Failure | Sense is honed when you review decisions that missed the mark

Failure

Last time, I wrote about customers.

Click here for the previous article

Behind the numbers, there is always a customer.

Even if sales grow, you must look at whose dissatisfaction that revenue was born from.

Even if cancellations increase, you must look at where that resulted from a loss of perceived value.

If you proceed with your business without looking at the customer's wallet and their frustrations, the company will quietly drift off course, even if sales appear to be growing.

So, when do you notice that drift?

Ideally, you want to notice before it's too late. But in reality, you will sometimes miss the mark.

You misjudge. You misread. You are late. You cannot make a decision.

You go after revenue you shouldn't be pursuing. You delegate to people you shouldn't be delegating to. You fail to cut at the time you should be cutting. You continue initiatives that should be stopped.

In management and business, you cannot proceed without ever missing the mark. What matters is what happens after you miss.

Sense is not honed only by experiences where you hit the mark. It is honed when you review the decisions where you missed.

If you end with just reflection, nothing remains from failure

After failing, many people reflect.

I should have moved faster. I should have checked more. I should have looked at the front lines more. I should have listened to the customer's voice more. I should have looked at the numbers more. I should have been more assertive.

Of course, reflection is necessary. But reflection alone cannot be used for the next step.

"I was naive at that time." "I didn't see it at that time." "My judgment was slow at that time."

If you end it here, it just becomes regret.

Regret is heavy. But it doesn't serve as a basis for decision-making.

What matters is identifying what you overlooked.

Which numbers were you not looking at?
Which customer reactions did you take lightly?
Which feelings of unease in meetings did you brush aside?
Which ambiguities in responsibility did you leave unaddressed?
Which assumptions did you trust too much?
At what point had the misalignment already begun?

Only by reviewing this far can failure be used for the next decision.

Failure does not automatically become experience.
It only becomes experience when you break it down.

There are always signs that should have been visible in decisions that missed the mark.

When you look back after a failure, there are usually signs.

At the time, they looked small.
I was too busy and let them slide.
I thought it wasn't a big problem.
I judged that it was still okay.
I thought someone else would pick it up.
I thought I would check it at the next meeting.

But looking back, you realize that the signs were there.

Customer reactions had become lukewarm.
Sales had accepted orders under impossible conditions.
Dissenting opinions had stopped appearing in meetings.
Chat responses had become slower.
The manager was avoiding making decisions.
The frequency of the team saying "it's fine" had increased.
The numbers were being met, but gross profit was falling.
Sales were growing, but there was no cash left.

Failure seems to happen suddenly.
But in many cases, the misalignment was already present beforehand.

The problem is how you, at the time, interpreted that misalignment.

Did you think it was temporary?
Did you think it could be absorbed by the team's hard work?
Did you think it was fine because the numbers were good?
Did you take the customer's words at face value?
Did you think it would be solved by bringing in talented people?
Did you think it could be managed by increasing the number of meetings?

Reviewing a failure is not about looking at the result that occurred.
It is about looking at what you overlooked before the result appeared.

--

Success experiences can sometimes be more dangerous than failure

Failure is painful.
But, in fact, success experiences can sometimes be more dangerous.

This is because success experiences make us see ourselves in a biased way.

Sales grew.
Customers increased.
We were able to hire.
We were able to raise funds.
A new business was launched.
We landed a major client.
The policy was approved in the meeting.

When things go well, people tend to attribute the reasons to themselves.

Our strategy was good.
Our sales ability was strong.
The product resonated.
The organization became stronger.
We read the market well.
My judgment was correct.

Of course, that is sometimes truly the case.
But success also contains elements of chance.

Perhaps the market was just growing.
Perhaps the competition was just weak.
Perhaps the customer just had extra budget.
Perhaps the timing was just good.
Perhaps the staff just pushed themselves to absorb the impact.
Perhaps we only landed it because we sold it cheaply.
Perhaps we were just relying on a few talented individuals.

If you don't look at this, you will miss the mark on the same decision next time.

Trying to replicate a success experience exactly as it was can sometimes destroy a company.

Because it went well last time, we do the same thing this time.
Because we hired last time, we increase hiring this time.
Because it sold last time, we sell to the same customer segment this time.
Because it grew last time, we chase the same KPIs this time.
Because we survived last time, we think the staff can absorb it again.
But the context has changed.

People who cannot doubt their success experiences will make poor judgments after succeeding.

People with good sense break down not only their failures but also their successes.

Why did it go well?
What can be replicated?
What was just a coincidence?
Which premises, if changed, would make this no longer work?

They look that far ahead.

--

When you make failure a people problem, you lose sight of the structure.

When we fail, we want to place the cause on people.

The person in charge was weak.
The manager wasn't watching.
The sales team was soft.
The staff didn't move.
The administrative department didn't stop it.
Management didn't make a decision.

