your company, are used for any illegal activities, which is not a rare occasion with internal frauds and thefts.

It’s your responsibility to implement a fraud proof protection method, that suits best to your enterprise’s needs, properly. All it requires is some commitment and dedication towards the business; no matter how malicious the fraudster’s aims are, you can stop your company’s fail before it’s to late!

What is traditional consultancy and why it mostly fails

What is consultancy and is there a value in it?

The truth is that only a comparatively small number of consulting projects seem to be successful. Either consultant recommendations fail at implementation phase, or don’t even survive reality checks. In the worst of cases, these have disastrous consequences for the organization. As Ferdinand Piëch, the CEO of Volkswagen, famously said: “If you want to ruin a company, you only have to try fixing it with the help of external consultants.”

Story of Bag, Borrow or Steal, one of the first online sites allowing rental of expensive items (from several days to months) comes to mind.  In securing venture capital, a consulting firm was brought in to take the company to next level. It recommended that, in order to attract a more high profile customer, the company change its name – the very name that, in addition to being instantly recognizable and very descriptive of the nature of the business, was also forever immortalized in the movie Sex and the City. The new (proposed) name was Avelle, thought by the consultants to sound more luxurious.

Following the consulting firm’s advice, the end result was lost sales as loyal customers became confused by the name change and the brand equity built into the original name was lost as people wondered who the heck was Avelle.  Top executives of BBS were fired and the company returned back to its original name.

BBS is far from being an exception, nor are consultancies only amateurs. Take McKinsey, one of the best of the breed. Its advice led GE to loose $1 billion in 2007 and Swissair to its bankruptcy.  The list of McKinsey screw-ups is long. And if that is the best of the best, it is easy to imagine what other consultancy firms are up to.

Some estimate that about  80% of all consulting projects fail.

Usually, the traditional consultancy firms are called upon for the following reasons:

1. Political leverage: CEOs that want or need to make an unpopular decision often bring in a consulting firm to help.
2. Pool knowledge across functions: In large companies, cross-functional problem-solving rarely happens. Just getting different functions in a room typically unlocks creative problem solving.
3. Pool knowledge across levels: Consultants interview, watch, and tag along with people down the organizational structure, often starting with customers and moving through sales and up. Top management of a company rarely does this. There are tremendous insights to be had by doing this.
4. Deep focus on one problem.
5. Consulting firms have access to way more data.
6. The ability to structure a problem and to approach the task of identifying a solution in a methodical manner.
7. A totally unbiased opinion on the topic.

The few studies that one can find identify several reasons for failure, which fall into four groups: personal characteristics of consultants, technical shortcomings of proposed solutions, problematic client–consultant relationships, and socio-political aspects of the client organization.

The underlying reasoning of how consultancy works, is valorized and perceived in what Heinz von Foerster called “trivial machine model.“

A trivial machine model logic of traditional consultancy is that it happens between two parties, consultant and client brought together for working on a certain project, and that consultant possesses more experience/knowledge/expertise and can more or less clearly identify a problem and propose a solution.  The focus is on analyzing and bridging the gap between the consultant’s body of knowledge and skills and the requirements of the client.  Assumptions here are that client information (especially related to weaknesses, problems or any issue that requires an external consultant intervention) is readily available, comprehensive and understandable. It is also assumed that the consultant can freely and efficiently access this information, understand it and process it.

In reality, however, it’s impossible for the client or even the consultancy to arrive at an “authentic” problem description.

The traditional consulting model is not only linear and simplistic but also not realistic, as social factors (social interconnection, interaction and environment in which the consultancy and the client operate) are largely ignored. These factors are essential – decisive in make-or-break of a project – to consider in what von Foerster described as “non-trivial machine model.“ A significant factor that must also be considered – this has to do with the “no one wants to rock the boat” psychology – is that consultants usually don’t feel comfortable telling (and thus don’t tell) to the top management of the client that some processes/structures are not optimized/performing; nor does the client’s top management feel good to have consultants come and tell that they are not doing well (in some cases consultants are dismissed/fired after having implied, in their recommendations, any wrongdoing or suboptimal performance/intention on part of the client’s top management).

