The latest issue of Forbes (May 31, 2016) features Wall Street deal maker Stephen Schwarzman on the cover, where he is labeled “The Master”. The subheading is “Through turmoil and crisis, one man keeps winning.” Above his shoulder, it says,“Blackstone’s Stephen Schwarzman”. And, it also says, “Too Smart to Fail”.
As I see it, that phrase “too smart to fail” is indeed powerful. The phrase does far more than provide a reason for Schwarzman’s repeated wins. The phrase also encompasses an approach to winning that can be applied far more widely in business. By paying greater attention to what works and what doesn’t, and doing more of the former, businesses can move in the direction of being “too smart to fail”. Then, they, too, could experience more wins.
Striving for “too smart to fail” doesn’t necessarily eliminate all failure. But, it does entail developing the necessary know-how, whatever form that takes, to reduce much failure and to minimize, or better yet avoid, disastrous failure. And, if done effectively, it can contribute to more impressive success.
These days, it is especially refreshing to see a major business publication feature the phase “too smart to fail” in a position of prominence on its cover. Striving for “too smart to fail” is especially relevant today as more and more companies seem to be doing just the opposite by emphasizing or idolizing failure. Not only have these companies encouraged failure, but they have even been rewarding it. They do so with the intent of getting employees to try innovative new approaches that may or may not pan out, but otherwise might not be tried for fear of reprisal. Often, they encourage their people to “fail fast” and move on to the next attempt. Yet, as an undesired consequence, such an approach can easily breed numerous failures that occur merely for the sake of failing and that distract from moving forward toward greater achievement.
Some of what is considered failure might actually be learning. The distinction between learning and failure can often be blurred. But, learning is not failure. Learning can entail a series of steps taken to develop the increasing levels of proficiency needed to ultimately reach mastery. Going through those steps is not failure, even if the level of skill early in the process is far below what it will be once mastery is attained. Although learning can sometimes include failure and some failure can teach powerful lessons, learning should not be confused with failure. Learning can help develop the smarts associated with becoming “too smart to fail”. So, encouraging learning can be worthwhile.
Of course, sometimes failure is inevitable. So, even when failure is not encouraged, there will be circumstances that call for accepting failure, rather than punishing it. Even some of the most legendary business titans have had their spectacular track records of successes punctuated with failure. It is not unusual for these failures to occur during a move away from their traditional success system, since sticking with a successful approach can be a key to further success.
This comes into play for financier Stephen Schwarzman’s repeated success. The Forbes cover story credits Schwarzman with impressive investment returns over the last 30 years. And, in that Forbes story, Schwarzman explains that he consistently achieves such results because “we have a system that works.” It is beyond the scope of this newsletter to evaluate the investments made by funds like Schwarzman’s. But, according to Forbes, Schwarzman’s track record is impressive. And, as Forbes reports, Schwarzman has been able to innovate and to build success despite times of financial crisis.
I’ll add that being “too smart to fail” is an overall approach, essentially having a “system that works” as Schwarzman says. It is not necessarily about IQ or academic success. But, it does involve having a good grasp of what it takes to drive the business forward.
Furthermore, merely thinking that you or your company can’t fail is not enough. In fact, it can be a serious disadvantage to think you are “too smart to fail” when, in fact, you lack required expertise or a well developed system, especially if you aren’t even trying to obtain the needed, but missing ingredients. Companies often go downhill when they start believing their own press releases and perceiving themselves as too smart or too wonderful to fail when there’s no real bases for such thinking.
In conclusion, there is value in striving to be “too smart to fail”, which can come about via mechanisms such as understanding the factors that drive your business and having a systems that works. And, as Schwarzman’s situation illustrates, having a system can succeed even when innovating and when navigating crises. Although impressive success is never guaranteed, being “too smart to fail”, if done effectively, has the potential to pay off handsomely.
La Grange Park, IL