Why Facing Failure is Crucial
by Tony Goodwin
Staring failure in the eyes is something all entrepreneurs face. When the dotcom bubble burst in 2000, my business went through tumultuous change. Fifty per cent of my business was in tech recruitment and to give you a flavour, we had been billing IBM more than $1m a year; that swiftly shrank to $57k. Dealing with the fallout was the toughest thing I’ve had to do in business.
I think it’s incredibly important to think about potential failure, not to be morose, but simply so you can try to avoid it. Because my company Antal had had eight good years and I hadn’t known or even thought about tough times before, I handled the dotcom bubble bursting quite badly. I didn’t cut deeply enough or well enough. I had 22 offices at the time and closed three. In retrospect I should have shut more more quickly and let go of more people. Cut deeper and cut better. In the end I was forced to make second and third round cuts, which just prolonged the agony. When the dotcom dust finally settled I had 11 offices.
Probably the toughest part of it all was the emotional toll it took. Building a business – particularly a service business – is tough. Getting rid of people – especially people who have become friends – is extremely difficult. So I didn’t handle the crisis very well personally. I took it badly because it was my business, my baby. Maybe professional CEOs aren’t emotional about their work but entrepreneurs tend to be totally wrapped up in their businesses. So making cuts isn’t easy for us.
However, the way you cope with bad times and what you learn from them is what defines you. And what I learnt from my own personal crisis is that you have to take action sooner, not later. You must be decisive. You’re paid to make decisions. They might be wrong but you’ve still got to make them, even if they seem like a backward step at the time.
I also learnt that if people aren’t working out, you have to let them go. Quickly. There’s no point thinking they’ll come round. They won’t.
Tony Goodwin is founder and CEO of global recruitment company, Antal International.