Of course, there are times when it is a people problem.
But if you dismiss it as a people problem too quickly, you lose sight of the structure.

It may not be that the person in charge was weak, but that they were not given the criteria for judgment.

It may not be that the manager wasn't watching, but that the metrics to be monitored were not designed.

It may not be that the sales team was soft, but that the criteria for accepting orders were ambiguous.

It may not be that the front line didn't act, but that decisions and execution were not connected.

It may not be that the administrative department didn't stop it, but that they lacked the authority to do so.

It may not be that management didn't decide, but that the structure for escalating decision-making materials was not in place.

Blaming people ends the conversation quickly. But it does not prevent recurrence.

If you leave the same structure in place, the same failure will happen with someone else.

When reviewing a failure, look at the structure first, rather than blaming people.

It is not about who was at fault. It is about why the structure was set up in a way that led that person to act that way.

Unless you look that far, the next decision will not change.

--

Review decisions that missed the mark by going back to the premises at that time.

What is important when reviewing a failure is to go back to the premises at that time. If you only look at the results, you can say anything.

We shouldn't have entered that market. We shouldn't have taken on that client. We shouldn't have entrusted it to that person. We should have stopped that initiative. We should have raised prices at that timing. We should have changed that meeting structure.

It is easy to say these things in hindsight. But to create criteria for judgment, you must look at what you were seeing, what you believed, and what you overlooked at the time.

What numbers were you looking at back then? Which customer feedback did you believe? What market assumptions were you making? What organizational structure did you think could execute it? Which risks did you judge to be small? Which gut feelings did you brush aside? Which options did you fail to discard?

Go back this far.

Failure looks obvious when viewed from the perspective of the result.

However, it was not obvious at the time.

That is precisely why you need to review the decision-making factors from that time.

Reviewing a decision that missed the mark is not about blaming yourself.

It is about confirming what information you had, what assumptions you made, and where you went wrong at that time.

If you don't do that, you will miss the mark in the same place next time.

--

Failures involving misjudging the customer are quite common.

Many business failures involve misjudging the customer.

The customer said they wanted it.
[[phN_open]]Therefore, I made it.[[phN_close]]

The customer said they would consider it.
[[phN_open]]Therefore, I thought it was a prospect.[[phN_close]]

The customer reacted to the price.
[[phN_open]]Therefore, I thought it would sell if I lowered it.[[phN_close]]

The customer made a request.
[[phN_open]]Therefore, I thought adding the feature would ensure retention.[[phN_close]]

However, in reality, things are sometimes different.

They just said they wanted it, but there was no reason for them to pay.
They just said they would consider it, but the priority was low.
They said the price was high, but in reality, the value had not been communicated.
There was a feature request, but the reason for cancellation lay elsewhere.

Listening to the customer's words is important.
But if you believe their words exactly as they are, you will miss the mark.

It is not about what the customer said.
It is about why they said it.

What was the customer struggling with?
What reason did they have to pay money?
Who makes the decision?
How do they explain it internally?
What is troublesome after implementation?
Why won't they buy it now?
Why won't they continue?

You have to look that far.

A failure in misjudging a customer is painful.
But if you can break down that failure, the accuracy of how you view customers next time will improve.

If you keep that, it becomes a standard for judgment.

--

A failure in misjudging numbers also becomes a standard for judgment

There are also many failures in misjudging numbers.

I thought it was fine because sales were growing.
But gross profit was falling.

I thought there was no problem because we were making a profit.
But cash was decreasing.

I was relieved because the churn rate was low.
But the customer usage frequency was dropping.

I thought sales were going well because the number of business meetings was increasing.
But the order conversion rate and unit price were falling.

I thought the organization was getting stronger because the number of hires was increasing.
But the management structure was not keeping up.

I was looking at the numbers.
But I was looking at the wrong numbers.

I wasn't looking at the numbers side-by-side.
I wasn't comparing them against the atmosphere on the ground.
I wasn't looking at the distortions hidden in the averages.
I wasn't looking at the gap between the P&L and cash.

These kinds of failures are extremely valuable.
Because they change the numbers you should look at next.

Look not just at sales, but at gross profit.
Look not just at profit, but at cash.
Look not just at the number of business meetings, but at the order conversion rate and unit price.
Look not just at the number of hires, but at retention and responsibility design.
Look not just at the number of meetings, but at the number of decisions and execution rates.

A failure in misjudging numbers changes how you look at numbers next time.
If you review things to that extent, the failure will not be in vain.

A failure in misjudging an organization takes effect later

Organizational failures do not appear on the surface immediately.
That is why they are scary.

I hired talented people.
I gave them titles.
I included them in meetings.
I gave them targets.
I thought I was delegating.

But,
after a while, things fall apart.
Responsibilities become ambiguous.
Gaps emerge with existing members.
Meetings increase.
Decisions slow down.
The team becomes dependent.
Managers avoid making decisions.
Expectations don't align, and people start leaving.