Niklas Luhmann, German sociologist famous for his social systems theory, picked up and applied von Foerster’s theory (of trivial and non-trivial machines) to social systems. According to Luhmann, communication is the most important part of any society. All social relations are conceptualized as processes of communication – communications that connect to earlier communications and that call forth further communications. The crucial point is that this communication process takes place relatively independently of individual human beings involved. According to his theory, although communication cannot be effected without the involvement of human beings, the particular development of the communication process is beyond their control.

For example, the same word “yes” might be understood as signaling a confirmation, a doubt or even a rejection (if interpreted as irony). Thus, the meaning of a message, i.e. the concrete communication, is not produced by the speaker but by the listener.

Applying Luhmann’s theory to the social context of consultant-client, we need to differentiate three systems: consultant, client and communication media. The theory suggests that any intended consulting intervention becomes impossible right from its beginning. Following Luhmann, the only reason for the employment of external consultants is the possibility that the client’s systems (internal/external processes, operations, information flows, etc.) get perturbed/“irritated”. However, not all (consultancy) interventions cause such a perturbation, as this is only decided by the client system itself.

This model is more comprehensive, as it includes all considerations of the linear/traditional consultancy logic but also social factors. When determining whether to employ or not a consultancy, the only possibility for clients is to observe and decide which consulting firm has the most potential to perturb its systems. Finally, the stage of evaluation becomes redundant as there is no content or objective to evaluate, and nobody is able to evaluate the degree of perturbation.

All of the above is not to imply that consultancy practice is futile and needs to be discarded with. Even traditional consulting projects can and do sometimes have positive effects for clients, but usually in a different way than intended or planned. Rather than transfer some kind of knowledge, consultant firm should cause (via the communication system) perturbations in client systems that trigger positive changes in its processes and structures, which otherwise might not have been achieved.

The prevalent trend and common thinking (by clients and consultants) is to attribute any success of a consultancy intervention to a consulting firm. This, as it should be noted from above, is misleading and factually wrong. All change, as also for humans, needs to come from within, whether triggered from without (consultancy intervention) or within.

There already exist “systemic consultants,” unsurprisingly mostly in German-speaking world, including Königswieser & Network and OSB international.  As can be seen from client testimonies of the former and project descriptions of the latter, the following activities are commonly practiced by systemic consultancy firms:

• organizational development and transformation
• restructuring and change management
• strategic assessment and revision
• systems diagnosis and analysis
• …etc..

Services above are not very different from what traditional consultancies offer. But, they shouldn’t be as an organization has a strategy and an objective, etc – nothing new under sun.

Three points that are different between traditional and systemic consultancy practices are:

1. Mutual ownership of the client’s project: traditional consultancies position themselves as experts in terms of knowledge/experience and usually have a more “dictatorial” and outsider approach of “what needs to be done,” whereas systemic consultants come in as an unbiased party that co-owns the client project, trying to add value with their tools/methodologies.
2. Social and psychological factors fully weighed: psychology of clients, their top management, framework of social interaction and cultural factors are all heavily considered; also subtleties related to message creation (by consultancy), communication and perception (by clients) are of paramount role as well as analysis of  (a perceived) problem and suggestion of possible solutions/improvements.
3. Education, assistance and support: in most cases, systemic consultants act as educators – this is usually in the face of traditional consultants who think that educating a client might diminish a future chance of being employed by that client; as apparent from many client testimonies, systemic consultants offer assistance and support in vital issues such as drafting organizational strategies or HR incentive systems, etc; systemic consultants also educate their own teams in the client context.

How admitting a failure can lead to success

Launched in the beginning of 2011 by Engineers Without Borders Canada, Toronto-based Admitting Failure is intended to be “a collaboration between like-minded NGOs, governments, donors and those in the private sector,” in the site’s own words.

Those involved with charitable development groups can visit the site to submit their own stories of plans gone wrong, or they can browse through the stories submitted by others, rating and commenting upon them along the way. Either way, failures are bound to be exposed and lessons learned.

But why admit to or even share with others a failure?

Failure and success are two sides of the same coin called life, be it a human life or that of an organization. Failure is as natural to humans as it is to organizations consisting of humans. Just like all humans are resistent to failing (and even more so to admitting it) so are human organizations.

