The European Business Review - July-August 2019

50 The European Business Review July - August 2019

For all the enormous success and power of

Alphabet – 2018 annual revenues of $136.8

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employees – what is intriguing is its appetite for

making what the Google founders have labelled

“smaller bets in areas that might seem very spec-

ulative or even strange when compared to our

current businesses”.

Central to Alphabet’s success is its implicit

acceptance that failure is a fact of life. Failure, after

all, is a daily occurrence. Bright ideas crash and burn;

strategies hit the ground and stay there; and change

programmes run into the organisational buffers.

Not surprisingly, a full 90 percent of respondents

to a 2017 global survey of 500 senior executives

from companies with annual revenues of over $1

billion, conducted by the Economist Intelligence

Unit, admitted that they failed to reach all of their

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From transformation programmes which don’t

achieve change to mergers and acquisitions which

do not add value, failure is inescapable.

FACTS OF LIFE

For entrepreneurs in particular, the perils of failure

are writ large and constant. Research by Shikhar

Ghosh of Harvard Business School found that

75 percent of venture-based start-ups fail.^3 And

failure is also a frequent experience in larger organ-

isations. Size and scale do not insulate individuals

or organisations from failure. Business history is

For all organisations and managers failure is

a recurring reality. But despite failure being

all pervasive, few individuals or organisations

respond positively. Making failure work

productively requires managers to recognise

that plans need to be adaptable; failure must be

built into the culture and everyone attuned to

fail fast, adapt and learn.

“W

e’ve long believed that over

time organisations tend to get

comfortable doing the same thing,

just making incremental changes. But in the

technology industry, where revolutionary ideas

drive the next big growth areas, you need to be a

bit uncomfortable to stay relevant,” noted Larry

Page on setting up Alphabet as a collection of

companies including Google and a host of others

• from Calico to Waymo.^1
  Alphabet companies are a constantly moving
  portfolio of impressive, wild and brilliant ideas
  at varying stages of development. The social
  networking software company Dodgeball was part
  of the Google ecosystem. Acquired in 2005, it
  closed down in 2009. Others have had a stuttering
  existence. Google Glass was publicly launched in
  2014 and then returned to development before
  re-surfacing as the Google Glass Enterprise
  Edition in 2017. And others appear set to make an
  impact: such as DeepMind which was acquired by
  Google in 2014 and is a leader in AI research.

Transformation

BY RICARDO VIANA VARGAS, EDIVANDRO CARLOS CONFORTO,

AND TAHIROU ASSANE OUMAROU

MAKING FAILURE WORK