Don’t Punish Failure in Your Small Business, Reward It (Within Reason)

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In conjunction with the earlier post related to making a lot of mistakes quickly, you should not punish people (at least not severely) for “failure”.  Rather, you should encourage many small failures, which promote learning.  In fact, some would go as far as to say that you should reward small failures, since they are so critical to ultimate success.  I’m not sure if you are willing to reward failures in your enterprise, but you should certainly create a culture in which you and your employees feel comfortable taking risks.  As a good buddy of mine likes to say, “without risk, there is no reward”.  Creating such a culture often looks easy on paper, but proves very difficult in practice.  Given the controlling nature of most entrepreneurs and their perfectionist nature, most entrepreneurs and the people they surround themselves with don’t like to make mistakes.  It makes them feel powerless and inadequate.  These emotions must be overcome however, if you are to accelerate progress in your venture by encouraging small failures, which if used properly, can lead to more rapid success.

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Paul is a serial entrepreneur, strategic and risk management advisor, marketer, speaker and coach who has dedicated the majority of his career to entrepreneurship, leadership and peak performance. Paul has worked with various entrepreneurial companies in senior management roles and has led the development, review, and selective implementation of several hundred start-up and corporate venture business plans, financial models, and feasibility analyses. He has performed due diligence on and valuation of many potential investment and acquisition candidates. Paul was also the Director of a consulting operation in Wharton Entrepreneurial Programs and holds a Bachelor of Science degree in Economics and an MBA from the Wharton School of the University of Pennsylvania. Paul has lived, worked, learned and traveled extensively in Latin America, Europe, and Asia and speaks and writes English, Portuguese, and Spanish.

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