Admiting failure enriches and brings one closer to success as formulating and clearly understanding a problem brings closer to its solution.

This is not just to make us feel self-satisfied or justified in front of our consciousness. It is as real as you’ll get. A recent article on HBR, for example, shows how Dominos Pizza – not just some small and insignificant company at that – after much public flogging, condemnation (lot of it online) had its CEO Patrick Doyle admit failure, and not just any failure, but the very essential point of having a rather inferior quality of pizza, on TV. This pain-point served it a good lesson, and Dominos quickly turned itself around and is again living its stellar time.

IBM did it back in 80s under Louis Gerstner Jr.

GE did it under Jack Welch in 90s..

Daimler and Ford did it in 70s and 80s…

A route to success, whether personal or in business, lies in admitting a problem, failure or pain-point.

Why not you or your company? Start anew by submitting your past failures, mistakes and pain-points.

Attitudes of failing companies and Sisyphus

I came across a nice article on Digital Tonto about how companies fail. I previously posted about why smart people and companies do dumb things, eventually ushering in failure. The article however shares some interesting insights and examples of how companies, even very successful ones, eventually commence their decline by following one of the below “attitudes”/approaches (comments are mine).

1. Overconfidence: mostly driven by past success and self-confidence.
2. Overvaluing Strategy and Undervaluing Process: companies that are obsessed by grand visions and strategies tend to underestimate the incremental changes and the process itself which are the drivers of success.
3. Looking for Dragons to Slay: this quality is typical of few very successful companies such as Google who, once at the summit of their success, look into going after other markets, products and companies.
4. Disruptive Competition: which might or might not bring value to end users.
5. The Lambda Response: instead of solving the problem at hand, it becomes more exacerbated by internal confusions, inefficiences and panick.

Some of those attitudes leading to failure are among the famous Ten Commandments for business failure of Mr. Coke.

The article offers a solution to embrace, a corporate equivalent of Sisyphus:

When company leaders are like Camus’ Sisyphus, they are most likely to be successful.  Companies who are focused at the task at hand, rather than building empires and seeking out the “Next Big Thing” are doing their shareholders the greatest service.  For a company to be profitable over the long term it has to perform and that can only happen if the organization is united in its purpose.

Constant focus on creating value for existing and potential customers, unity of purpose, corporate humbleness and perseverance are the generic vaccines for companies successful but not yet narcisstic or obsessed by self-grandeur.

Top 16 reasons of innovation failure

Is your company struggling with coming up and implementing innovative ideas?

Does innovation sound good for you but you still have to reap any tangible profit from those nice-looking, suggestive and “innovative” ideas that you hear from your employees, employers and read on Internet?

Do you think that innovation sounds good is but hard to capitalize on?

Before drawing any foregone conclusions and debunking anything dubbed innovative, please check whether your company’s approach to innovation is sound.

The seven deadly sins that choke out innovation in all sorts of companies and industries include:

1. Thinking the answer is in here, rather than out there
2. Talking about it rather than building it
3. Executing when there is need for exploring
4. Being smart
5. Being impatient for the wrong things
6. Confusing cross-functionality with diverse viewpoints
7. Believing process will save your company

These are common in both brainstorming, analysis and execution stages of implementing innovative ideas.  Additional reasons why (supposedly) innovative ideas might fail are:

1. Ideas don’t solve an important and relevant problem
2. Ideas take too long to get to market or needs shift
3. Ideas are poorly launched
4. Understand the adoption cycle or barriers

In my previous post, a recap on Umair Haque‘s article,  following strategic factors yield failure if present during implementing and managing innovation in your company:

1. Focusing on short-run numbers
2. Applying surface economics
3. Being strategy-blind
4. Failing to see the right context
5. Never having an ideal

Use this “innovation failure” checklist of factors to make sure your company is not trapped in or following one of the above factors.

Will Google fail… again?

If you work just for money, you’ll never make it, but if you love what you’re doing and you always put the customer first, success will be yours.

Ray Kroc, founder of McDonald’s said. Google founders loved their search engine. Today Google seems to love money more than anything.

