By Koby Fleck
The two top executives at Intel some years ago, when their main business was making memory chips, were in a situation where their memory business was in ruins. As the story goes, these two gentlemen were preparing themselves for their imminent removal by the board, when one of the two gentlemen asked the other, “So if they fire us, and bring someone else in, what will be the first thing that our replacement will do?” The other replied without hesitation, “They will get us out of the memory business.” The other replied, “Why should we let the next guy do what we should do? Let’s walk out the door, come right back in, and get this company out of the memory business.” They decided to cut their losses by ending their commitment to an unprofitable business venture, and soon found new opportunities elsewhere. Today, they dominate the microprocessor market.
Expand Your Scope of Competence with Each Failure:
In our personal and professional lives, we can gain great advantages by cutting our losses early, learning from our losses, and taking steps to avoid the same mistakes in the future. If you are really trying to succeed in life or business, you will consistently make mistakes. The old bromide: “If you’re not failing, you’re not trying” has a great deal of merit.
With each failure we have an opportunity to expand our scope of competence. In Secrets of the Millionaire Mind, Harv Eker discusses how each problem or loss we deal with can expand our scope of competence; in fact, he says, “The bigger problems you can handle, the bigger business you can handle.” Part of that is losing, cutting our losses early, learning from our mistakes, and moving on quickly to the next opportunity or learning experience.
We Only Need A Few Big Wins:
Human nature seems to want to hang onto something that is failing in situations where we have a great deal of time, energy, money, or reputation invested. We want to win, not lose. However, to be winners in the long run, a significant part of our self worth cannot be tied to proving to ourselves, or others, that we are winners every time. Really, we only need a few big wins in life or business, and we can afford quite a few losses.
I was speaking with a product development executive at a well-known manufacturer some years ago. He explained the great number of products they introduced each year, and how very few hit big. Profitable companies have to determine what new products are losing in the marketplace and which ones are gaining momentum. They cut the ones that are losing early, and focus their remaining efforts on the ones that are building momentum. Even the famous Jack Welch demanded that the businesses in the GE portfolio were either number one or two in their respective industry or they were gone. We have to do the same thing in our personal and professional lives. What activities in your life are gaining momentum and which ones are losing? To be successful we have to let go of our losses, fast, and reach out for new opportunities.
I’ve learned that an education is very expensive, no matter how you obtain it – through a university or the “school of hard knocks”. So the point becomes, how do we learn to avoid loss in the first place? We have to use our education and our experience. You pay for your education, so use it. Cut your losses early, learn to avoid future losses, and look for your next opportunities.
Copyright 2005 Koby Fleck. All rights reserved.
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