Velocity. Speed. Quickness. In speaking with customers, I’ve heard a lot about how critical speed is in maximizing efficiency, agility, and profitability. I’ve heard how having the ability to know sooner and act faster in relation to opportunities and risks can make life a whole lot easier when it comes to supply chain management. And it’s abundantly clear that it does. All of the articles I’ve read and the examples I’ve come across have been focused on using speed to propel you toward success. But what about using it to take you full steam ahead toward failure? To me it first seemed like a bit of a backward concept—until I learned to look at failure as just another form of victory in disguise. I went from asking myself why anyone would want to fail, to actually looking forward to my next mistake! And much to my surprise, what helped me come to this realization was hearing several prominent figures speaking about the failures they’ve experienced in their businesses and with their supply chains at the Gartner Supply Chain Executive Conference. Chris Tyas, Senior Vice President Global Head of Supply Chain from Nestle, gave a keynote on Supply Chain Innovation & Excellence: Engaging 36,000 Supply Chain Brains Across the World. While the focus was much more on crowdsourcing knowledge and ideas from within your own employee base, he did provide an example of supply chain failure. He mentioned the horse meat scandal from a few years ago, where several big businesses were found to have contaminated food products. Nestle originally came out saying there was no way they were involved—based on the fact their top tier suppliers weren’t implicated. Three days later, they had to retract that statement. A supplier much further along the chain, one they had no knowledge of, was using horsemeat in producing one of Nestle’s products. What Tyas learned from that mistake was the importance of end-to-end visibility. What I learned was the importance of discovering your mistakes quickly—and then taking ownership of them. As soon as Nestle uncovered the problem, they took immediate action to correct the issue, from a public relations standpoint and from the supply chain side. It motivated them to be more aware of what was happening across their entire supply network, and more open and transparent with their customers. Former CEO of Walmart Mike Duke explained in his keynote, From Supply Chain Executive to CEO: Leading the Largest Business in the World, the importance of celebrating mistakes, of building a company culture of risk takers who are willing to experiment, and of acting quickly when you realize those experiments aren’t working out. You have to fail quickly. And you have to fail with purpose. The example he gave was Walmart’s failed expansion into Germany. Duke said if he had to do it all over again, he would have pulled out of that market much sooner. Why? Because they knew it wasn’t working, they were hemorrhaging money, but decided to stick it out just a little longer anyways. He said he should have recognized the failure sooner and moved on. But Duke also shared a story of where failure led to incredible success. Before the rise of the Walmart Supercenter, they tried a different format, one based on the Mega Marts popular in Europe. They built several of these behemoths in the US with the intent of getting into the food business. Competitors said it couldn’t be done. Critics said they were crazy for even trying. The stores were a flop—and a very expensive one at that. Determined to try again, Walmart went back to the drawing board, and out of that initial failed experiment came the birth of the Supercenter, a model that has proven infinitely more successful and has allowed them to achieve their goal of entering the food industry. Duke noted they failed quickly, recognized that failure, learned from it, and moved forward in a modified direction. That is the key to failing successfully. When it comes to your business and your supply chain, it’s okay to take risks. It’s okay to experiment. That’s often what leads to the greatest breakthroughs. But you have to be setup for it. You have to design for failure. What I mean by that is you have to have a supply chain capable of recognizing those failures faster. You need to be agile enough to test, fail, and repeat. And that goes back to being able to know sooner and respond faster. The one other critical piece to failing with purpose, of risk taking in your supply chain, is not being afraid of the failure. Duke summed it up brilliantly in his presentation. The potential size and cost of a failed experiment can’t prevent you from trying it. Yes, in big business mistakes can be costly—Walmart learned that several times the hard way—but you have to look beyond. You have to look at the size of the success that could come from that one risk. Both Walmart and Nestle did, and when they moved full speed ahead toward failure, they realized incredible success.
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