Google Catalogs, Google Answers, Google Wave and even the most recent, hyped up Google Buzz feature on a growing list of Google flops, with, on average, 200 projects that are being worked upon at any time at Google.

A seeming common denominator of all its failed attempts is its chase of existing and successful business models or competitors. Google Wave was to reinvent email; Google Buzz was to be a direct response to Twitter; Google Answers was to counter Yahoo! Answers and so on.

Since 2001, Google embarked on acquisition of middle and small size companies, in its bid to enhance the range of its services both vertically and horizontally. More than 80 acquired companies and 10 years later, yet its strategy, approach and mentality have hardly changed.

In a certain sense, Google stopped innovating. Many of its failures could be somewhat explained away by looking at how it tries to go about chasing others’ success. An enlightening interview with a Google exec revealed some crucial points -  scope of work, team size and usage of infrastructure, etc. – of how Google cannot, for example, build an Instagr.am equivalent.

And now Groupon. Google’s unsuccessful story of trying to buy it for USD 6 billion did not finish there. It now decided to come up with its own answer. A déjà vu?

Of course, Google did and does good things. Adwords, Adsense, Analytics, Android and its transformation of online advertising using acquired DoubleClick technology, have done and will continue bringing value to businesses and end users.

But, is the value offered by Google justified by the growing number and impact of its flops?

It all boils down to a company’s DNA. Google’s DNA is search, and it built around it, growing and becoming successful. Now it tries to “go out” of its DNA and diversify, not an unusual drive for a company of its size and track record. It needs t keep in mind, however, that similar attitude brought down other big and successful companies in the past. Instead, what it could do is to make its own search smarter and richer (in relevancy, targetting and search result contents).

The usual question that Google and other failed/successful entrepreneurs/businesses ask themselves daily is, “Should we Innovate or Copy?” The word “Innovation” became a cliché, despite the fact that innovation wars lead nowhere and hurt everyone.

Perhaps it is time we start to mInnovate.

How companies fail in commonsense marketing

Beware of making five-year projections, unless you’re thinking of leaving the company after four years.

These words belong to the King of Manhattan, David Ogilvy. Perhaps what he meant is not to go without planning, but plan carefully, adjust consistenly and execute relentlessly, all of it driven by commonsense.

Commonsense indicates a certain approach to marketing: figure out your company’s goals, then decide on what and how (communication, advertising and contact) to market goods/services your company offers.  Drayton Bird’s book “Commonsense direct and digital marketing” puts it in the following order:

1. business mission (what do you want to achieve?)
2. business objectives (are your goals SMART?)
3. marketing aims (ex. get new customers)
4. marketing strategy (ex. how you will market)
5. communication objectives (ex. tell your existing customers about your new products)
6. communication strategy (ex. building up a new database of customers via limited offers)
7. advertising objectives (what do you want to achieve by advertising, a general, mass communication weapon?)
8. advertising strategy (via channels will you advertise – TV, online, print?)
9. creative strategy + media strategy (how will you convey your message? + which media and how much?)
10. contact strategy (points of communication between your company and your customers – when/how you will use selected media to reach out your target?)

You work your way from business mission, answering all relevant questions  to business objectives and so forth. Your end result, after going stage by stage, is a well-conceived and solid marketing plan.

Yet, as simple is this sequence looks, it is regularly and sometimes consistently violated/omitted/ignored. An impressive list of small, medium and big brand and product failures is a testimony to that. Financial and other consideration matter, but marketing represents a big chunk of and reason for failures both for new and existing products/services.

According to one research, fewer than 10% of all new products/services survive past the 3rd year, some of the reasons being wrong assessment of existing markets, insufficient awareness generated by advertising, and wrong target group. Even the largest (and most successful) direct-selling, person-to-person marketing company and manufacturer of health/beauty/homecare products, Amway, has not been immune (Amway’s China failure).

The recurring theme among the most famous product failures is also conspiciously featuring wrong pricing, erroneous market assessment, ambiguous positioning, unclear message and wrong naming.

The underlying logic (and its failure) is notably manifested in the online part of marketing planning and execution. Inappropriate channels, wrong targeting and poor execution are prominent in social media marketing failures.

