Job Capital founder Jo Burston has a simple business philosophy – fail often, fail fast.
It’s surprising hearing that come from someone who runs a fast-growing payroll services, migration, salary packaging and contract-management business that had $25.4 million revenue in 2010-11 and expects to top $40 million in 2011-12. But failure, says Burston, is a great teacher.
“Otherwise I would learn nothing,’’ she says. “I don’t have a fear of failure. I have no fear of that whatsoever.”
Burston is in good company. One of the world’s leading management thinker, Tom Peters, has a similar view. He has two mottos: “Test fast, fail fast, adjust fast” and “Life is pretty simple. You do some stuff. Most fails. Some works. You do more of what works. If it works big, others quickly copy it. Then you do something else. The trick is the doing something else”.
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Burston lives and breathes that philosophy.
Under her maxim, it’s impossible to understand the customer’s needs completely without having failed. “You must fail many, many times to get to exactly the product that is niche, that’s customer centric, that is scalable and has a unique selling proposition,” Burston says.
In addition to Job Capital, Burston has four businesses in various stages of growth.
“In the businesses I have, I learned to fail quickly. Whenever we build anything, we always get to a base model before we then go to the market and test fail and look at the value proposition of it, and then look at the multiple of the value proposition to the consumer.”
“If it doesn’t look like it’s going to work, I’ve failed. I am happy to fail to work out what I need to do to be successful. I have worked that out by failing many times on delivery, by failing many times on not getting the customer focus correct.”
She cites one of her businesses as an example: claimyourtax.com, an online tax return service for Australia, Britain and Ireland.
“That’s in its seventh iteration now,’’ she says.
“I thought there had to be a certain business process. Once it was in practice, I realised I didn’t need all those steps, I could pare it back down to eight steps instead of 10 steps.”
“Or we had a situation where we were gathering information about the candidate at the wrong pace. So we were making too many barriers to entry for someone to provide us with an email address and their phone number.”
“By working out what the customer wants and then taking it to the customer and the customer telling you by way of using it that it’s not practical or efficient, to me that’s failing. What that does is it makes me go back and change that process.”
The key is to do it quickly, she says. “I could easily make 100 decisions a day and I am happy to make 99 bad ones because I know I can change them very quickly and I’ll make a new decision,’’ she says.
“When I say failing fast, that’s about not sitting around and beating a dead horse or not trying to build something you think everyone else wants but you haven’t really found out whether they want it or not. To me that’s a massive long failure.”
Some businesses have not picked that up, she says. They avoid failure and because of that, there is no improvement or connection with the customer.
“A lot of companies go to market with a product or service that they believe the customer wants without having tested it at all,’’ she says. “Companies will try and force the consumer to go their way, versus changing it to be customer centric.”
As part of this strategy, she builds businesses that are flexible and scalable. It is smarter, she says, to start small, learn all about the customer and build from there. That’s even when the entrepreneur is convinced they are onto something that will change the world.
“I don’t build the Rolls Royce, what I need is the Toyota to get to the shops,’’ she says. “I always start with a Toyota and build on that … to get to exactly the product that is niche, that’s customer centric, that is scalable and has a unique selling proposition.”
“I wouldn’t spend a lot of money building a super-duper website unless I have gone through that process of failing.”
It’s a lesson for entrepreneurs planning to roll out a business based on a brilliant idea.
“If I came up with the next greatest idea and it is massive and I think it’s going to take over the world, how foolish would I be to go ahead and spend 200 grand to build an online platform just because I think it’s a great idea?”
“Wouldn’t it make more sense for me to start at a much smaller scale, a tiny piece and understand what the market wants and what consumers want to pay and then build from there?”
Much of Burston’s perspective comes down to her personality. “I am pretty positive by nature anyway,’’ she says. “If something really does happen that’s bad, I do try to find an upside to it. I don’t tend to sit in a dark place for more than a few minutes.”
Burston’s staff also have to embrace failure; if they don’t, they won’t keep their job.
“If somebody makes a big boo boo and stuffs up and fails and then they are down on themselves and they make a big thing about it and it takes them weeks to get over it, I don’t want that person in my business,’’ she says.
“But if they make a big mistake and they say: ‘You know what I really stuffed up here, what I have learned out of this is X, Y and Z. Instead of doing that, I am going to do this. I am going to execute on it and deliver’, what a brilliant person to have in my business.”
Burston believes this is the best way to get a creative contribution to a business process or to the outcome of a service or product.
“It’s about enabling them to think freely and to suggest and have ideas freely and exercise those ideas in practice and see what works,” she says. “If I don’t let my people fail, then how do I know what their capability is? And how will I ever know what their boundaries are and how will I ever know what the possibility is from that person or how far I can extend them?”
That means careful recruiting, Burston has found. Not everyone is prepared to fail and to enthuse about it, talk about it and learn from it.
“I hire very intelligent people who are A players in the game.”
Has she spent time consoling someone who has failed and who feels everything has fallen apart?
“I have in the past but I have pretty low tolerance of it now to be honest,’’ she says. “It’s a company culture as well. It’s a culture of everyone in the business knows they are allowed to fail and everyone knows that if you do fail at the same thing twice, you’re a bit of an idiot.”
“Maybe someone has lost a huge deal for some particular reason, it’s lost. You either pick yourself up and brush yourself off and get on to the next thing or you sit in a pool of negativity and stay there.”
It’s the kind of philosophy you’re more likely to find in a scrappy start-up with nothing to lose; an incumbent business with an established clientele and infrastructure might be more defensive and less likely to tolerate failure.
But Burston says all businesses, including large incumbents, need to be failure-friendly in order to innovate.
“Innovating your business to retain your market position is not defensive,’’ she says. “No business that I can think of has ever not evolved and changed. There has to be change as the market changes, as technology changes, as the world becomes smaller.”
This article first appeared on LeadingCompany.