At this point, it looks like a people problem.
But in reality, it is often a design problem.

If you bring people in while this remains ambiguous, even talented people won't function well.

A failure caused by misjudging the organization will have consequences later.
And it hurts quite a bit.
But if you break it down, it changes how you view people and organizations next time.

If you can structure organizational failures, they become strong criteria for future judgment.

--

Companies that hide failures do not hone their sense.

To review failures, you need to bring them out into the open.
But in many companies, failures are hidden.

If you report a failure, you get blamed.
Reporting becomes a hassle.
Raising issues lowers your evaluation.
You are held responsible.
You stop being entrusted with things in the future.

When that atmosphere exists, failures stop coming to the surface.

The team polishes their reports.
They delay bad news.
They blur the real reasons.
They attribute causes to external factors.
They only provide safe explanations in meetings.

When that happens, the company cannot learn.

To learn from failure, you must visualize it before blaming anyone for it.

What happened?
Which assumption was wrong?
Which decision was delayed?
Which gut feeling was ignored?
What will you change next time?

You need a state where this can be discussed.

Of course, that doesn't mean responsibility should be ambiguous.
However, in companies where only accountability is emphasized, failures will be hidden.

In companies where failures are hidden, criteria for judgment are not accumulated.
In companies where criteria for judgment are not accumulated, the same failures are repeated.

Sense is not something that is honed only within an individual.

It is also honed by how a company handles failure.

--

Failure only has meaning when it is turned into the next course of action

Reflecting on failure is not enough.
It is meaningless unless you turn it into your next move.

If you misjudged a customer, change the items you confirm during sales meetings.

Identify the reasons for not buying.
Confirm the decision-maker early on.
Estimate the implementation burden.
Track the reasons for continuation.

If you misjudged the numbers, change the metrics you look at.

Look at gross profit, not just sales.
Look at cash flow, not just the P&L.
Look at individual customers, not just averages.
Look at the quality of actions, not just KPIs.

If you misjudged the organization, change how you delegate.

Clarify roles.
Define the scope of responsibility.
Delegate authority.
Create a feedback mechanism.
Change the meeting structure.

If a meeting went nowhere, change the design of the meeting.

Decide what the meeting is meant to decide.
Clarify who the decision-maker is.
Reduce items taken away for later.
Decide on changes to be made by the next time.

Failure only has meaning when it is turned into the next movement.

It does not end with reflection.
It does not end with an apology.
It does not end with a review.

What will you change?
Decide up to that point.

Business sense is not honed by the amount of failure.
It is honed by the amount of failure you turn into your next decision.

--

Standards you can use tomorrow

When reviewing a failure, it is better not to let it end with just emotions.

There are five things you should look at.

The first is the assumptions at the time.

What did you believe?
What market assumptions were you operating under?
What customer profile were you envisioning?
What data were you looking at?
What organizational structure did you think would make execution possible?

Go back to the assumptions you held at the time.

The second is the sense of unease you overlooked.

Which numbers were off?
Which customer reactions had changed?
Which meetings were spinning their wheels?
Which feedback from the field did you ignore?
Which silences did you mistake for stability?

Look at the signs that appeared before the results came in.

The third is whether you are ending the cause by blaming people.

Are you making it the person in charge's problem?
Are you making it the manager's problem?
Are you making it the sales team's problem?
Are you making it the field team's problem?

Look at whether the structure was set up in a way that caused that person to act that way.

The fourth is what to look at next.

Which numbers will you look at next time?
Which customer reactions will you watch?
Which changes in meetings will you observe?
Which responsibility designs will you look at?
Which assumptions will you question?

Create your next observation items from the failure.

The fifth is what to change next.

Will you change the KPIs?
Will you change the order acceptance criteria?
Will you change the customer verification process?
Will you change the meeting structure?
Will you change the scope of responsibility?
Will you decide what to stop doing?

Turn reflection into your next move.

The value of a failure changes based on how you review it, rather than the event itself.

If you end it with emotions, it becomes regret.
If you end it by blaming others, it will recur.
If you look at the structure, it becomes a decision-making criterion.
If you turn it into your next move, it becomes experience.

Sense does not reside in those who never miss.
It remains within those who review the decisions that missed the mark and transform them into something usable next time.

What do you look at to move again after a failure?
I wrote about that mindset in a previous article here.

"TRIP | Practical methods to move again after a failure"

Business sense is not honed by success stories alone.

When you review a decision that missed the mark, identify what you overlooked, and decide what to change next, it remains as a decision-making criterion.

Next time, in the final installment, I will write about "judgment."

What remains at the end is not the power to choose, but the resolve to discard.

If this theme resonated with you even a little, I would be happy if you could like or follow.

Next time, I will conclude by summarizing how to turn business sense into decision-making.