To conclude, marketing planning and execution errors originate either while not following the inherent commonsense order of marketing mentality (in accordance to the list above) or in insufficient, erroneous, unclear research, planning and implementation of one or more stages of marketing.

Commonsense is indeed a sum-total of logical thinking, gut feeling and intuition. Unless we use commonsense in our marketing efforts, we will be a man Nietzsche had in mind when remarking:

To a man with a hammer everything looks like a nail.

Entrepreneurship is a journey – fail or endure

If we’d known we were going to make it, the challenge would not have been the same – we might have not gone. If we’d known what lay ahead, we certainly would not have gone.

The paragraph above typifies most entrepreneurial undertakings. It always starts with a bright idea, sense of uniqueness, and feeling of going to accomplish something important and doubtlessly rewarding.

However, the excerpt has little to do with business. It is an account of journey, the longest  at the time (1980-1982) from the Bronx Park (in Northern Winnipeg, Canada) to Belém (in Brasil, where Amazon meets the Atlantic) on canoe, spinning some 12,000 miles (20,000 km). Below is the final entry in the original diary (links are mine).

We have taken some 20 million paddle strokes to get here and have traveled every variety of waterway. We have slept on beaches, in jungles, in fields – sometimes in canoe, on the open water. We have shared simple food and lodgings with the Cuna Indians, the Guajiras, and the Miskitos; we have dined aboard million-dollar yachts. We have eaten shark, turtle, paca, tapir, wild pig, manioca, palm hearts, cactus. In Cartagena, we ate heaps of roasted ants.

We have encountered hundreds of species of creatures: snakes, crocodiles, piranhas, morays, sharks, whales, bees and scorpions. Strangely enough, the only animal that has given us any trouble was man; we have been arrested, shot at, robbed, jailed, and set upon by pirates. At one point we were led off at gunpoint to be executed.

We have been taken for spies and sabotoeurs, have capsized 15 times at sea and spent terrifying nights in pitch blackness riding the ocean breakers without navigation. We have had brushes with the drug trade, suffered food poisoning, blood poisoning, and dehydration. Forty-five times our canoe has been broken on rocks or reefs. Our skin has been baked to scab by the sun. We have been close to starvation.

This is reminiscent of journeys of so many of those leaving their mark in history of business, politics, arts – all human endeavor. Only the details differ, yet how many of those aspiring entrepreneurs have an idea of what awaits them alongside their journeys? How many would carry on having a foresight of future? How many would continue and endure? Not many. Yet at the end, winners always invariably stand alone:

In spite of all we’ve endured, our arrival here in Belém was anything but triumphal. No banners, no champagne, no tears or kisses. Nobody at all… Perhaps we deserve such a fate. We have come too far.

The book documenting this journey is called Paddle to the Amazon by Don Starkell.

Top 10 misconceptions associated with starting your business

Many aspiring entrepreneurs, without having previously started a business, already have a fixed set of conceptions about embarking on a new venture. The most wide-spread and misconceved of those are:

1. I need lot of money to start a business (many ways to start-up with no money or with a bit of bootstraping)
2. I will get rich soon (although some successful startup founders get rich and advise others how to get rich, it will require time till your business gets traction and starts making profit for itself and for you; brace yourself to get rich slowly, in the best of cases)
3. I need to have a well-conceived and thorough business plan (it is true that business plan is an important fact, but many consultancy and web  service providers started off without one)
4. I need a unique and great idea to build upon (it is far more important that the idea addresses an open need or delivers in a better, more efficient or more affordable manner that currently available on the market; Betamax vs. VHS story)
5. I am the boss and I know better (your employees, your customers, your shareholders, and most importantly, your competition will affect and have sawy on your decisions)
6. It will take lot of time till my business makes profit (while number crunching to project profit is useful, it is by no means sufficient; focus on customer needs and offering value is what will eventually bring profit; some take lot of time and other take a year or two)
7. I will have more time and freedom (nothing can be further from truth; this is your business and every idea, problem and solution – especially at the beginning stage – will have to go through you, worry you, make you sometimes anxious and other times happy)
8. I have this nice/cool product/service and will surely get customers/market share (Apple Newton, Motorola Iridium, and many of top dot-coms were built with this idealogy and resulted in failure)
9. I am the boss and I can pay myself as much as I want (while there is much debate about how much a founder’s salary must be, it is obvious that a founder needs to share love with employees if he expects their loyalty, devotion and passion in work)
10. I need to take a bold risk in order to succeed (was Bill Gates a risk taker? you rather need to be flexible and adopt to realities, solving problems as you go)

The misconceptions above (and any of their combinations) usher in a bad start, difficult and eventually unsustainable growth of businesses.

