Ebusiness Despatches: Leading and learning from failure

I recently spent an interesting evening as a guest after dinner speaker for CSC Research Services. The audience - a bunch of senior IT executives. I gave a talk about leadership versus management in UK Plc. It was fascinating, with lots of discussion and strong views.

What surprised me was the number of guests living in leadership denial. Very smart people, but perhaps lifetime managers - incremental improvement only, and the rich desire to measure anything and everything as a means of justifying their worth. WAKE UP! There is only one measure of note: how you are affecting the profitability of your organisation. If that cannot be answered, all the rest is noise. We must not set ourselves apart from the rest of the business.

One of the guests was Alan Murphy, IT director of the Financial Times. He had some very brave and interesting things to say about leadership, and how he views his challenges at the FT. Inspirational and heady stuff. The courage he spoke about I would like to see replicated across the industry. Now we need to get him in front of a silicon.com camera. A Voodoo man if I have ever seen one!

Did some punditry with the BBC last week. Having commented on M&S in my book, Corporate Voodoo, I was asked to comment on their recent results. The Beeb tried in vain to get someone from the 'Green and Gold' bunker to appear on the programme. No chance.

I also wrote some less than flattering pieces on BT in my book. Instructively, I was invited by the president of BT Ignite to share my views with his management teams in Paris.

This was both brave and insightful. I had a tremendous morning with them. They have the bit between their teeth and are up for change. The new leadership is creating dust clouds. Very impressive. Where there is vision, there is hope. Come on M&S - get out of that bunker!

Webvan bites the expensive dust, going through $1.2bn. Lest we forget, if there is not a sustainable difference between cost and price, you really do not have a business, no matter how good your marketing.

We are still experiencing a dangerous dot-com phenomenon. Failed businesses are not failing fast enough. More importantly, they are not open about their failures.

This is not the case in the US. Business failure there is seen as a necessary part of learning and subsequent success. American entrepreneurs tend to see their personal standing rise after a business failure, provided of course they learn from their mistakes. A failure is more a Purple Heart. It certainly is not stigmatised the way it is here.

British entrepreneurs live in terror of business failure. They have no legal protection like Chapter 11 in the States, where failing businesses can continue trading while endeavouring to pay off creditors. They have to face the spectre of potentially being struck off as directors. They may even face criminal proceedings for trading while insolvent.

Far more unforgiving is the stigma associated with failure. We've all heard stories of businessmen sitting in the park all day with their briefcases, despite having been made redundant or seen their business fail. Suicide figures for failed businessman are still alarmingly high.

This is not healthy. The real issue for dot-coms and their stakeholders is the lack of lessons learnt in the public domain. Many in the rising tide of dot-com failures are replicating the mistakes of the previous 12 months. The UK's failure syndrome is leading to a worrying lack of openness about shortcomings. In the US, by contrast, businessmen openly talk about where they went wrong, and how they could have handled it differently.

The real issue for UK.com is that this atmosphere is leading to dot-coms only owning up to failure when their funding has run out, NOT when the obvious signs of a failing business are there for any experienced management team to see.

It is important for businesses not just to revert to the traditional business measures of success - positive cash flow, top line growth, profits and a healthy order book - but to voluntarily close down a fundamentally flawed business NO MATTER how much of their investors' cash they have left.

Finally, I was up in Scotland working with some fabulous technology start-ups, and I found myself asking them for UK-based technology role models.

We struggled, then came up with Vodafone as our shining light. We have just heard that ICL is giving up the ghost, and will now officially be known as Fujitsu - death not only of a brand, but of a UK technology dream. This was swiftly followed by Psion's departure from the consumer pocket organiser business.

Where are the UK domiciled technology giants?

Why do many companies find it so hard to escape the pull of the past? Why do many individuals keep resorting to learned behaviour, the habits and ideas that may have bought them success in the past, but which will leave them adrift in the fast-moving currents of the new economy? What is the spell that keeps them so immobilised? It's the Voodoo.

And what is the magic that can release us all - organisations and individuals, leaders and the led, employees and free agents, parents and children and candlestick makers - into a world of power, creativity, connection and achievement? Well, it's also the Voodoo...

The power comes from knowing the difference.