Focus: Embracing failure teachers us to be more innovative  and to focus on improvement

By WSAM Personal Finance writer

Failure is sometimes necessary for growth and innovation. In fact, failure is an essential part of the learning process, as it enables us to identify what does not work and to make adjustments for the future, says some industry leaders responding on what companies can learn from failure.

“Failure sharpens decision-making abilities,” says Glenn Gillis, CEO at Sea Monster. “Games are an excellent way to illustrate the point that failure is a means of growth. They provide a safe environment where we can experiment and fail within an agreed set of rules and with low consequences.

“By playing games, we can embed leadership principles and learn how to solve management challenges more effectively. It is a powerful tool that we can use to develop our skills and improve our decision-making abilities.”

However, in the real world, Gillis says people do not have the luxury of failing within a controlled environment.  “We have to keep evolving, keep learning and keep innovating, which means that we need to make decisions and potentially make the wrong ones. This is the dayto-day reality of running a business’’.

Taking calculated risks is also a must, according to Gillis. In a scaled environment, failing regularly is part of the mindset, but it is crucial to ensure that we are not betting the farm every single time.

As a leader, Gillis says it is important to encourage autonomy within an organisation and to empower employees to take risks. “We cannot centrally control everything and expect to create value. Instead, we need to create an environment that encourages innovation and risk-taking, which is essential for growth and progress.

For business leaders, it is ultimately the management of failure that will determine success,” says Gillis.

Keletso Mpisane, Head of MiWay Blink, believes that failure encourages an agile mind. “In the insurtech industry, innovation, new advancementsand constant changes are the order of the day. It teaches us that agility is key to remaining relevant in the new business landscape of today.”

According to Mpisane, agility is key. “Not only in how you decide to steer your business but also in how you choose to react to failure. If failure strikes any part of your business, which it inevitably will, you need to respond quickly and effectively to find new outcomes.

“Foster agile teams with an agile mindset, so that if failure comes along, they can successfully implement the changes needed to overcome obstacles and propel you forward again.”

According to Dalit Shekel, Brand consultant at Relate Bracelets, failure leads to innovation. Embracing failure teaches one to be more innovative, take calculated risks and focus on continuous improvement.

By constantly assessing our strategies and being open to new ideas, the company says we can stay relevant and have a meaningful impact in the world.

“We have learned that some risks are worth taking if they are well-researched and have the potential for high rewards. We now approach risks with a more strategic mindset and are able to weigh the pros and cons of each decision we make,” says Dalit Shekel.

Bryan Turner, Partner at Spear Capital agrees. “Failure, within reason, is not necessarily a bad thing in the business sector. In fact, it can be a good thing. At Spear, we expect a certain degree of failure among our portfolio companies.

As long as they are learning from the things they have thrown at the wall and did not stick, they are going to end up that much closer to finding something new that works really well for them.”

Zuko Mdwaba, Area vice president for Africa at Salesforce, says failure is especially an opportunity to learn. “Failure is almost impossible to avoid and indeed should not be avoided. And in much the same way that we tout the common phrase “no such thing as a silly question”, there is no such thing as failure, only how you choose to respond to it.”

Mdwaba believes that today’s business climate calls for empathetic and value-driven leadership.

Not only does this drive better business outcomes but it leads to better people outcomes.

“Failure need not be feared, but seen as an opportunity to improve. In the same way that giving employees the right opportunities and resources to expand their skill sets benefits everyone, embracing and learning from failures is an opportunity for everyone to learn.’’

According to Anton Gillis, CEO of Kruger Gate Hotel, embracing failure is the key to success. He says failure can help identify gaps in offerings, provide valuable insights on how to improve our services, refine processes and innovate business strategies to better serve guests.

“It is through these experiences that our employees develop the resilience and tenacity necessary to thrive in the competitive world of hospitality.”

CURRENT MARKET

VOLATILITY

UNSETTLES

INVESTORS

INFLATION: Elevated inflation has remained a challenge for central banks and the global economy

By Isaac Moledi

Despite the volatile times,  investors would be well served by buying high quality, international companies and to hold them for the long-term.This is the advice from Marriott International, a hospitality service provider that operates hotels and restaurants worldwide.

Singling out Proctor & Gamble as a great example of such a company, Investment Professional at Marriott International, Scott Cooper, says as a result of ongoing uncertainty around the inflation outlook, and the resulting path of interest rates, his company has seen increased volatility in the financial markets in the first nine  months of 2022.

Marriott International is an American multinational company that operates, franchises and licenses lodging including hotels, residential and timeshare properties. The company has 30 brands and more than 8,000 properties across 139 countries. Procter & Gamble on the other hand is also an American consumer goods giant specializing in a wide range of personal care and hygiene products.

According to Cooper, elevated inflation, driven by the unprecedented monetary and fiscal stimulus in the wake of the pandemic and exacerbated by Russian’s invasion of the Ukraine, has remained a challenge for central banks and the wider global economy during 2022. Although inflation has finally begun to ease in many economies, it still remains significantly above their longer term targets.

“Central banks have made it clear that they will maintain their rate hiking cycle and higher interest rates in general, until inflation is well under control,” says Cooper, quoting Jerome Powell, Chair of the Federal Open Market Committee (FOMC)  who has vowed to raise rates to fight inflation ‘until the job is done’.

Cooper believes that Powell’s comments set the path for continued interest rate increases and a consumer coming under increasing pressure as the world moved towards the end of 2022.

“As a result of on-going uncertainty around the inflation outlook and the resulting path of interest rates, we have seen increased volatility in the financial markets in the first nine months of 2022.

This is well evidenced in the USA by the CBOE Volatility Index (VIX), which measures the expected volatility of the S&P500 over the next 30 days, being elevated through much of 2022.

“In the UK, the previous Chancellor of the Exchequer, Kwasi Kwarteng, ignited further volatility in the markets by announcing a slew of unfunded tax cuts. On the back of his actions, spurred on by a lack of communication with the market, the sterling fell to its weakest ever against the dollar – dropping to 1.03, a 24% decline from its 1.35 level at the beginning of 2022,” says Cooper.

Although periods of market volatility are, understandably, unsettling for many investors, he says his company continues to believe that investors will be well served by buying high quality, international companies and to hold them for the long-term.

According to him, Proctor & Gamble, another American consumer goods giant specializing in a wide range of personal care and hygiene products, has been able to continue to grow their dividend payments to investors throughout a range of global macroeconomic challenges.

Their market leadership, balance sheet strength and ability to maintain profit margins have been integral to their success and positions them well for the challenges ahead.

These characteristics are a key component of all the companies within Marriott’s international portfolios and they are likely to be particularly important as interest rate increases continue to squeeze the consumer as we move towards 2023.

“While it is clear that the global economy is facing a number of challenges, we remain optimistic that our income focused investing style, with its focus on quality, resilience and dividends will continue to produce good outcomes for investors in the months and years ahead,” says Cooper.

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