This is a story of how a Fortune 500 company turned a failure into a spectacular failure (that shouldn’t have happened) and what you can learn from it for your own business.

In the early 90′s, I worked for Motorola as a consultant on a project called EMBARC. EMBARC was a 1 1/2 way pager with some pretty neat features. Like a pager, it could receive phone numbers but it could also receive text messages, had several news and entertainment feeds you could subscribe to and could even take in computer data like updated pricing spreadsheets from the corporate office. To facilitate the value of this, it understood the concept of groups allowing the company to send the spreadsheet one time and have it sent to all company salespeople at the same time.

It could hook up to a PC or a handheld computer so that the data could be extracted and so that replies to messages could be made to people who sent you messages. This is what made it a 1 1/2 way pager. You needed to use a special program on the computer and dial up a central computer system to send a reply.

This was an awkward aspect of an otherwise really neat technology but in spite of that, trade show demonstrations and ads in magazines (especially airline magazines) would draw thousands of people requesting an information package be sent to them so they could evaluate the product further.

In fact, response was so great that they constantly ran out of information packages to send out. And since it was a big company philosophy that was behind the project, getting a budget to print more packages was quite time consuming.

The end result of this conflict was that they threw out 1000′s of leads at a time. And that action turned a failure into a massive failure.

The system was doomed to failure anyway due to the march of technology but in this case, failure should have been a natural obsolescence, not a closing of the EMBARC division due to massive cost overruns with no significant revenues to show for it.

There are some interesting lessons here – some of which are interesting from a big company perspective and others which are of benefit to the small businessman.

Lets look at the big company lessons first. As part of this project, Motorola gained two valuable assets. First it gained a national network of transmission towers at a specific frequency range (a very valuable physical asset) and second it gained insights into some significant new technologies. Take the group contact feature of the pager. Motorola’s Nextel phones have a group voice paging technology (which evolved out of this research and research on Walkie Talkies that they produced.) Take the ability to download computer data reliably. Many Motorola phone products can now be used as modems.

So even though the project was a massive failure, when looked at from a long term perspective, the project built great residual value for the company and the divisions liquidation was not too painful for the company. In fact, the value of the frequency and equipment deployed to access it was a commodity that only grew in value every year.

As a small business person, you don’t have the luxury of deep pockets to take on such a project with the hopes that if it fails, you will make it up on the back end.

The lesson to learn as a small business person is twofold.

The first is to control your growth. While there is always a desire to grow as quickly as possible, this often results in disaster. By growing slowly, you don’t get rich as quick but you solve problems like keeping inventory in stock. I know from personal experience that it is very easy to get buried if you get an unexpected boost from publicity and go instantly from 10′s of orders a week to 100′s of orders a week. If you don’t have the infrastructure in place to support the volume, lots of problems happen. Orders get lost. Orders get sent to the wrong customers, etc.

The second lesson is that you should always work all your leads until they are dead. If instead of throwing out 1000′s of leads at a clip they worked them, chances are very good that EMBARC would have died due to obsolescence instead of red ink. Leads are the route to new customers for your business and must be worked repeatedly until they are no longer profitable. Only then should you remove a lead from the system. (And with email marketing, it can take a long time before a lead becomes worthless!)

Within all failures (your or others that you are familiar with) are the seeds of success. We learn from our failures but only if we take the time to reflect on the lessons that are being offered to us. Taking a few minutes each week to reflect on past failures and how their lessons can be applied to your current business will pay tremendous long term dividends.