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The True Cost of Failure


In the last blog, we talked about the fact that in Command and Control organizations, team members haven’t been fully educated about the why behind the processes in their companies via the EDGE Method, and because of that, they don’t fully understand the cost of failure.


There are three basic costs of failure: money, time, and reputation. The greatest cost of failure is reputation.


This isn’t to bring shame into the conversation–we just need to talk about how failure impacts your reputation so that you can focus on ways to strengthen and maintain it. When failure occurs, it impacts your personal reputation, those of your team members, and that of your business.


Money and time are the fruits of having protected your reputation–which means that the focus must be there. In Secrets of the Vine, Bruce Wilkinson explains that the “fruit” is never the purpose–it’s the result of the purpose. When God is in our life, and we’re connected to Him, the fruit of that is a result of our connection to Him. Focusing on the connection is what produces the fruit.


Identifying the Cost of Failure
  • Revenue — What is the cost or loss in revenue from the failure and what is the cost to redo or make it right?

  • Time — How much time did the process take initially, and then how much time was taken to make it right?

  • Reputation — What is the impact of the failure to the following reputations?

    • Company — What effect does the failure have on the company’s reputation and how long does it last? If it’s posted on social media it can last forever.

      • How does this impact investors and/or financial partners?

      • How does this impact future business partners?

    • Client — What is the impact of the failure on our clients’ reputation?

      • How does it impact how they see themselves? Do they feel responsible for making the decision to work with your company?

      • How does it impact how others see them? Do others blame them or lose trust in their decision-making?

    • Personal – What is the impact on relationships for the owner or the employee, both inside the company and with those outside the company?

      • External reputation of the owner or employee(s) involved in the failure? How long does it last?

      • Internal reputation of the owner or employee(s) involved in the failure? How long does it last? How do their co-workers and/or executives perceive them?

      • How does it impact how the owner or employee(s) feel about themselves? Does this failure create shame and fear?

We need to really understand the full effect of this longest-lasting and greatest cost of failure. The loss of reputation is one of our greatest fears, and needs to have processes to protect it. If there are established processes, even when there is failure, it doesn’t impact your reputation or cause shame.


 

The definition of insanity is doing something over and over again, expecting different results. We wear these labels of shame and expect success, over and over again. Only when we realize our true identities and let go of the labels that we want to protect or build us up, can we achieve different results.

 

Therefore, we feel safe about our reputation, our clients are protected, the company is protected, and our time is more efficient and more valuable. By protecting all of these things, the company will be compensated and achieve greater results. Protecting reputation is the foundation for a successful business, and ensures that it will be a Trust and Inspire Organization.


When you protect the reputation of the people you work with, you’re protecting them from the consequences of failure. Using the EDGE Method to fully educate people on the “why” behind what we do, the “how” to do it, and then teach them so they do it well, is the best way to protect reputation. An established process is the most efficient way to do that. You can focus on protecting your money, or protecting your time, but if you do that, you’re missing the larger picture. Thoroughly educating and training people is about protecting their reputation, and yours.


When I wrote Refined by Failure, in the last chapter I shared what could have been my greatest failure, the failure to trust that God could return my mess of a life to something beautiful. I almost took matters into my own hands and if I had, my failure would have had far-reaching consequences. My daughter wouldn’t exist. My wife Lora would be married to someone else. All the people in my life who love me would have grieved for the rest of their lives.


Unfortunately the Law of Compounding applies to failure and shame as well. Shame is so powerful that the very foundation of the saying, “hurting people hurt people,” is the perpetuation of hurt and shame. It is almost immeasurable, what that cost is. There are some who have been physically and sexually abused who become abusers themselves. One generation’s failure is perpetuated in the next, and the next. Poverty is an example of a perpetuation of the failure of believing people when you’re told you can’t, or settling, or an expectation that you’re less than. The less-than mindset leads to the devaluing of a human life.


So many of the behaviors we learn and actions we take are based on avoiding shame, or replicating the learned behaviors, which in this instance are bad behaviors. A great cost of failure is when it becomes part of your identity rather than a moment or an event in time that we learn from, when you fail to realize your true identity as a child of God and it’s replaced with whatever label of shame you decide to wear.


The definition of insanity is doing something over and over again, expecting different results. We wear these labels of shame and expect success, over and over again. Only when we realize our true identities and let go of the labels that we want to protect or build us up, can we achieve different results.


The cycle only stops when we own who we are, and realize the truth: there’s nothing more or less than being a child of God. Jimmy Evans said, “The devil knows our names, but calls us by our sins (shame). God knows our sins (shame), but calls us by our names.” Accepting our true identity is the transformation that brings us from the failure of Adam and Eve to living risen with Christ and as a redeemed child of God.

 

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