Opinion

Personal views from University of Bath researchers on the news of the day

Understanding business failure

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📥  Innovation & Entrepreneurship

Series 10 of The Apprentice is now done and dusted. Only one boardroom hopeful made it of course. The others failed publicly and to great embarrassment. Opportunity lies in their exposure, and you’d hope they’d weighed up the risks. But what for the individuals who’ve risked it for real? In this blog, Prize Fellow in Entrepreneurship from our School of Management, Dr Orla Byrne, explores what entrepreneurial failure really means in pratice.

Dr Orla Byrne on business failure

At the end of the latest series of The Apprentice, Dr Orla Byrne from our School of Management reflects on what business failure on entrepreneurship in the real world.

Outside of reality TV, there is no fun side to people getting fired. It’s not something we talk about readily, much like the failure of a business. It still carries a stigma that means most suffer in silence.

There’s a common conception that failure is part of the entrepreneurial journey. The idea prevails that those who are truly entrepreneurial can overcome crises and challenges.

Human empathy for those going through the collapse of a business is often replaced by finger pointing and blame. We only really accept failure in entrepreneurship and business as being useful to future endeavours, and it’s only typically spoken of as a stepping stone to greater success.

Very few entrepreneurs speak publicly at the time they’re going through it. Research supports the popular opinion that there is greater learning potential from failures than successes, but there are so many barriers to this actually happening.

Learning typically requires reflection and time to absorb what has happened. For entrepreneurs who are experiencing failure in real time it’s not always easy to do. They may not want to dwell on something that hasn’t worked out, preferring to move on and try to forget about it. It might simply be too painful, embarrassing or frustrating to think about, or difficult to comprehend. Sometimes they might have acted in ways that they don’t want to reflect on or admit to. Or quite simply survival might be all they can focus on.

For all these reasons and more we have little evidence of how people cope with failure and how some recover and restart in business.

My interest lies in the real time experiences of entrepreneurs who face failure. How do they make sense of what they are going through? We’ve found that while there is value in moving on, it is important to process what happened and that people separate the positives from the negatives in their experience of failure. Often people have a lot to celebrate, even when their project didn’t work out – be it the idea itself, the money that was made, the jobs it provided.

Deciding entrepreneurship is not for them is as valuable as starting a new business. The experience is not wasted and learning from the event can still be applied to future careers.

As entrepreneurship is widely taught in schools, colleges and universities, it’s important that curricula start addressing the issue of failure more. Talking about it would be a start but it’s also important to teach how to bounce back from failure. Otherwise our entrepreneurs of the future will have little idea what to expect and no insight into recovery.

At least The Apprentice brings failure out of the shadows – it can be the start of success - Read Orla's extended piece for The Conversation.

Listen to Orla on BBC Bristol Breakfast on Monday 22 December 2014.

Take a look at this Special Interest Group in Business Failure, set up by Orla on LinkedIn, to discuss and share ideas and information on the challenges, setbacks and failures in the entrepreneurial process.

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