Why failure is the ONLY path to success

Failure. Success. What association do we have with each? Google search of the word “success” returns nearly 281 million results whereas that of “failure” 119 million. These are telling numbers and they seem to reveal the underlying “logic” of our lives. We are afraid of failures, whether they are in our personal lives and in our careers (whether changing a job/career or starting your own business).

Many are driven and inspired by success stories, recipes and recommendations of others. Success, even if it is not yours, feels good. It feels comfortable. Present and future, in that one instant, seem to become brighter and more rewarding. We live in that instant and want to stay in it.

Many are afraid of failure. We hide our failures. We try to forget them. We mostly attribute our failures to a bad luck, an out-of-control happenstance or an incident. Very few of us openly admit a failure, even less their part in it.

What we don’t necessarily know is that fear of failure destroys any chance for a possible success in future. What we also might not know is that failure breeds success.

Throughout our history, many a successful entrepreneurs, businessmen, politicians, scientists failed first before reaching success. Google returns about 672,000 search results for “failure quotes,” and each of those pages – this is a good example -  contains quotations and saying of those who made history.

I selected excerpts from some of modern (and currently very) successful entrepreneurs, businessmen and bloggers who tell of their failure stories and experiences.

Brazilian blogger Luciano Passuello, who is passionate about the world of our minds, thinks that failure “is the only way to go far enough”

Have you failed before? Was it as terrible as you had anticipated? Well, here you are reading this article, so it seems you survived all right. Truth is, failure is almost never as bad as we imagine. Fear of failure is usually much worse than failure itself.

Ryan Healy, dubbed “Most Referred Direct Response Copywriter on the Internet,” during his early youth, trying to grab on courses and lectures promising success and fortune,  admits

I was what they call a “hyper responder.” I’d buy just about anything that promised freedom and fortune. I bought programs about how to trade the commodities market (and I actually did that and made money); I bought programs on how to bet the horses; I even bought a program about how to become a “waste auditor.”

…

But as my drive intensified, I began to make larger investments.

I dropped $5,000 on a real estate investment course. I realized too late that I was uncomfortable using the techniques in the program; it was basically worthless to me.

And while that loss hurt, it didn’t hurt nearly as much as the next mistake I was about to make.

Yes, he made mistakes. We all do. But he came out of these mistakes and experiences a stronger person.

Ben Settle, an email marketing expert and web entrepreneur, thinks that

Because weird as it sounds, failure is a requirement for success.

And like it or not, without failure you can’t truly succeed, so avoiding it pretty much makes you dead in the water right out the gate.

…

I’ve met (and worked with) some serious “power players” in business. Not just on the Internet, but offline biz owners, too. I’m talking about people who sometimes make more scratch in a DAY than the average working stiff makes in 6 months toiling away for the corporate beast masters.

And you know what all these people have in common?

They started out as miserable FAILURES.

Last but not least, remember one thing. If you are failing or what you are doing is failing and things just seem plain bleak and without any perspective, then perhaps, it is time to give up what you are doing and start anew. Or perhaps, it is time to start doing something else.

As a serial entrepreneur and bestselling co-author of Trust Agents, Chris Brogan puts it

There is a right time to give up. There’s a right time to quit. The trick, and it is a HUGE trick, is knowing which is which.

adding that

Remember that surrender is every bit as much a part of strategy as victory. Learning when to surrender or lose a smaller battle has been part of the success plan of every major war ever fought. The trick is in knowing what really matters, and never letting go of that. The problem we have is that we fall into the trenches and think the battle is the war.

Failure. Success. Two sides of the same coin. One cannot exist without the other.

Embrace your failure and you will succeed.