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Sometimes You Need to Make Mistakes to Be Successful

I read an article in The New York Times in which Mark Zuckerberg of Facebook fame is quoted as saying, “If you’re successful, most of the things you’ve done were wrong. What ends up mattering is the stuff you get right.” I’ve noticed in the past few years that the hallmark of many successful people is that they are willing to give things a try. After all, how can you be successful if you don’t try? And if they fail, they own up to their mistakes and try again.

With technology changing at warp speed, companies can’t help but evolve in response. Facebook is no exception. Even though some Facebook changes have garnered criticism, for privacy or usability issues, the company is not afraid of moving forward and trying something new. The most recent challenge for them is a potential change to the ‘like’ button. Many people will click ‘like’ to acknowledge that they have seen a post and are supportive. But how do you ‘like’ a post about something serious or negative, like someone breaking their arm? You might want to let the person know that you're thinking of them, but "like" just isn't the right sentiment. Conversely, having a ‘dislike’ button has the potential for hurting someone’s feelings. Facebook will need to come up with another type of button or way to communicate, which could be quite a challenge.    

Another example that comes to mind is the evolution of Netflix. The company began its life providing rental movies via DVD in the mail. But as technology evolved, a good portion of their business changed to online streaming as the delivery method. For a while, their membership included both streaming and DVDs in their monthly price, whether or not the subscriber used both services. In order to give customers only what they wanted, Netflix decided to split the two service types into completely different companies, each with their own website and branding. There was consumer backlash on many levels, ranging from usability issues to management concerns. The stock price fell, and shortly thereafter Netflix changed their mind and decided to stay as one company. While the split may have made sense from a business perspective (see my recent blog on companies who are making the split), it clearly was unsettling to consumers and investors.

All businesses face challenges, in one form or another, and the decision to try something new to answer those challenges must be made. Even though we hope all of our decisions will result in a positive outcome, the bottom line is that some mistakes will be made along the way. It’s how those failures are handled that people will remember the most. A well-managed mistake can actually build respect and have a positive impact on a company’s reputation.

Marc Fogarty, Audit Partner and a member of EisnerAmper's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.

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