I was having one of those memorable group dinners last weekend that jumps from one fun topic to another, and has us sharing and learning new things about ourselves. One question that popped up for all to reflect on was “what accomplishment are you most proud of in life?” After some thought, my answer surprised me: “Even though it was a ‘failure’, I am proud to have started my own company.”
A few years ago, I co-founded a social venture – Fresh Takes Kitchen – that brought healthy, prepared meals to lower income communities. I loved all of the fun and exciting parts of starting that company – developing the idea, successfully raising funds, securing our first distribution partners, generating sales, talking to thousands of satisfied customers, and hearing how our meals were improving the eating habits of so many families. But now, I find myself most proud of how we handled the company’s demise.
My co-founder and I conducted a thorough postmortem to systematically uncover the factors that led to the company’s failure. We documented our learnings and shared them with our funders, partners and fellow social entrepreneurs to get additional feedback and improve the chance of success for future endeavors like ours. In those post-Fresh Takes Kitchen weeks I may have learned more about myself as a leader and what it takes to run a successful business than at any other point in my life.
What is a postmortem?
In essence, a postmortem evaluates a recent failure or challenge experienced by a business to identify the root causes and minimize the chance of them happening again. The “failure” can be such an event as:
- An entire company goes out of business
- A specific project within a company fails
- A team has been unsuccessful in working together and achieving goals
- An external threat that the company responds poorly to, such as hackers compromising a system or an economic recession
Call this process whatever you like – a retrospective, after-analysis, case study, etc. – the important thing is that you do it!
Why is a postmortem so valuable?
When done well, a postmortem has tremendous value to many different parties.
- Professional growth and strengthened organizational culture: A postmortem is a wonderful opportunity for personal and professional growth for you and your team, forcing you to reflect on your management and executions skills and on your organization’s culture. For example, a postmortem on the loss of your company’s largest account may surface organizational behaviors that foster poor customer service. A postmortem after a venture fails may reveal that you had assembled the wrong team, and that you need to strengthen your organizational design and hiring skills. The very act of conducting an honest and collaborative postmortem strengthens organizational culture – encouraging team members to acknowledge mistakes and shortcomings and proactively address them.
- Business model evolution: A postmortem might identify fundamental issues with your core operating model. For example, a postmortem on the devastating impact of a series of weather events may lead the team to explore product diversification options.
- Strengthen the success of fellow entrepreneurs, and the industry overall: A postmortem, particularly following the failure of an entire business, provides invaluable insights to other entrepreneurs launching ventures in the same industry. This is particularly helpful in industries that are new and still being developed, and that have challenging goals of achieving financial success and social impact. A key question we help our clients answer during a feasibility study is “How have similar businesses failed and why won’t you?”
A few incredibly thoughtful postmortems have been released that contain priceless lessons, advice and principles of success for food systems related enterprises. In such a nascent industry, in which most are working towards a shared goal of strengthening local food systems, these honest reflections are so critical to bolstering the success of future endeavors.
- Tallgrass Prairie Producers Co-op, Iowa State Extension
- Growers Collaborative, Community Alliance With Family Farmers
- Home Grown Wisconsin Co-op, UW Madison Center for Integrated Agricultural Systems
Next month the National Good Food Network will host a webinar with a retrospective on Grasshoppers, a food hub in Louisville that shuttered in 2014. In addition to lessons that attendees will learn from this session, this case study demonstrates that there can be lasting positive impact on the food system in the wake of businesses failure. Two good reasons to tune in.
My business is doing great. So what does this all mean for me?
First, build postmortems into your overall organizational practices. If and when you’re in the midst of what might feel like a major crisis or strategic failure, schedule a postmortem for several weeks or months down the road when you know you’ll be done putting out fires but can still learn from the event.
Second, I highly recommend conducting a postmortem on your entire business right now, even while you’re still vibrant and successful.
Confession time: I had a professor in business school who recommended that we write a postmortem of Fresh Takes Kitchen, before we had even launched. He suggested that we spend some time visualizing “being present at Fresh Takes Kitchen’s funeral”, and brainstorming all of the drivers that were most likely to have gotten us to that point. My co-founder and I didn’t take him up on the suggestion and came to regret it. I wish we had taken the time to really think through everything that likely could have brought us down – slim product margins, skill gaps in our leadership team, fickle customers (i.e. children!) that were hard to acquire and even harder to retain with a healthy product, and lack of strong intellectual property. Would we have solved it all right away? Certainly not. But it would have made us recognize and get in front of those issues far more proactively when they did inevitably surface as our business grew.
So – now with hindsight being 20/20 – I highly recommend this step for any entrepreneur or business owner who is building a company in an industry that is still new, untested and so challenging. It can make you a better leader, and improve your chance of success – and after you’ve finished with the exercise, you can take the time to celebrate your vibrancy and success to date, knowing that it was just a “fake funeral!”
We developed a short guide to help you conduct an effective postmortem. Click here for printable version.
We’d love to hear from you!
Have you been involved in a great – or not so great – postmortem or retrospective? Please share your experiences with these types of reflective processes and if/how they have helped you run your business more successfully.