So, last winter, RedCart switched its strategy a third time: It went back to licensing only technology, and it has partnered with outfits such as Internet-search infrastructure company LookSmart Ltd. and print-and Web-publishing company Primedia Inc. to license its technology.

How did Van Den Berg keep employees' faith through three strategy shifts in one year? He talked with them. Every Monday, RedCart had a staff meeting in which all employees shared positioning ideas and what they were learning from clients. "There were a few times we could have made decisions faster, but we had to get everyone's buy-in," he says.

Van Den Berg made it clear that fast-changing market conditions meant even faster-changing strategies."The good thing with this market is you get feedback fairly quickly," he says. "The cycles are short."

But is what's right for a 35-employee startup appropriate for 840,000 employees across 50 states? Bob Krause, VP of E-commerce for the U.S. Postal Service, can't exactly call a staff meeting. Throw in a 225-year legacy of being run under a command-and-control model, and it's not surprising that there's hesitation about giving employees the freedom to fail.

Nonetheless, Krause says, that's one of the service's key goals--to make it easier for employees to be more innovative, even at the risk of failure. "The post office believes in it, but there's a trap we fall into," he says. "The post office has a compulsion to be right."

A startup, of course, requires a different approach to mistakes. TellSoft Technologies Inc. moved into new Colorado Springs, Colo., offices last December absent phones. That's ironic, given that TellSoft makes software that streams voice onto Web sites using phones or voice mail.

At most companies, one day without office telephones has people burning mobile-phone batteries. Two weeks without land-line phones, and they start looking for someone's head. But CEO Bill Tomeo--who had spent 20 years at Hewlett-Packard before joining TellSoft, most recently as VP of marketing and field operations for HP's Communications Test Solutions business--says he knew that with speed comes mistakes, and the company would have to learn from them. TellSoft had more than doubled its staff and was moving to larger quarters, changing phone carriers, moving its servers to an off-site location, and changing some of its data-networking and firewall procedures.

In all the hubbub, no one had confirmed that the phone company could really deliver the services it promised. "We were trying to move fast," Tomeo says. "When you look back, we changed too many variables at once."

Indeed, with the pressures of competition from startups, existing businesses creating--and destroying--old business models, and the relentless need to attend to shifting populations, speed must take precedence. This is not an economy for the timid. Failure is not only OK, it must be encouraged.

"It's easy to talk about, but hard to do well," says the Postal Service's Krause about the role of failure. "We try to listen to the people who directly serve our customers."

return to page 1